** **

**Exhibit 10.1(a)**

 

EXECUTION COPY

 

AGREEMENT AND PLAN OF MERGER

 

among

 

VARIETAL DISTRIBUTION HOLDINGS, LLC,

 

VARIETAL DISTRIBUTION MERGER SUB, INC.,

 

and

 

CDRV INVESTORS, INC.

 

 

Dated as of May 2, 2007

 

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| ARTICLE I                                                                  |                                                                  |   |   |
|----------------------------------------------------------------------------|-----------------------------------------------------------------------|--------|--------|
|                                                                       |                                                                  |   |   |
| THE MERGER;  CONVERSION OF SHARES; CANCELLATION OF CONVERTIBLE INSTRUMENTS |                                                                  |   |
|                                                                       |                                                                  |   |
| 1.1                                                                        | The Merger                                                            |   | 1      |
| 1.2                                                                        | Merger  Consideration                                                 |   | 1      |
| 1.3                                                                        | Closing;  Effective Time                                              |   | 2      |
| 1.4                                                                        | Conversion  of Shares                                                 |   | 3      |
| 1.5                                                                        | Cancellation  of Company Options; Restricted and Deferred Stock Units |   | 4      |
| 1.6                                                                        | Certificate  of Incorporation; By-Laws                                |   | 4      |
| 1.7                                                                        | Directors  and Officers of the Surviving Corporation                  |   | 5      |
| 1.8                                                                        | Dissenting  Stockholders                                              |   | 5      |
| 1.9                                                                        | Paying Agent                                                          |   | 5      |
| 1.10                                                                       | Withholding  Taxes                                                    |   | 7      |
|                                                                       |                                                                  |   |   |
| ARTICLE II                                                                 |                                                                  |   |   |
|                                                                       |                                                                  |   |   |
| REPRESENTATIONS  AND WARRANTIES OF THE COMPANY                             |                                                                  |   |
|                                                                       |                                                                  |   |
| 2.1                                                                        | Corporate  Status, etc                                                |   | 8      |
| 2.2                                                                        | Capitalization                                                        |   | 8      |
| 2.3                                                                        | Conflicts,  Consents                                                  |   | 9      |
| 2.4                                                                        | SEC Filings;  Financial Statements; Certain Compliance Matters        |   | 10     |
| 2.5                                                                        | Absence of  Undisclosed Liabilities                                   |   | 11     |
| 2.6                                                                        | Absence of  Changes                                                   |   | 12     |
| 2.7                                                                        | Tax Matters                                                           |   | 12     |
| 2.8                                                                        | Litigation                                                            |   | 12     |
| 2.9                                                                        | Compliance  with Laws; Permits                                        |   | 13     |
| 2.10                                                                       | Employee  Benefits                                                    |   | 13     |
| 2.11                                                                       | Labor  Matters                                                        |   | 14     |
| 2.12                                                                       | Real  Property; Tangible Property                                     |   | 15     |
| 2.13                                                                       | Intellectual  Property                                                |   | 15     |
| 2.14                                                                       | Contracts                                                             |   | 16     |
| 2.15                                                                       | Insurance                                                             |   | 18     |
| 2.16                                                                       | Environmental  Matters                                                |   | 18     |
| 2.17                                                                       | Affiliate  Transactions                                               |   | 19     |
| 2.18                                                                       | Brokers                                                               |   | 19     |

 

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| ARTICLE III                                            |                                                               |   |   |
|--------------------------------------------------------|--------------------------------------------------------------------|--------|--------|
|                                                   |                                                               |   |   |
| REPRESENTATIONS  AND WARRANTIES OF PARENT AND MERGERCO |                                                               |   |
|                                                   |                                                               |   |
| 3.1                                                    | Company  Status                                                    |   | 19     |
| 3.2                                                    | Authorization,  etc                                                |   | 19     |
| 3.3                                                    | No  Conflicts; Consents                                            |   | 19     |
| 3.4                                                    | Litigation                                                         |   | 20     |
| 3.5                                                    | Financing                                                          |   | 20     |
| 3.6                                                    | Guarantee                                                          |   | 21     |
| 3.7                                                    | Brokers                                                            |   | 21     |
| 3.8                                                    | Formation of  MergerCo; No Prior Activities                        |   | 21     |
| 3.9                                                    | No Knowledge  of Misrepresentations or Omissions                   |   | 22     |
| 3.10                                                   | Certain  Acquisitions                                              |   | 22     |
|                                                   |                                                               |   |   |
| ARTICLE IV                                             |                                                               |   |   |
|                                                   |                                                               |   |   |
| COVENANTS                                              |                                                               |   |
|                                                   |                                                               |   |
| 4.1                                                    | Conduct of  the Company and its Subsidiaries                       |   | 22     |
| 4.2                                                    | Satisfaction  of Closing Conditions; Filings                       |   | 25     |
| 4.3                                                    | Access and  Information                                            |   | 26     |
| 4.4                                                    | Contact with  Customers, Suppliers, etc                            |   | 27     |
| 4.5                                                    | Publicity                                                          |   | 27     |
| 4.6                                                    | Employee  Matters                                                  |   | 27     |
| 4.7                                                    | Transfer  Taxes                                                    |   | 28     |
| 4.8                                                    | Indemnification  of Directors and Officers                         |   | 28     |
| 4.9                                                    | Financing                                                          |   | 29     |
| 4.10                                                   | Resignations                                                       |   | 30     |
| 4.11                                                   | Exclusive  Dealing                                                 |   | 31     |
| 4.12                                                   | Financial  Statements and Other Information                        |   | 31     |
| 4.13                                                   | Affidavit                                                          |   | 31     |
|                                                   |                                                               |   |   |
| ARTICLE V                                              |                                                               |   |   |
|                                                   |                                                               |   |   |
| CONDITIONS  TO CLOSING                                 |                                                               |   |
|                                                   |                                                               |   |   |
| 5.1                                                    | Conditions to  the Obligations of the Company, Parent and MergerCo |   | 31     |
| 5.2                                                    | Conditions  to the Obligation of Parent and MergerCo               |   | 32     |
| 5.3                                                    | Conditions  to the Obligation of the Company                       |   | 32     |

 

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| ARTICLE VI                                                |                                                      |   |   |
|-----------------------------------------------------------|-----------------------------------------------------------|--------|--------|
|                                                      |                                                      |   |   |
| NO SURVIVAL  OF REPRESENTATIONS, WARRANTIES AND COVENANTS |                                                      |   |
|                                                      |                                                      |   |
| 6.1                                                       | No Survival  of Representations, Warranties and Covenants |   | 33     |
|                                                      |                                                      |   |   |
| ARTICLE VII                                               |                                                      |   |   |
|                                                      |                                                      |   |   |
| TERMINATION                                               |                                                      |   |
|                                                      |                                                      |   |
| 7.1                                                       | Termination                                               |   | 33     |
| 7.2                                                       | Effect of  Termination                                    |   | 34     |
|                                                      |                                                      |   |   |
| ARTICLE VIII                                              |                                                      |   |   |
|                                                      |                                                      |   |   |
| DEFINITIONS  AND INTERPRETATION                           |                                                      |   |
|                                                      |                                                      |   |   |
| 8.1                                                       | Definition  of Certain Terms; Interpretation              |   | 35     |
| 8.2                                                       | Disclosure  Letter                                        |   | 45     |
|                                                      |                                                      |   |   |
| ARTICLE IX                                                |                                                      |   |   |
|                                                      |                                                      |   |   |
| GENERAL  PROVISIONS                                       |                                                      |   |
|                                                      |                                                      |   |
| 9.1                                                       | Expenses                                                  |   | 45     |
| 9.2                                                       | Further  Actions                                          |   | 46     |
| 9.3                                                       | Certain  Limitations                                      |   | 46     |
| 9.4                                                       | Notices                                                   |   | 46     |
| 9.5                                                       | Binding  Effect                                           |   | 48     |
| 9.6                                                       | Assignment;  Successors                                   |   | 48     |
| 9.7                                                       | Amendment;  Waivers, etc                                  |   | 48     |
| 9.8                                                       | Entire  Agreement                                         |   | 48     |
| 9.9                                                       | Severability                                              |   | 48     |
| 9.10                                                      | Headings                                                  |   | 49     |
| 9.11                                                      | Counterparts                                              |   | 49     |
| 9.12                                                      | Governing  Law                                            |   | 49     |
| 9.13                                                      | Consent to  Jurisdiction, etc                             |   | 49     |
| 9.14                                                      | Waiver of  Punitive and Other Damages and Jury Trial      |   | 50     |
| 9.15                                                      | Specific  Performance                                     |   | 50     |

 

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EXHIBITS

 

Exhibit A                Form of Guarantee

 

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AGREEMENT AND PLAN OF MERGER, dated as of May 2, 2007,among Varietal Distribution Holdings, LLC, a Delaware limited liability company(“Parent”), Varietal Distribution Merger Sub, Inc., a Delawarecorporation (“MergerCo”), and CDRV Investors, Inc., a Delawarecorporation (the “Company”). Capitalized terms used herein are definedin Article VIII.

 

RECITALS:

 

A.            Therespective Boards of Directors of Parent, MergerCo and the Company havedetermined that it is advisable and in the best interests of their respectivestockholders for MergerCo to merge with and into the Company (the “Merger”)with the Company continuing as the surviving corporation of such Merger, uponthe terms and subject to the conditions set forth in this Agreement.

 

B.            Onor prior to the date hereof, Parent, acting as the sole stockholder ofMergerCo, has approved the Merger, and immediately after the entry into thisAgreement, the Company will obtain the Requisite Consent of Stockholdersapproving the Merger, upon the terms and subject to the conditions set forth inthis Agreement.

 

NOW, THEREFORE, the parties hereto agree as follows:

 

ARTICLE I

 

THE MERGER; CONVERSION OF SHARES;CANCELLATION OF CONVERTIBLE INSTRUMENTS

 

1.1           TheMerger. Upon the terms and subject to the conditions of this Agreement andin accordance with the applicable provisions of the Delaware GeneralCorporation Law (the “DGCL”), at the Effective Time, MergerCo shall bemerged with and into the Company and the separate corporate existence ofMergerCo shall cease. After the Merger, the Company shall continue as thesurviving corporation (sometimes hereinafter referred to as the “SurvivingCorporation”) and shall continue to be governed by the Laws of the State ofDelaware. The Merger shall have the effect as provided in the applicableprovisions of the DGCL. Without limiting the generality of the foregoing, atthe Effective Time, all the rights, privileges, immunities, powers andfranchises of the Company and MergerCo shall vest in the Surviving Corporationand all restrictions, obligations, duties, debts and liabilities of the Companyand MergerCo shall be the restrictions, obligations, duties, debts andliabilities of the Surviving Corporation.

 

1.2           MergerConsideration. The consideration to be paid by Parent and MergerCo inrespect of the Merger shall be equal to the Equity Consideration.

 

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1.3           Closing;Effective Time.

 

### (a)           The closing of the Merger (the “Closing”)shall take place at the offices of Debevoise & Plimpton LLP, 919 ThirdAvenue, New York, New York, at 10:00 a.m., New York time on the third BusinessDay following the satisfaction or waiver of the conditions set forth inArticle V (other than conditions which, by their nature, are to besatisfied at the Closing, but subject to the satisfaction or waiver of thoseconditions), or at such other place, time and date as the parties may agree; providedthat, notwithstanding the satisfaction or waiver of the conditions set forth inArticle V, (i) Parent and MergerCo will not be required to effect theClosing until the final day of the Marketing Period and (ii) the Companyshall not be required to effect the Closing during the Marketing Period withoutat least five Business Days’ notice specified by Parent. The “Closing Date”shall be the date upon which the Closing occurs.

###  

### (b)           On the Closing Date, MergerCo and theCompany will cause a certificate of merger (the “Certificate of Merger”)to be executed and filed with the Secretary of State of the State of Delaware(the “Delaware Secretary of State”) in such form and executed asprovided in Section 251(c) of the DGCL. The Merger will become effectiveat the time when the Certificate of Merger has been duly filed with theDelaware Secretary of State, or such later time as may be specified in theCertificate of Merger (the “Effective Time”).

###  

### (c)           Subject to the terms and conditionsof this Agreement, at the Effective Time, MergerCo shall pay (or cause to bepaid) to the Company an amount equal to the Equity Consideration *plus* the Closing Debt Repayment Amount, bywire transfer of immediately available funds. The Company or the SurvivingCorporation shall subsequently make the following payments (based on the amounts setforth in a certificate delivered by the Company as provided in the lastparagraph of this Section 1.3(c)):

###  

##### (i)            at or immediately prior to theEffective Time, the Company shall pay, and/or shall cause its applicableSubsidiaries to pay, in each case, by wire transfer of immediately availablefunds, amounts sufficient to repay in full the Closing Debt Repayment Amount,and the Company will take and/or will cause its applicable Subsidiaries to takesuch other steps as may be necessary to cause the satisfaction and discharge ofall obligations in respect thereof;

#####  

##### (ii)           at or immediately prior to theEffective Time, the Company shall pay the Transaction Expenses by wire transferof immediately available funds; and

#####  

##### (iii)          at or immediately after the EffectiveTime, the Surviving Corporation shall pay to the Paying Agent the EquityConsideration (less the amounts payable pursuant to Section 1.5).

 

2

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In order to facilitate the payments contemplated bythis Section 1.3(c), Section 1.5 and Section 1.9(b), the Company willdeliver to Parent and to MergerCo not less than two Business Days prior to theanticipated Closing Date a statement, certified by the chief financial officerof the Company, that will set forth:  (1) theEquity Consideration, (2) the Closing Debt Repayment Amount, (3) theTransaction Expenses, (4) the aggregate Option Cancellation Paymentspayable to the holders of Company Options pursuant to Section 1.5(a) andthe aggregate amount payable to the holders of RSUs and DSUs pursuant toSection 1.5(b), (5) the Per Share Merger Consideration and (6)the estimated amount of cash and cash equivalents of the Company and itsSubsidiaries as of the Closing Date. Such statement shall also set forth thewire transfer or other payment instructions with respect to the payments to bemade pursuant to Sections 1.3(c)(i), 1.3(c)(ii)and 1.3(c)(iii). All of thecalculations and amounts set forth in such statement shall be deemed to beconclusive and binding on the parties absent manifest error.

 

1.4           Conversionof Shares. At the Effective Time, by virtue of the Merger and without anyaction on the part of any holders of any shares of Company Stock, or of theMergerCo Common Stock:

 

(a)           Each share of Company Stock (otherthan shares of Company Stock held as treasury stock, held by a Subsidiary ofthe Company or owned by Parent or MergerCo immediately prior to the Effective Timeand Dissenting Shares) issued and outstanding immediately prior to theEffective Time shall be converted into the right to receive the Per ShareMerger Consideration. The issued and outstanding Company Stock, when converted,shall no longer be outstanding and shall automatically be canceled and retiredand shall cease to exist, and each holder of a Certificate representing anysuch shares of Company Stock or holder of uncertificated shares of CompanyStock shall cease to have any rights with respect thereto, except the right toreceive the Per Share Merger Consideration applicable to such Company Stock (inthe case of certificated shares, upon the surrender of such Certificate in themanner provided in and in accordance with Section 1.9(b)).

 

(b)           All shares of Company Stock that areheld by the Company as treasury stock or owned by Parent or MergerCoimmediately prior to the Effective Time shall be canceled and retired and shallcease to exist and no Per Share Merger Consideration shall be delivered in exchangetherefor.

 

(c)           All shares of Company Stock that areheld by a Subsidiary of the Company shall remain outstanding and no Per ShareMerger Consideration shall be delivered in exchange therefor.

 

(d)           Each share of MergerCo Common Stockissued and outstanding immediately prior to the Effective Time (1,000 shares,in the aggregate) shall be converted into and exchangeable for one fully paidand non-assessable share of

 

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common stock, par value$.01 per share, of the Surviving Corporation (“Surviving Corporation CommonStock”).

 

1.5           Cancellationof Company Options; Restricted and Deferred Stock Units. At the EffectiveTime, by virtue of the Merger and without any action on the part of the holdersthereof:

 

(a)           each outstanding Company Option underthe Stock Plan shall be canceled in exchange for a single lump sum cashpayment, which the Surviving Corporation shall pay as soon as practicable, but in no event more than fivedays following the Effective Time, equal to (x) the excess,if any, of the Per Share Merger Consideration over the Exercise Price per shareof such Company Option, *multiplied* by (y) thenumber of shares of Company Stock covered by such Company Option immediatelyprior to the Effective Time (the “Option Cancellation Payment”), itbeing understood that any unvested Company Options shall become fully vested inaccordance with their terms as a result of the Merger; and

 

(b)           each outstanding restricted stockunit granted under the Stock Plan (the “RSUs”) and deferred share unitsgranted under the Stock Plan (the “DSUs”) shall be converted into theright to receive the Per Share Merger Consideration, which the SurvivingCorporation shall pay as soon as practicable, but in no event more than fivedays following the Effective Time, it being understood that any unvestedRSUs shall become fully vested in accordance with their terms as a result ofthe Merger. Such RSUs and DSUs, when converted, shall no longer be outstandingand shall automatically be canceled and retired and shall cease to exist, andeach holder thereof shall cease to have any rights with respect thereto, exceptthe right to receive the Per Share Merger Consideration as provided in theprior sentence.

 

(c)           The Board of Directors of the Company(or the appropriate committee thereof) shall take any actions necessary toeffectuate the foregoing provisions of this Section 1.5.

 

1.6           Certificateof Incorporation; By-Laws.

 

### (a)           The certificate of incorporation ofMergerCo as in effect immediately prior to the Effective Time shall be thecertificate of incorporation of the Surviving Corporation until thereafter dulyamended in accordance with the terms thereof and the DGCL.

###  

### (b)           The by-laws of MergerCo as in effectimmediately prior to the Effective Time shall be the by-laws of the SurvivingCorporation until thereafter duly amended as

 

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### provided byapplicable Law, the certificate of incorporation of the Surviving Corporationand such by-laws.

###  

1.7           Directorsand Officers of the Surviving Corporation.

 

### (a)           The directors of MergerCo immediatelyprior to the Effective Time shall, from and after the Effective Time, be thedirectors of the Surviving Corporation until their successors shall have beenduly elected or appointed and qualified or until their earlier death,resignation or removal in accordance with the Surviving Corporation’scertificate of incorporation and by-laws.

###  

### (b)           The officers of the Companyimmediately prior to the Effective Time shall be the initial officers of theSurviving Corporation and shall hold office until their respective successorsare duly elected or appointed and qualified, or until their earlier death,resignation or removal.

###  

1.8           DissentingStockholders.

 

### (a)           Notwithstanding anything in thisAgreement to the contrary, any issued and outstanding shares of Company Stockheld by a Person (a “Dissenting Stockholder”) who has not voted to adoptthis Agreement and who properly demands appraisal for such shares in accordancewith Section 262 of the DGCL (“Dissenting Shares”) shall not beconverted as described in Section 1.4, but shall, as of the EffectiveTime, be converted into the right to receive such consideration as may bedetermined to be due to such Dissenting Stockholder pursuant toSection 262 of the DGCL, unless such holder fails to perfect or withdrawsor otherwise loses his right to appraisal. If, after the Effective Time, suchDissenting Stockholder fails to perfect or withdraws or loses his right toappraisal, such Dissenting Stockholder’s shares of Company Stock shall nolonger be considered Dissenting Shares for the purposes of this Agreement andsuch holder’s shares of Company Stock shall thereupon be deemed to have beenconverted, at the Effective Time, as described in Section 1.4.

###  

### (b)           The Company shall give Parent andMergerCo (i) prompt notice of any demands for appraisal of sharesof Company Stock received by the Company, and (ii) the opportunityto participate in and, if Parent elects, control all negotiations andproceedings with respect to any such demands, and the Company shall not,without the prior written consent of Parent, make any payment with respect to,or settle, offer to settle or otherwise negotiate, any such demands.

###  

1.9           PayingAgent.

 

### (a)           Notices to Stockholders. Aspromptly as practicable after the date hereof, the Company shall, or shallcause the Paying Agent to, mail to each holder of record of Company Stock onthe applicable record date (i) the notices required bySection 228(e) of

 

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### the DGCL inconnection with having obtained the Requisite Consent of Stockholders approvingthe Merger, including an information statement (which shall be subject toParent’s prior approval, such approval not to be unreasonably withheld)describing in reasonable detail the Merger and this Agreement and thetransactions contemplated hereby, (ii) the notice to stockholdersof their appraisal rights required under Section 262(d)(2) of the DGCL, (iii) withrespect to holders of certificated shares, a letter of transmittal specifyingthat delivery shall be effected, and risk of loss of any Certificates shallpass, only upon delivery of the Certificates to the Paying Agent, which lettershall be in customary form and have such other provisions as the Company mayreasonably specify (which shall be subject to Parent’s prior approval, suchapproval not to be unreasonably withheld) (the “Letter of Transmittal”),(iv) instructions for effecting the surrender of any such Certificatesfor payment and (v) a request for wire transfer or other paymentinstructions to be used in the payment of the Per Share Merger Consideration tosuch holder.

###  

### (b)           Letters of Transmittal; Payment.The Letter of Transmittal shall specify that in the event of a termination ofthis Agreement prior to the Closing, pursuant to Section 7.1 or otherwise,the Paying Agent shall return any Certificates in its possession to the holderof record. Promptly at or after the Effective Time (in the case of certificatedshares, upon surrender of a Certificate to the Paying Agent together with theapplicable transmittal documents, duly executed and completed in accordancewith the instructions thereto), the Paying Agent shall pay the holder of suchshares of Company Stock (other than the holders of Dissenting Shares) inexchange therefor (in accordance with such holder’s payment instructions) thePer Share Merger Consideration multiplied by the number of shares representedby such Certificate or held by such holder of Company Stock in uncertificatedform, without any interest thereon. In the event of a transfer of ownership ofshares of Company Stock that is not registered in the transfer records of theCompany, payment may be made with respect to such shares to such a transfereeif all documents are presented to the Paying Agent required to evidence andeffect such transfer and to evidence that any applicable stock transfer taxeshave been paid (including, in the case of certificated shares, the Certificatesrepresenting such shares).

###  

### (c)           Share Transfer Books. At andafter the Effective Time, there shall be no transfers on the share transferbooks of the Company of any shares of Company Stock that were outstandingimmediately prior to the Effective Time. If, after the Effective Time,Certificates of the Company are presented to the Surviving Corporation, theyshall be cancelled and the shares of Company Stock represented thereby shall beconverted as provided in Section 1.4.

###  

### (d)           Unclaimed Consideration. Sixmonths after the Effective Time, the Surviving Corporation shall cause thePaying Agent to deliver any portion of the Per Share Merger Consideration thatit holds and that remains unclaimed to the Surviving Corporation. Any holder ofCompany Stock immediately prior to the Effective Time

 

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### who has nottheretofore complied with this Section 1.9 shall thereafter look only tothe Surviving Corporation (subject to abandoned property, escheat or othersimilar Laws) for payment of any portion of the Per Share Merger Considerationthat may be payable upon surrender of any Certificates or in respect of anyuncertificated Company Stock such holder holds, as determined pursuant to thisAgreement, as a general creditor and without any interest thereon.

###  

### (e)           No Liability. None of theCompany, the Surviving Corporation, Parent and their Affiliates, the PayingAgent or any other Person shall be liable for any amount properly delivered toa public official pursuant to applicable abandoned property, escheat or similarLaws.

###  

### (f)            Lost Certificates. If anyCertificate shall have been lost, stolen or destroyed, upon the making of anaffidavit of that fact by the person claiming such Certificate to be lost,stolen or destroyed and, if required by the Company or the SurvivingCorporation, the posting by such person of a bond in such reasonable amount asthe Company or the Surviving Corporation may direct as indemnity against anyclaim that may be made against it with respect to such Certificate, the SurvivingCorporation shall direct the Paying Agent to issue in exchange for such lost,stolen or destroyed Certificate the Per Share Merger Consideration payable inrespect of the shares of Company Stock represented thereby pursuant to thisAgreement.

###  

1.10         WithholdingTaxes. The Paying Agent shall be entitled to deduct and withhold from thePer Share Merger Consideration, and the Surviving Corporation shall deduct andwithhold, or cause to be deducted or withheld, from any payment made pursuantto Section 1.5, any such amounts required to be deducted and withheld under theCode, or any applicable provision of U.S. federal, state, local or foreign Taxlaw. To the extent that amounts are so deducted and withheld, such deducted andwithheld amounts shall be treated for all purposes of this Agreement as havingbeen paid to the holders of Company Stock or of the award in respect of whichsuch deduction and withholding was made.

 

ARTICLE II

 

REPRESENTATIONS AND WARRANTIES

OF THE COMPANY

 

Except as (i) set forth in the disclosureletter delivered to Parent and MergerCo by the Company on the date hereof (the“Disclosure Letter”) or (ii) disclosed in the SEC Filings(excluding any forward looking disclosures set forth in any risk factorsection, any disclosures in any section relating to forward looking statementsand any other disclosures included therein to the extent they are primarilypredictive, cautionary or

 

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forward-looking in nature) filed withthe SEC prior to the date hereof, the Company represents and warrants to Parentand MergerCo as follows:

 

2.1           CorporateStatus, etc.

 

### (a)           Organization. Schedule 2.1(a)of the Disclosure Letter lists all of the Company’s Subsidiaries and theirrespective jurisdictions of organization. Each of the Company and itsSubsidiaries is an entity duly incorporated or, where applicable, duly formed,validly existing and, where such concept is recognized, in good standing underthe Laws of the jurisdiction of its organization, and has full corporate orother organizational power and authority to own, lease and operate its assetsand properties and to carry on its business as presently conducted. Each of theCompany and each of its Subsidiaries is duly qualified and, where such conceptis recognized, in good standing as a foreign corporation to do business in alljurisdictions in which it is required to be so qualified and in good standingand in which the failure to be so qualified and in good standing, individuallyor in the aggregate, would have a Material Adverse Effect.

###  

### (b)           Authorization, etc. TheCompany has full power and authority to enter into this Agreement and toperform its obligations hereunder. The execution, delivery and performance bythe Company of this Agreement have been duly authorized by the board ofdirectors of the Company and will be duly authorized by the Requisite Consentof Stockholders immediately after the entry into this Agreement, whichconstitute all requisite corporate authorization on the part of the Company forsuch action. This Agreement has been duly executed and delivered by the Companyand constitutes the valid and binding obligation of the Company, enforceableagainst the Company in accordance with its terms, except as limited by Lawsaffecting the enforcement of creditors’ rights generally or by generalequitable principles. The Company has provided Parent with complete and correctcopies of its certificate of incorporation and by-laws.

###  

2.2           Capitalization.

 

### (a)           The Company. As of the datehereof, the authorized capital stock of the Company consists of 7,000,000shares of Company Stock, all of which have been duly authorized, of which5,786,464.43 shares have been validly issued and are outstanding. Schedule2.2(a) of the Disclosure Letter sets forth, as of the date hereof, all Personsowning of record any outstanding shares of Company Stock and the number of suchshares owned by such Person.

###  

### (b)           Subsidiaries. All issued andoutstanding shares of capital stock of the Company’s Subsidiaries have been dulyauthorized and validly issued, are fully paid and nonassessable and are ownedby the Persons listed in Schedule 2.2(b) of the Disclosure Letter free andclear of any Liens other than restrictions on transfer imposed by applicableLaws.

 

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### (c)           Convertible Instruments. As ofthe date hereof, the Company has granted or issued and has outstanding CompanyOptions under the Stock Plan relating to 509,334 shares of Company Stock, RSUsrelating to 24,833 shares of Company Stock and DSUs relating to****17,123.51shares of Company Stock. All Company Options and RSUs will be vested andexercisable as of the Effective Time (unless earlier canceled or exercised inaccordance with their terms).

###  

### (d)           Agreements with Respect to CompanyStock, etc. Other than as set forth in the Stock Subscription Agreements,the Registration and Participation Agreement, the certificate of incorporationof the Company, or in Section 2.2(c) hereof, there are no (i) preemptiveor similar rights on the part of any holders of any class of securities of theCompany or any of its Subsidiaries; (ii) subscriptions, options,warrants, conversion, exchange or other rights, agreements, commitments,arrangements or understandings of any kind obligating the Company or any of itsSubsidiaries, contingently or otherwise, to issue or sell, or cause to beissued and sold, any shares of or other interest in capital stock of theCompany or any of its Subsidiaries or any securities convertible into orexchangeable for any such shares; (iii) stockholder agreements,voting trusts or other agreements or understandings to which the Company or anyof its Subsidiaries is a party or to which the Company or any of itsSubsidiaries is bound relating to the voting, purchase, redemption or otheracquisition of any shares of the capital stock of the Company or any of itsSubsidiaries; or (iv) outstanding dividends, whether current oraccumulated, due or payable on any of the capital stock of the Company or anyof its Subsidiaries.

###  

### (e)           Equity Interests. Except forthe Subsidiaries, the Company does not own any capital stock of or other equitysecurities or interests in any other Person. The Company is not a party to anystockholder agreements, voting trusts or other agreements or understandingsrelating to the voting, purchase, redemption or other acquisition of any sharesof capital stock or equity interests in any other Person.

###  

2.3           Conflicts,Consents.

 

### (a)           Conflicts. The execution anddelivery of this Agreement by the Company, and the performance of itsobligations hereunder (i) do not conflict with the organizationaldocuments of the Company or any of its Subsidiaries, (ii) subjectto obtaining the Consents referred to in Section 2.3(b) and to theaccuracy of the representation and warranty of Parent and MergerCo contained inSection 3.10, do not conflict with, violate, breach or result in a defaultunder (with or without the giving of notice or the lapse of time), give rise toa right of termination, cancellation, modification or acceleration of anyobligation or to the loss of any benefit under, any Permit or any Contract towhich the Company or any of its Subsidiaries is a party or by which any of themor their respective properties or assets are bound or result in the creation orimposition of any Liens other than Liens created by or resulting from theactions of Parent, MergerCo or any of their Affiliates, or (iii) violateany Law applicable to the

 

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### Company or any ofits Subsidiaries, except in the case of clauses (ii) or (iii) for suchconflicts, violations, breaches, defaults, terminations, cancellations,modifications, accelerations, losses of benefits and Liens that, individuallyor in the aggregate, would not reasonably be expected to have a MaterialAdverse Effect.

###  

### (b)           Consents. Except as may berequired under the HSR Act and applicable Non-U.S. Antitrust Laws or as setforth in Schedule 2.3(b) of the Disclosure Letter, no Consent of anyGovernmental Entity is required to be obtained by the Company or any of itsSubsidiaries in connection with the execution and delivery of this Agreement bythe Company or the performance of its obligations hereunder, except where thefailure to do so, individually or in the aggregate, would not reasonably beexpected to have a Material Adverse Effect.

###  

2.4           SECFilings; Financial Statements; Certain Compliance Matters.

 

### (a)           SEC Filings. The Company andits Subsidiaries have filed with the SEC all forms, reports, schedules,declarations, statements, applications and other documents required to be filedby them since December 31, 2005 under the Securities Act or the ExchangeAct (all forms, reports, schedules, declarations, statements, applications andother documents filed by them with the SEC under the Exchange Act sinceDecember 31, 2005, collectively, the “SEC Filings”). As of theirrespective filing dates (or, if amended prior to the date of this Agreement, asof the respective filing date of such amendment), the SEC Filings complied in allmaterial respects with the requirements of the Securities Act or the ExchangeAct, as the case may be, each as in effect on the date so filed, and at thetime filed with the SEC (or, if amended prior to the date of this Agreement, asof the respective filing date of such amendment), none of the SEC Filingscontained any untrue statement of a material fact or omitted to state amaterial fact required to be stated therein or necessary to make the statementstherein, in light of the circumstances under which they were made, notmisleading. As of the date of this Agreement, there are no outstanding orunresolved comments in comment letters received from the SEC staff with respectto the SEC Filings. To the Knowledge of the Company, none of the SEC Filings isthe subject of ongoing SEC review.

###  

### (b)           Financial Statements. Theaudited and unaudited financial statements of the Company (including any notesthereto) included in the SEC Filings (if amended prior to the date of thisAgreement, as amended) (the “Financial Statements”), when filed,complied in all material respects with the then applicable accountingrequirements and the published rules and regulations of the SEC with respectthereto, have been prepared in accordance with GAAP (except in the case of the unauditedstatements, as permitted by Form 10-Q and Regulation S-X under theExchange Act) applied on a consistent basis during the periods involved (exceptas may be indicated in the notes thereto) and fairly present in all materialrespects the consolidated financial position of the Company and itsconsolidated Subsidiaries as at the respective dates thereof and theconsolidated results of their operations and their consolidated cash flows forthe periods indicated (subject, in the

 

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### case of unauditedquarterly statements, to normal year-end audit adjustments and to any otheradjustments described therein, which were not and are not expected to bematerial in amount to the Company and its Subsidiaries taken as a whole).

###  

### (c)           Certain Compliance Matters.

###  

##### (i)            The Company is in compliance in allmaterial respects with the applicable provisions of the Sarbanes-Oxley Act.Each of the principal executive officer of the Company and the principalfinancial officer of the Company has made all certifications required byRule 15d-14 under the Exchange Act with respect to the SEC Filings. Forpurposes of this Agreement, “principal executive officer” and “principalfinancial officer” have the meanings given to such terms in theSarbanes-Oxley Act.

#####  

##### (ii)           The Company’s system of “internalcontrol over financial reporting” (as defined in Rule 15d-15(f) under theExchange Act) is reasonably sufficient in all material respects to providereasonable assurance (x) that transactions are recorded asnecessary to permit preparation of financial statements in accordance withGAAP, (y) that receipts and expenditures are being made only inaccordance with the authorization of management of the Company and (z) regardingprevention or timely detection of unauthorized acquisition, use or dispositionof the Company’s assets that could have a material effect on the Company’sfinancial statements.

#####  

##### (iii)          The Company’s “disclosure controls andprocedures” (as defined in Rule 15d-15(e) under the Exchange Act) arereasonably designed in all material respects to ensure that (x) informationrequired to be disclosed by the Company in the reports that it files or submitsunder the Exchange Act is recorded, processed, summarized and reported withinthe time periods specified in the rules and forms of the SEC and (y) allsuch information is accumulated and communicated to the Company’s management asappropriate to allow timely decisions regarding required disclosure and to makethe certifications of the principal executive officer and principal financialofficer of the Company required under the Exchange Act with respect to suchreports.

#####  

### (d)           Intercompany Indebtedness.With respect to each of the loans constituting Intercompany Indebtedness setforth in Section 2.4(d) of the Disclosure Letter, such section of theDisclosure Letter accurately sets forth the name of the lender of such loan,the name of the borrower of such loan and the outstanding principal amount ofsuch loan as of March 31, 2007 (collectively, the “Designated IntercompanyLoans”).

###  

2.5           Absenceof Undisclosed Liabilities. Except (i) as reflected or reservedagainst on the Company’s consolidated balance sheet for the fiscal year endedDecember 31, 2006, or the notes thereto, included in the FinancialStatements, (ii) for

 

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liabilities andobligations incurred in the ordinary course of business since December 31,2006, (iii) for liabilities and obligations incurred in connectionwith the Merger or any other transaction or agreement contemplated by thisAgreement, (iv) for liabilities and obligations that, individually or inthe aggregate, would not reasonably be expected to have a Material AdverseEffect, and (v) liabilities and obligations incurred at the request orwith the consent of Parent, the Company and its Subsidiaries have not incurredany liabilities or obligations that would be required to be set forth on aconsolidated balance sheet of the Company and its consolidated Subsidiaries preparedin accordance with GAAP in a manner consistent with the Financial Statements.

 

2.6           Absenceof Changes. Since December 31, 2006, there has not been and thereis not reasonably expected to be a Material Adverse Effect and, other than inconnection with this Agreement and the transactions contemplated hereby, (a) theCompany and its Subsidiaries have conducted their business in all materialrespects in the ordinary course, in substantially the same manner in which ithas been previously conducted and (b) none of the Company and itsSubsidiaries has taken any action that would, after the date hereof, beprohibited or omitted to take any action that would, after the date hereof, berequired, as the case may be, by clauses (a) through (n) of Section 4.1.

 

2.7           TaxMatters. Except as reserved against in the Financial Statements, and formatters that, individually or in the aggregate, would not reasonably beexpected to have Material Adverse Effect, (a) each Tax Returnrequired to have been filed by the Company or any of its Subsidiaries has beenfiled and is true and correct, (b) all Taxes of the Company and theSubsidiaries which are due and payable (whether or not shown as due and payableon any Tax Returns) have been paid or are being contested in good faith throughappropriate proceedings and for which adequate reserves have been establishedin the Financial Statements, (c) all Employment and WithholdingTaxes required to be paid or withheld by or on behalf of the Company or any ofits Subsidiaries have been paid or properly set aside in accounts for suchpurpose, (d) no written agreement or other document extending, orhaving the effect of extending, the period of assessment or collection of anyTaxes payable by the Company or any of its Subsidiaries is in effect as of thedate hereof, (e) neither the Company nor any of its Subsidiariesis, as of the date hereof, the beneficiary of any extension of time (other thanan automatic extension of time not requiring the consent of the IRS or anyother taxing authority) within which to file any Tax Return not previouslyfiled and (f) as of the date hereof, there are not pending anyaudits, claims, examinations or other proceedings in respect of Taxes payableby the Company or any of its Subsidiaries.

 

2.8           Litigation.There is no (i) judicial or administrative action, claim, suit, proceeding orinvestigation pending or, to the Knowledge of the Company, threatened againstthe Company or any of its Subsidiaries, in each case, before any GovernmentalEntity or before any arbitrator or (ii) outstanding order, writ, judgment,injunction or decree of any Governmental Entity, that (a) individuallyor in the aggregate, would

 

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reasonably be expected tohave a Material Adverse Effect or (b) question the validity of thisAgreement or any action taken or to be taken by the Company or any of itsSubsidiaries in connection herewith.

 

2.9           Compliancewith Laws; Permits.

 

### (a)           Neither the Company nor any of itsSubsidiaries is in, and none of the Company or any of its Subsidiaries is inreceipt of any notice of any, violation of any Law, permit, concession,franchise or other governmental authorization or approval applicable to it orto any of its properties, except for violations which, individually or in theaggregate, would not reasonably be expected to have a Material Adverse Effect.

###  

### (b)           All of the licenses and permitsissued by any Governmental Entity necessary to conduct the business of theCompany and its Subsidiaries as presently conducted (collectively, the “Permits”)have been duly obtained, are held by the Company or its Subsidiaries and are infull force and effect, except where such a failure, individually or in theaggregate, would not reasonably be expected to have a Material Adverse Effect.No event has occurred or other fact exists with respect to the Permits thatallows, or after notice or lapse of time or both would allow, revocation ortermination of any of the Permits or would result in any other impairment ofthe rights of the holder of any of the Permits that, individually or in theaggregate, would reasonably be expected to have a Material Adverse Effect.

###  

### (c)           This Section 2.9 does not relateto tax matters, employee benefits matters or environmental matters, which areprovided for in Sections 2.7, 2.10 and 2.16, respectively.

###  

2.10         EmployeeBenefits.

 

### (a)           Company Benefit Plans; EmploymentAgreements. Schedule 2.10(a)(i) of the Disclosure Letter lists eachmaterial Plan that is maintained or established by the Company or any of itsSubsidiaries and under which any current or former officer, director oremployee of the Company or any of its Subsidiaries, or the beneficiaries ordependents of any such person, is or will become eligible to participate orderive a benefit (the “Company Benefit Plans”). Schedule 2.10(a)(ii) ofthe Disclosure Letter lists each written employment, severance and retentionagreement other than any such agreement (i) that, by its terms, maybe terminated or canceled by the Company or any Subsidiary with notice of notmore than the greater of 120 days and the period of notice required underapplicable Law, in each case without penalty and (ii) providing forthe payment of annual salary and bonus or severance payments less than $350,000in any one case (the “Company Employment Agreements”).

###  

### (b)           Documents. With respect toeach Company Benefit Plan, the Company has made available to Parent copies ofthe following documents, to the extent applicable:

 

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### (i) themost recent Plan document and all amendments thereto; (ii) the mostrecent Form 5500 filed with the IRS; (iii) the most recentsummary plan description; and (iv) the most recent determinationletter issued by the IRS. The Company has made available to Parent copies ofthe Company Employment Agreements.

###  

### (c)           Compliance; Liability. EachCompany Benefit Plan has been operated and administered, and all contributionsrequired to be made by the Company and its Subsidiaries have been made, inaccordance with their terms and with applicable Law, except for any failure todo so that, individually or in the aggregate, would not reasonably be expectedto have a Material Adverse Effect. There is no pending or, to the Knowledge ofthe Company, threatened material legal action, suit or claim relating to theCompany Benefit Plans (other than routine claims for benefits).

###  

### (d)           Tax Qualification. EachCompany Benefit Plan that is intended to be qualified under Section 401(a)of the Code has received a favorable determination letter from the IRS as toits qualification under the Code and to the effect that each such trust isexempt from taxation under section 501(a) of the Code, and, to theKnowledge of the Company, nothing has occurred since the date of such determinationletter that will adversely affect such qualification or tax-exempt status.

###  

### (e)           Title IV of ERISA. Except asset forth on Schedule 2.10(e) of the Disclosure Letter, (i) neither theCompany nor any ERISA Affiliate has incurred any material liability under TitleIV of ERISA or is subject to Section 302 of ERISA or Section 412 ofthe Code, and no event, transaction or condition exists that would result inany material liability to the Surviving Corporation or any ERISA Affiliatefollowing the Closing, and (ii) no Company Benefit Plan is a“multiemployer plan” as defined in Section 3(37) of ERISA or “multipleemployer plan” under Section 4063 of ERISA.

###  

### (f)            Triggering Events. Except asset forth on Schedule 2.10(f) of the Disclosure Letter, neither the executionof this Agreement nor the performance of the obligations hereunder by theCompany or its Subsidiaries shall by itself require a payment, or cause theaccelerated vesting of a right to a payment, under any Company Benefit Plan orunder any Company Employment Agreement. The performance of the obligationshereunder by the Company or its Subsidiaries will not result in any paymentunder any Company Benefit Plan or under any Company Employment Agreement to anyemployee, officer, or director of the Company or its Subsidiaries that wouldconstitute an “excess parachute payment” for purposes of Section 280G or4999 of the Code.

###  

2.11         LaborMatters. No labor strike, labor dispute, or concerted work stoppage iscurrently pending or, to the Knowledge of the Company, threatened with respectto any Employee of the Company or its Subsidiaries, except as would notreasonably be expected, individually or in the aggregate, to have a MaterialAdverse Effect. The Company and its Subsidiaries are in compliance with all applicablelabor Laws in connection with the employment of their Employees, except forsuch non-compliance

 

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that, individually or inthe aggregate, would not reasonably be expected to have a Material Adverse Effect.Except as set forth on Schedule 2.11 of the Disclosure Letter, the Company isneither party to nor bound by any Contract or other agreement with any laborunion representing its Employees or collective bargaining agreement and, to theKnowledge of the Company, there are no activities or proceedings of any laborunion to organize any such Employees.

 

2.12         RealProperty; Tangible Property.

 

### (a)           Schedule 2.12(a) of theDisclosure Letter lists the address of all material items of real propertyeither owned by the Company or its Subsidiaries (the “Owned Real Property”)or leased by the Company or its Subsidiaries (the “Leased Real Property”),in each case as of the date hereof. The Company or one of its Subsidiaries hasgood title to the Owned Real Property listed on Schedule 2.12(a) and a validleasehold interest in the Leased Real Property listed on Schedule 2.12(a),in each case free and clear of all Liens except for Permitted Liens.

###  

### (b)           The Owned Real Property and theLeased Real Property, together with easements appurtenant thereto, include allof the material real property necessary for the conduct of the business of theCompany and its Subsidiaries, as conducted on the date hereof.

###  

### (c)           Schedule 2.12(c) of the DisclosureLetter contains a complete and correct list of all real property leasesrelating to the Leased Real Property to which the Company or any of itsSubsidiaries is a party or is bound (the “Leases”). The Company has madeavailable to Parent correct and complete copies of the Leases. Each of theLeases (including any option to purchase contained therein) is in full forceand effect and, to the Knowledge of the Company, is enforceable against thelandlord which is party thereto in accordance with its terms, and there existsno default or event of default (or any event that with notice or lapse of timeor both would become a default) on the part of the Company or any of itsSubsidiaries under any Leases, except for such failures to be in full force andeffect and defaults as, individually or in the aggregate, would not reasonablybe expected to have a Material Adverse Effect.

###  

2.13         IntellectualProperty.

 

### (a)           Schedule 2.13(a) of the DisclosureLetter lists all material trademarks, trade names, service marks, copyrightsand patents that, as of the date hereof, are registered or subject to anapplication for registration (collectively, “Intellectual Property”)that are owned by the Company or any of its Subsidiaries as of the date hereofand are necessary for the conduct of the business of the Company or any of itsSubsidiaries, as conducted on the date hereof (“Owned Intellectual Property”).Except for infringements, claims, demands, proceedings and defects in rightsthat, individually or in the aggregate, would not reasonably be expected tohave a Material Adverse Effect,

 

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### (i) tothe Knowledge of the Company, the use of the Owned Intellectual Property by theCompany and its Subsidiaries as currently used does not infringe on theIntellectual Property rights of any Person and (ii) there is noclaim or demand of any Person pertaining to, or any proceeding that is pendingor, to the Knowledge of the Company, threatened that challenges the rights ofthe Company or any of its Subsidiaries in respect of, any Owned IntellectualProperty.

###  

### (b)           Schedule 2.13(b) of the DisclosureLetter lists, as of the date hereof, all material written licenses toIntellectual Property (other than licenses for “off-the-shelf” software) towhich the Company or any of its Subsidiaries is a party, pursuant to which (i) theCompany or such Subsidiary permits any Person to use any of the OwnedIntellectual Property owned by the Company or such Subsidiary, or (ii) anyPerson permits the Company or such Subsidiary to use any Intellectual Propertynot owned by the Company or such Subsidiary that are necessary for the conductof the business of the Company or any of its Subsidiaries as conducted on thedate hereof (collectively, the “Licenses”). The Company has madeavailable to Parent copies of all of the Licenses. Neither the Company nor anyof its Subsidiaries, nor, to the Knowledge of the Company, any other partythereto, is in default under any License, and each License is in full force andeffect as to the Company or Subsidiary thereof party thereto and, to theKnowledge of the Company, as to each other party thereto, except for suchdefaults and failures to be so in full force and effect as, individually or inthe aggregate, would not have a Material Adverse Effect.

###  

2.14         Contracts.Schedule 2.14 of the Disclosure Letter lists, as of the date hereof, all ListedContracts. The term “Listed Contracts” means all of the following typesof Contracts to which the Company or any of its Subsidiaries is a party or bywhich the Company or any of its Subsidiaries or any of their respectiveproperties is bound as of the date hereof (other than organizational documentsof any of the Subsidiaries, agreements related to employee benefits, agreementsrelated to labor matters, real property leases and agreements related tointellectual property, the last four of which are provided for solely inSections 2.10, 2.11, 2.12 and 2.13, respectively):

 

(a)           each Contract filed as an exhibit tothe SEC Filings pursuant to Item 601(b)(10) of Regulation S-K;

 

(b)           any Contract relating to Indebtednessof the Company or any of its Subsidiaries with a principal amount ofIndebtedness outstanding under such Contract in excess of $1,000,000;

 

(c)           any joint venture, limitedpartnership, limited liability company or other similar Contract relating tothe formation, operation, management or control of any material partnership orjoint venture;

 

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(d)           any agreement containing anon-competition provision materially limiting the ability of the Company andits Subsidiaries, taken as a whole, to compete in any line of business orgeographical area;

 

(e)           stock purchase agreements, assetpurchase agreements and other acquisition or divestiture agreements relating tothe acquisition, lease or disposition by the Company or its Subsidiaries ofmaterial assets and properties (other than in the ordinary course of business)or any capital stock or other equity interest of the Company or itsSubsidiaries, in each case which was entered into by the Company or itsSubsidiaries after December 31, 2004;

 

(f)            stockholder agreements, votingtrusts or other agreements or understandings to which the Company or any of itsSubsidiaries is a party or to which the Company or any of its Subsidiaries isbound relating to the voting, purchase, redemption or other acquisition of anyshares of the capital stock of the Company or any of its Subsidiaries;

 

(g)           any Contract pursuant to which theCompany or any of its Subsidiaries purchased in 2006 or reasonably expects topurchase in 2007 products for resale to the customers of the Company and itsSubsidiaries (“Supply Contracts”) representing greater than 2% of theaggregate actual or reasonably anticipated cost to the Company and itsSubsidiaries of all products purchased or reasonably expected to be purchasedfor resale during such period;

 

(h)           any Contract providing for the saleof products or services by the Company or any of its Subsidiaries (“CustomerContracts”) pursuant to which the Company or any of its Subsidiaries soldin 2006 or reasonably expects to sell in 2007 products or services representinggreater than 2% of the actual or reasonably anticipated aggregate revenue ofthe Company and its Subsidiaries with respect to all products or services soldor reasonably expected to be sold during such period; and

 

(i)            any other Contract (except forSupply Contracts and Customer Contracts), entered into other than in theordinary course of business pursuant to which the Company and its Subsidiariesmade or received payments in excess of $1,000,000 during 2006 or reasonablyexpect to make or receive payments in excess of such amount during 2007.

 

The Company has made available to Parent copies of allof the Listed Contracts. Each Listed Contract is a valid and binding agreementof the Company or one of its Subsidiaries (subject to the effects ofbankruptcy, insolvency, reorganization, moratorium or other Laws relating to oraffecting creditors’ rights generally and to general equity principles) and isin full force and effect, and neither the Company nor any of its Subsidiariesnor, to the Knowledge of the Company, any

 

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other Person, is in default under anyListed Contract, except for such failures to be in full force and effect anddefaults as would not, individually or in the aggregate, reasonably be expectedto have a Material Adverse Effect.

 

2.15        Insurance.Schedule 2.15 of the Disclosure Letter lists all of the material policies ofinsurance currently maintained by or for the benefit of the Company or itsSubsidiaries.

 

2.16        EnvironmentalMatters. Except as, individually or in the aggregate, would not reasonablybe expected to have a Material Adverse Effect:

 

(a)           to the Knowledge of the Company, theCompany and its Subsidiaries are in compliance with all applicableEnvironmental Laws;

 

(b)           to the Knowledge of the Company, theCompany and its Subsidiaries have obtained, and are in compliance with, allpermits and authorizations required under applicable Environmental Laws;

 

(c)           neither the Company nor any of itsSubsidiaries has received from any Governmental Entity any written notice ofviolation, alleged violation, non-compliance, liability or potential liabilityregarding compliance with applicable Environmental Laws, other than mattersthat have been resolved or that are no longer outstanding;

 

(d)           no judicial proceeding orgovernmental or administrative action is pending under any applicableEnvironmental Law pursuant to which the Company or any of its Subsidiaries isnamed as a party; and

 

(e)           neither the Company nor any of itsSubsidiaries has entered into any agreement with any Governmental Entitypursuant to which the Company or any of its Subsidiaries has any continuingobligations with respect to the remediation of any condition resulting from therelease or threatened release of Hazardous Substances.

 

To the Knowledge of the Company, the Company hasprovided to Parent and MergerCo copies of all material environmental reports,audits, assessments, and investigations related to the present facilities,properties or operations of the Company and its Subsidiaries, to the extent theforegoing (i) were prepared on or after January 1, 2004, (ii) arein the possession, custody, or control of the Company or any of itsSubsidiaries and (iii) are not subject to attorney-client or similar privilege.Notwithstanding any of the representations and warranties contained elsewherein this Agreement, matters relating to Environmental Laws and HazardousSubstances shall be governed exclusively by Section 2.5 and thisSection 2.16.

 

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2.17         AffiliateTransactions. Except as set forth in Schedule 2.17 of the DisclosureLetter, neither the Company nor any of its Subsidiaries is a party to anyagreement with any Affiliate (other than the Company or its Subsidiaries) orany shareholder of the Company. As of the Closing Date, all agreements setforth in Schedule 2.17 of the Disclosure Letter will have been terminated,except as otherwise described on such Schedule.

 

2.18         Brokers.Other than with respect to Persons whose fees and expenses will be paidpursuant to Section 1.3(c)(ii), all negotiations relating to thisAgreement and the transactions contemplated hereby have been carried outwithout the intervention of any Person acting on behalf of the Company in suchmanner as to give rise to any valid claim against Parent, MergerCo or theSurviving Corporation for any brokerage or finder’s commission, fee or similarcompensation**.**

 

ARTICLE III

 

REPRESENTATIONS AND WARRANTIES OFPARENT AND MERGERCO

 

Parent and MergerCo,jointly and severally, represent and warrant to the Company as follows:

 

3.1           CompanyStatus. Parent is a limited liability company duly organized, validlyexisting and in good standing under the Laws of the state of Delaware. MergerCois a corporation duly incorporated, validly existing and in good standing underthe Laws of the state of Delaware.

 

3.2           Authorization,etc. Each of Parent and MergerCo has full power and authority to enter intothis Agreement and to perform its obligations hereunder. The execution,delivery and performance by Parent and MergerCo of this Agreement have beenduly authorized by the board of managers and board of directors, respectively,of Parent and MergerCo and by Parent as sole stockholder of MergerCo, whichconstitutes all requisite organizational authorization on the part of eachParent and MergerCo for such action. This Agreement has been duly executed anddelivered by each of Parent and MergerCo and constitutes the valid and bindingobligation of each of Parent and MergerCo, enforceable against each of Parentand MergerCo in accordance with its terms, except as limited by Laws affectingthe enforcement of creditors’ rights generally or by general equitableprinciples.

 

3.3           NoConflicts; Consents.

 

### (a)           Conflicts. The execution anddelivery of this Agreement by each of Parent and MergerCo and the performanceof its obligations hereunder (i) do not conflict

 

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### with theorganizational documents of Parent or MergerCo, (ii) subject toobtaining the Consents referred to in Section 3.3(b), do not conflictwith, violate, breach or result in a default under (with or without the givingof notice or the lapse of time), give rise to a right of termination,cancellation, modification or acceleration of any obligation or to the loss ofany benefit under, any Contract to which Parent or MergerCo is a party or bywhich any of them or their respective properties or assets are bound or resultin the creation or imposition of any Liens, or (iii) violate anyLaw applicable to Parent or MergerCo or any of Parent’s Affiliates, except inthe case of clauses (ii) or (iii) for such conflicts, violations,breaches, defaults, terminations, cancellations, modifications, accelerations,losses of benefits and Liens that would not, individually or in the aggregate,reasonably be expected to materially impair the ability of Parent or MergerCoto perform its obligations hereunder.

###  

### (b)           Consents. Except as requiredunder the HSR Act and applicable Non-U.S. Antitrust Laws or as set forth inSchedule 3.3(b) of the Disclosure Letter, no Consent of any Governmental Entityis required to be obtained by Parent or MergerCo in connection with theexecution and delivery of this Agreement or the performance of its obligationshereunder, except where the failure to do so would not, individually or in theaggregate, reasonably be expected to materially impair the ability of Parent orMergerCo to perform its obligations hereunder.

###  

3.4           Litigation.There is no judicial or administrative action, claim, suit, proceeding orinvestigation pending or, to the knowledge of Parent or MergerCo, threatenedagainst Parent or MergerCo, in each case before any Governmental Entity, thatquestions the validity of this Agreement or any action taken or to be taken byParent or MergerCo in connection herewith.

 

3.5           Financing.Parent has delivered to the Company true and complete copies of (a) anexecuted commitment letter from Madison Dearborn Capital Partners V-A, L.P.,Madison Dearborn Capital Partners V-C, L.P., and Madison Dearborn CapitalPartners V Executive-A, L.P. (collectively, the “Equity Funds”) toprovide equity financing in an aggregate amount of $1.425 billion to fund aportion of the amounts to be paid by MergerCo pursuant to Section 1.3(c) (the “EquityCommitment Letter”), which Equity Commitment Letter names the Company as athird party beneficiary thereof, and (b) executed commitmentletters (the “Debt Commitment Letters”) from****Bankof America, N.A., Banc of America Bridge LLC, Banc of America Securities LLC,Goldman Sachs Credit Partners L.P., J.P. Morgan Securities Inc. and JPMorganChase Bank, N.A.****(the “Debt Financing Sources”)to provide Parent and MergerCo with (i) $1.665 billion in seniorsecured debt financing (the “Senior Secured Financing”) and (ii) $1.145billion in bridge financing (the “Bridge Financing”, and together withthe Senior Secured Financing and any high yield debt financing used to fund theacquisition in lieu of the Bridge Financing (the “High Yield Financing”)being collectively referred to as the “Debt Financing”, and togetherwith the equity financing referred to in clause (a)

 

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being collectivelyreferred to as the “Financing”). Subject to its terms and conditions,the Financing, when funded in accordance with the Equity Commitment Letter andthe Debt Commitment Letters, will provide Parent and MergerCo with financingsufficient to pay the amounts to be paid by MergerCo pursuant to Section 1.3(c)and all of Parent and MergerCo’s fees and expenses associated with thetransactions contemplated by this Agreement and the Financing. Each of theEquity Commitment Letter and the Debt Commitment Letters, in the form sodelivered, is valid, binding and in full force and effect and no event hasoccurred which, with or without notice, lapse of time or both, would reasonablybe expected to constitute a default or breach on the part of Parent or MergerCounder any term or condition of the Equity Commitment Letter or the DebtCommitment Letters. There are no conditions precedent or other contingenciesrelated to the funding of the full amount of the Financing other than asspecifically set forth in the Equity Commitment Letter and the Debt CommitmentLetters. Parent and MergerCo have no reason to believe that any of theconditions to the Financing will not be satisfied on a timely basis. Parent andMergerCo have fully paid any and all commitment fees and other fees required bythe Debt Commitment Letters to be paid as of the date hereof. Assuming nodefault by the Debt Financing Sources in respect of the Debt Financing, Parentand MergerCo shall have at the Closing proceeds in connection with theFinancing in an amount sufficient to pay the amounts to be paid by MergerCopursuant to Section 1.3(c) and all of Parent and MergerCo’s fees and expensesassociated with the transactions contemplated in this Agreement and theFinancing.

 

3.6           Guarantee.Concurrently with the execution of this Agreement, Parent has delivered to theCompany the guarantee of the Equity Funds (the “Guarantors”) in the formattached as Exhibit A to this Agreement (the “Guarantee”). TheGuarantee is valid, binding and in full force and effect, and no event hasoccurred that would reasonably be expected to result in a breach of, or adefault under, the Guarantee on the part of the Guarantors.

 

3.7           Brokers.All negotiations relating to this Agreement and the transactions contemplatedhereby have been carried out without the intervention of any Person acting onbehalf of Parent or MergerCo in such manner as to give rise to any valid claimagainst Parent, MergerCo or the Company for any brokerage or finder’scommission, fee or similar compensation, except for JPMorgan Securities whosefees in respect hereof shall be paid by Parent.

 

3.8           Formationof MergerCo; No Prior Activities. MergerCo was formed solely for thepurpose of engaging in the transactions contemplated by this Agreement. As ofthe date hereof and the Closing Date, except for (i) obligations orliabilities incurred in connection with its incorporation or organization andthe transactions contemplated by this Agreement and (ii) thisAgreement and any other agreements or arrangements contemplated by thisAgreement or in furtherance of or in connection with the transactionscontemplated hereby, MergerCo has not incurred, directly or indirectly,

 

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through any Subsidiary orAffiliate, any obligations or liabilities or engaged in any business activitiesof any type or kind whatsoever or entered into any agreements or arrangementswith any Person.

 

3.9           NoKnowledge of Misrepresentations or Omissions. Parent and MergerCo have noknowledge that any of the representations and warranties of the Company in thisAgreement are not true and correct in all material respects, and Parent andMergerCo have no knowledge of any material errors in, or material omissionsfrom, the Disclosure Letter.

 

3.10         CertainAcquisitions. Since April 1, 2007, none of Parent, MergerCo, MadisonDearborn Partners, LLC or any of their respective Affiliates has acquired anyadditional business (x) engaged in the manufacture, distribution, and sale ofchemical products for use in the industrial or research and development fieldsand, as a result of such acquisition, become a Merck Competitor or (y) engagedin the manufacture and sale of chemical products for use in the industrial orresearch and development fields and, as a result of such acquisition, become aProhibited Merck Competitor.

 

ARTICLE IV

 

COVENANTS

 

4.1           Conductof the Company and its Subsidiaries. Except as set forth in Schedule 4.1 ofthe Disclosure Letter, as contemplated hereby or with the prior written consentof Parent (which consent shall not be unreasonably withheld or delayed), fromthe date hereof to the Effective Time, the Company shall, and shall cause itsSubsidiaries to, conduct its business in all material respects in the ordinarycourse, in substantially the same manner in which such business is conducted asof the date hereof, and to the extent consistent with such business shall useits reasonable best efforts to preserve intact its present businessorganization and to preserve its relationships with customers, suppliers andothers having business dealings with it. Without limiting the generality of theforegoing, except as set forth in Schedule 4.1 of the Disclosure Letter, ascontemplated hereby or with the prior written consent of Parent (which consentshall not be unreasonably withheld or delayed), from the date hereof to theEffective Time:

 

(a)           the Company shall not amend itscertificate of incorporation or by-laws or take, agree to take or authorize anyaction to wind up its affairs or dissolve;

 

(b)           none of the Company or itsSubsidiaries shall amend any Company Benefit Plan in any material respect orestablish any new arrangement that would (if it were in effect on the datehereof) constitute a Company Benefit Plan, nor shall the Company or itsSubsidiaries enter into any retention, loan, severance or

 

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other similar types ofagreements with, or take any action to increase the compensation of, itsemployees or officers, other than in the ordinary course of business in amanner consistent with past practice (including ordinary renewals of health andwelfare benefit plans) or to the extent required under any Company BenefitPlan, collective bargaining agreement, labor agreement, works council agreementor other contractual arrangement or by applicable Law;

 

(c)           none of the Company or itsSubsidiaries shall (i) redeem or repurchase, directly or indirectly, any sharesof the capital stock of the Company or its Subsidiaries (other than pursuant tothe terms of awards under the Stock Plan), (ii) reclassify, combine, split,subdivide or amend the terms of any of its capital stock, (iii) declare or payany dividends or distributions, with respect to any shares of its capital stock(other than dividends paid by the Company’s wholly-owned Subsidiaries to theCompany or its wholly-owned Subsidiaries) or (iv) enter into any agreement withrespect to the voting of its capital stock;

 

(d)           none of the Company or itsSubsidiaries shall issue, sell, pledge, transfer or encumber any equitysecurities of the Company or its Subsidiaries, securities convertible intoequity securities of any of the Company or its Subsidiaries or warrants,options or other rights to acquire any such securities (other than pursuant tothe exercise of Company Options or the conversion of RSUs and DSUs outstandingon the date hereof in accordance with the terms of such instruments and theterms of the Stock Plan);

 

(e)           none of the Company or itsSubsidiaries shall sell, assign, transfer, abandon or allow to lapse, pledge orencumber, or grant any Lien, other than a Permitted Lien, on any of itsmaterial assets and properties, except in the ordinary course of business in amanner consistent with past practice;

 

(f)            the Company and its Subsidiariesshall not make any material change to its accounting procedures or practices,except as required by GAAP or applicable Law;

 

(g)           none of the Company or itsSubsidiaries shall cancel without reasonable consideration any material debtsowing to or held by any of the Company or its Subsidiaries, except for debtscancelled in the ordinary course of business in a manner consistent with pastpractice in connection with collection of accounts receivable and settlement ofclaims against any of the Company or its Subsidiaries;

 

(h)           none of the Company or itsSubsidiaries shallmake any material loan or advance to, or any investment in, any other Person,other than loans, advances or investments to or in any Subsidiary or in theordinary course of business consistent with past practice;

 

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(i)            none of the Company or itsSubsidiaries shall, other than in the ordinary course of business in a mannerconsistent with past practice (i) enter into, terminate (other thanas a result of the expiration of such Contract’s term), amend or modify anyListed Contract or Contract that would be a Listed Contract had such Contractbeen in effect on the date hereof or (ii) settle or compromise anymaterial actions, suits, investigations, arbitrations or proceedings or enterinto any consent, injunction or similar restraint or equitable relief insettlement of any material actions, suits, investigations, arbitrations orproceedings;

 

(j)            none of the Company or itsSubsidiaries shall, (i) incur any Indebtedness (other than pursuantto the terms of the Credit Agreement as in effect on the date hereof in theordinary course of business) or vary the material terms of any existing debtsecurities, (ii) issue or sell any debt securities, or (iii) takeany steps to mortgage or pledge to secure any material obligation, or subjectto any material Lien, any of their material properties other than pursuant tothe terms of the Credit Agreement as in effect on the date hereof;

 

(k)           none of the Company or itsSubsidiaries shall transfer, assign, repay, discharge, satisfy or otherwisereduce in any respect any of the Designated Intercompany Loans (including byentering into offsetting loan transactions that would have the effect of thesame);

 

**(l)           **noneof the Company or its Subsidiaries shall**acquire (other thanpurchases of inventory or equipment in the ordinary course of businessconsistent with past practice) any material business;**

 

**(m)         **none of the Company or itsSubsidiaries shall**make any capital expenditures in excess of $25 million inthe aggregate;**

 

(n)           none of the Company or itsSubsidiaries shall make any Tax election inconsistent with most recentpractice, change any existing Tax election or annual accounting period, changeany Tax accounting method, file any amended Tax Return, enter into any Taxclosing agreement, settle any Tax claim or assessment relating to the Companyor its Subsidiaries in excess of the amount reserved therefor in the FinancialStatements, or surrender any right to claim a refund of Taxes, except wheresuch election, change, amendment, agreement, settlement, surrender, consent, orother action would not have a Material Adverse Effect; and

 

(o)           none of the Company or itsSubsidiaries shall enter into any agreement or otherwise make a commitment todo any of the foregoing.

 

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4.2           Satisfaction of ClosingConditions; Filings.

 

(a)           Subject to the termsand conditions of this Agreement, each of Parent, MergerCo and the Companyshall use its reasonable best efforts to cause the Closing to occur, including,without limitation, (i) taking such actions as are contemplated bySection 4.2(b) and (ii) defending against any suits, actionsor proceedings, judicial or administrative, challenging this Agreement or theconsummation of the transactions contemplated hereby, including seeking to haveany temporary restraining order, preliminary injunction or other legalrestraint or prohibition entered or imposed by any court or other GovernmentalEntity and that is not yet final and non-appealable to be vacated or reversed; providedthat none of the parties hereto or their respective Affiliates shall berequired to make any material monetary expenditure, commence or be a plaintiffin any litigation or other proceeding or offer or grant any materialaccommodation (financial or otherwise) to any Person except, in the case ofParent, as provided in Sections 4.2(b), 4.2(c) and 4.2(e). Immediately afterthe entry into this Agreement by the parties hereto, the Company shall obtainthe Requisite Consent of Stockholders to approve and adopt this Agreement. Priorto the Effective Time, none of Parent, MergerCo, Madison Dearborn Partners, LLCor any of their respective Affiliates shall acquire any additional businessengaged in the manufacture, distribution, and sale of chemical products for usein the industrial or research and development fields and, as a result of suchacquisition, become a Merck Competitor.

###  

### (b)           Each party hereto shall(i) make the filings required of it or any of its Affiliates underthe HSR Act and any Non-U.S. Antitrust Laws in connection with this Agreementand the transactions contemplated hereby as promptly as practicable followingthe date hereof, (ii) comply at the earliest practicable date andafter consultation with the other parties hereto with any request foradditional information or documentary material received by it or any of itsAffiliates from the Federal Trade Commission (the “FTC”), the AntitrustDivision of the Department of Justice (the “Antitrust Division”), theEuropean Commission or any other Governmental Entity, (iii) cooperatewith the other parties hereto in connection with any filing under the HSR Actand any Non-U.S. Antitrust Laws and in connection with resolving anyinvestigation or other inquiry concerning the transactions contemplated by thisAgreement initiated by the FTC, the Antitrust Division, the European Commissionor any other Governmental Entity, (iv) cause the waiting periodsunder the HSR Act to terminate or expire at the earliest possible date; and (v)take any other action reasonably necessary to obtain the consents, approvalsand authorizations required for the consummation of the transactionscontemplated by this Agreement at the earliest possible date; providedthat in the case of a joint filing, Parent shall be responsible for thepreparation and, with the prior written consent of the Company or itsSubsidiaries, which consent shall not be unreasonably withheld or delayed, themaking of such filing.

 

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### (c)           For purposes of thisSection 4.2, without limiting the foregoing, required actions by Parentshall include acceptance by Parent of any and all divestitures of anySubsidiary or assets of the Parent or its Affiliates or the Company or itsSubsidiaries or acceptance of an agreement to hold any assets of Parent or itsAffiliates or the Company or its Subsidiaries separate in any action, suit orproceeding, whether judicial or administrative and whether required by the FTC,the Antitrust Division, the European Commission or any other applicable GovernmentalEntity in connection with the transactions contemplated by this Agreement.

###  

### (d)           Each party hereto shallpromptly inform the other parties of any material communication made to, orreceived by such party from, the FTC, the Antitrust Division, the EuropeanCommission or any other Governmental Entity regarding any of the transactionscontemplated by this Agreement.

###  

### (e)           The filing fee underthe HSR Act and any fee or payment to a Governmental Entity under any Non-U.S.Antitrust Laws shall be borne by Parent.

###  

4.3           Access and Information.

 

### (a)           Prior to the Closing,and subject to the restrictions set forth in the Confidentiality Agreementdated March 5, 2007, between Madison Dearborn Partners, LLC and the Company(the “Confidentiality Agreement”), the Company and each of itsSubsidiaries shall permit Parent and its Debt Financing Sources and theirrespective representatives after the date of execution of this Agreement tohave reasonable access at reasonable times as coordinated by Goldman to theproperties, books, records and management employees, of the Company and itsSubsidiaries, other than any personnel information protected by applicableprivacy Laws, and shall furnish such information and documents in itspossession relating to the Company and its Subsidiaries as Parent mayreasonably request, provided that such access does not unreasonablyinterfere with the conduct of the business of the Company or its Subsidiariesor any of their Affiliates. All information provided or obtained pursuant tothe foregoing shall be held by Parent, and Parent shall cause itsrepresentatives to hold such information, in accordance with and subject to theterms of the Confidentiality Agreement.

###  

### (b)           Following the Closing,Parent, the Surviving Corporation and each of its Subsidiaries will affordpromptly to the former holders of Company Stock and their agents reasonableaccess to the properties, books, records, employees and auditors of theSurviving Corporation and its Subsidiaries to the extent necessary to permit suchholders to determine any matter relating to their rights and obligationshereunder or to any period ending on or before the Closing Date or any taxableperiod beginning on or before the Closing Date; provided that any suchaccess by such holders is at their own expense and does not unreasonablyinterfere with the conduct of the business of the Surviving Corporation orParent.

 

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4.4           Contact with Customers, Suppliers,etc. From the date of execution of this Agreement, Parent and MergerCo (andall of the agents and Affiliates thereof (other than portfolio companies ofsuch Affiliates in the ordinary course of their businesses) and any employees,directors and officers thereof) shall contact and communicate with theemployees, consultants, customers, suppliers or other Persons having a businessrelationship with the Company and its Subsidiaries in connection with thetransactions contemplated hereby only with the prior written consent of thepresident, chief executive officer, chief financial officer or general counselof the Company, which consent shall not be unreasonably withheld or delayed andmay be conditioned upon an officer of the Company being present at any suchmeeting or conference.

 

4.5           Publicity. Except as requiredby applicable Law, Parent and MergerCo shall not, directly or indirectly, makeor cause to be made any public announcement or issue any notice in respect ofthis Agreement or the transactions contemplated hereby without the prior writtenconsent of the Company, and the Company shall not, directly or indirectly, makeor cause to be made any such public announcement or issue any notice withoutthe prior written consent of Parent. The Company and Parent shall consult witheach other prior to issuing, or, in the case of Parent, permitting MergerCo toissue, any press releases or otherwise making public statements with respect tothe transactions contemplated hereby and prior to making any filings with anyGovernmental Entity or with any national securities exchange with respectthereto.

 

4.6           Employee Matters. From andafter the Closing Date, employees of the Company and its Subsidiaries on theClosing Date (the “Employees”) shall continue their employment with theSurviving Corporation and its Subsidiaries. During the period commencing on theClosing Date and ending on December 31, 2008, Parent shall, or shall cause theSurviving Corporation and its Subsidiaries to, provide (i) each Employee withwages or salaries, and bonus opportunities and severance, as applicable, thatare at least equal to the wages or salaries, and bonus opportunities andseverance, as applicable, of such Employee in effect immediately prior to theEffective Time and (ii) each Employee and former Employee with benefits (otherthan equity incentive benefits), in the aggregate, substantially comparable tothose in effect immediately prior to the Effective Time. From and after theClosing Date, Parent shall, and shall cause the Surviving Corporation and itsSubsidiaries to, honor, pay, perform and satisfy any and all liabilities,obligations and responsibilities to or in respect to each Employee, formerEmployee or director of the Company or any of its Subsidiaries under the termsof each Company Benefit Plan and each agreement or other written arrangementbetween the Company or any such Subsidiary and any such Employee, formerEmployee or director, in each case, as in effect immediately prior to theEffective Time for purposes of eligibility and vesting. Parent shall usereasonable commercial efforts to cause each Plan (including, but not limited toeach severance plan or arrangement) maintained or contributed to by Parent orany of its Subsidiaries and in which an Employee participates or willparticipate to provide credit for any employee co-insurance or similar amounts

 

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and to recognize all service of such Employee with theCompany or any of its Subsidiaries for purposes of eligibility and vesting and,if applicable, to waive any exclusions for preexisting conditions. Nothingcontained herein, express or implied: (i) shall be construed to establish,amend, or modify any benefit plan, program, agreement or arrangement, (ii)shall alter or limit the Parent’s or the Company’s ability to amend, modify orterminate any benefit plan, program, agreement or arrangement, (iii) isintended to confer upon any current or former employee any right to employmentor continued employment for any period of time by reason of this Agreement, or anyright to a particular term or condition of employment, or (iv) is intended toconfer upon any individual (including employees, retirees, or dependents orbeneficiaries of employees or retirees) any right as a third-party beneficiaryof this Agreement.

 

4.7           Transfer Taxes. Parent shallbe liable for all transfer, stamp, real estate gains and other similar Taxesarising from the transactions contemplated by this Agreement. Parent shall fileall Tax Returns relating to such Taxes.

 

4.8           Indemnification of Directors andOfficers.

 

### (a)           From and after theClosing Date, Parent shall, and shall cause the Surviving Corporation and itsSubsidiaries to, to the fullest extent permitted under applicable Law and theirrespective organizational documents as in effect on the date hereof, tomaintain their existing indemnification provisions with respect to, andindemnify and hold harmless, each present and former director and officer ofthe Company and its Subsidiaries (collectively, the “Indemnified Parties”)against any and all costs or expenses (including travel expenses and reasonableattorneys’ fees), judgments, fines, losses, claims, damages, liabilities andamounts paid in defense or settlement or otherwise in connection with anyclaim, action, suit, proceeding or investigation, whether civil, criminal,administrative or investigative, arising out of or pertaining to any facts orevents existing or occurring at or prior to the Closing Date for a period ofsix years after the Closing Date; provided that if any claim or claimsare asserted or made within such six-year period, all rights to indemnificationin respect of any such claim or claims shall continue until disposition of anyand all such claims. Parent shall, or shall cause the Surviving Corporation to,advance expenses to an Indemnified Party, as incurred, to the fullest extentpermitted under applicable Law; provided that the Indemnified Party towhom expenses are advanced provides an undertaking to repay such advances if itis determined by a court of competent jurisdiction in a final non-appealableorder or decree that such Indemnified Party is not entitled to indemnification.In the event of any such claim, action, suit, proceeding or investigation(whether arising before or after the Closing Date), (i) the IndemnifiedParties shall promptly notify Parent and the Surviving Corporation thereof, (ii) anycounsel retained by the Indemnified Parties for any period after the ClosingDate shall be subject to the consent of Parent and the Surviving Corporation(which consent shall not be unreasonably withheld), (iii) none ofParent and the Surviving Corporation shall be obligated to pay for more thanone firm of counsel for

 

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### all IndemnifiedParties, except to the extent that (x) an Indemnified Party hasbeen advised by counsel that there are conflicting interests between it and anyother Indemnified Party or (y) local counsel, in addition to suchother counsel, is required to effectively defend against such action or proceedings,and (iv) none of Parent and the Surviving Corporation shall beliable for any settlement effected without its written consent (which consentshall not be unreasonably withheld). None of Parent and the SurvivingCorporation shall have any obligation hereunder to any Indemnified Party whenand if it shall be determined by a court of competent jurisdiction in a finalnon-appealable order or decree that the indemnification of such IndemnifiedParty in the manner contemplated hereby is prohibited by applicable Law.

###  

### (b)           Parent shall, or shallcause the Surviving Corporation to, at or prior to the Effective Time, obtain “tail”or “runoff” insurance policies with a claims period of at least six years fromthe Effective Time with respect to directors’ and officers’ liabilityinsurance, in an amount and scope at least as favorable as the Company’sexisting policies from an insurance carrier with the same or better creditrating as the Company’s current insurance carrier.

###  

### (c)           If Parent or theSurviving Corporation or any of their successors or assigns (i) shallmerge or consolidate with or merge into any other corporation or entity andshall not be the surviving or continuing corporation or entity of suchconsolidation or merger or (ii) shall transfer all or substantiallyall of their respective properties and assets to any individual, corporation orother entity, then in each such case, proper provisions shall be made so thatthe successors or assigns of Parent or the Surviving Corporation shall assumeall of the obligations set forth in this Section 4.8.

###  

4.9           Financing.

 

### (a)           Parent shall use itsreasonable best efforts to arrange the Debt Financing on the terms andconditions described in the Debt Commitment Letters, including using reasonablebest efforts to (i) negotiate definitive agreements with respectthereto on the terms and conditions contained in the Debt Commitment Letters, (ii) satisfyon a timely basis all conditions applicable to Parent, MergerCo or any of itsAffiliates in such definitive agreements that are within their or suchAffiliates’ control and (iii) consummate the Financing contemplated bythe Debt Commitment Letters at Closing. Parent shall obtain the Financingcontemplated by the Equity Commitment Letter upon satisfaction or waiver of theconditions to the Closing (other than those conditions that by their naturecannot be satisfied until the Closing) set forth in Sections 5.1 and 5.2 andthe consummation of the Debt Financing. In the event any portion of the DebtFinancing becomes unavailable on the terms and conditions contemplated in theDebt Commitment Letters, Parent shall use its reasonable best efforts toarrange to obtain alternative financing on terms not materially more adverse tothe Company than those set forth in the Debt Commitment Letters (“AlternativeFinancing”), including from alternative sources, as promptly as practicablefollowing the occurrence of such event. In the event that

 

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### (x) Parentis seeking to obtain High Yield Financing and (y) any suchfinancing has not been obtained by the final day of the Marketing Period,Parent shall use the proceeds of the Bridge Financing to replace any suchaffected portion of the High Yield Financing. Parent shall give the Company promptnotice of any breach by any party of the Debt Commitment Letters or anytermination of the Debt Commitment Letters. Parent shall keep the Companyinformed on a reasonably current basis in reasonable detail of the status ofits efforts to arrange the Financing and shall not permit any amendment ormodification to be made to, or any waiver of any provision of or remedy under,the Debt Commitment Letters without the prior written consent of the Company. Parentshall not permit any amendment or modification to be made to, or any waiver ofany provision of or remedy under, the Equity Commitment Letter.

###  

### (b)           The Company shallprovide, and shall cause its Subsidiaries to provide, and shall use itsreasonable best efforts to cause their respective accountants, legal counsel,agents, advisors, Affiliates and other representatives to provide, allcooperation in connection with the arrangement of the Debt Financing and therepayment, redemption and/or discharge of all Indebtedness included in theClosing Debt Repayment Amount as may be reasonably requested by Parent (providedthat such requested cooperation does not unreasonably interfere with theongoing business of the Company or its Subsidiaries or any of their Affiliates,cause the breach of any agreement to which the Company or its Subsidiaries orany of their Affiliates is a party or involve any binding commitment thatimposes obligations prior to the Closing by the Company or its Subsidiaries orany of their Affiliates), including providing the Debt Financing Information toParent and its financing sources as promptly as reasonably practicable afterthe date hereof. In no event shall the Company or its Subsidiaries be requiredto pay any commitment or similar fee that is not reimbursed by Parent or incurany liability that is not contingent upon the Closing in connection with theDebt Financing prior to the Closing, and no pre-Closing director shall berequired to take any action with respect to the foregoing and neither theCompany nor any of its Subsidiaries shall be obligated to take any action thatrequires action or approval by the pre-Closing directors. Parent shall,promptly upon request by the Company, reimburse the Company and itsSubsidiaries for all reasonable out-of-pocket costs incurred by the Company orits Subsidiaries or any of their Affiliates in connection with such cooperation.Parent shall indemnify and hold harmless the Company and its Subsidiaries, andtheir respective Affiliates and each of their representatives from and againstany and all liabilities, losses, damages, claims, costs, expenses, interest,awards, judgments and penalties suffered or incurred by them in connection withthe arrangement of the Debt Financing and any information utilized inconnection therewith (other than information provided by the Company or itsSubsidiaries).

###  

4.10         Resignations. TheCompany shall use reasonable best efforts to obtain the written resignations ofeach director of the Company and its Subsidiaries that is reasonably requestedby Parent, effective as of the Effective Time.

 

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4.11         Exclusive Dealing. During theperiod from the date of this Agreement through the Closing or the earliertermination of this Agreement pursuant to Section 7.1, none of the Company orany of its Subsidiaries shall take or permit any other Person on its behalf totake, directly or indirectly, any action to encourage, initiate or engage indiscussions or negotiations with, or provide any information to, any Person(other than Parent and its representatives) concerning any purchase of all orsubstantially all of the shares of Company Stock, any merger involving theCompany and/or any of its Subsidiaries, any sale of all or substantially all ofthe assets of the Company or any of its Subsidiaries, or any similartransaction involving the Company and its Subsidiaries.

 

4.12         Financial Statements and OtherInformation. From the date hereof, to and including the Closing Date, theCompany shall deliver monthly financial statements and operating reports toParent, in the same form and at the same times that such information andreports have been prepared for the holders of Company Stock and/or theirrepresentatives prior to the date of this Agreement.

 

4.13         Affidavit. At the Closing, the Companyshall deliver to Parent an affidavit, made under penalties of perjury, datednot more than 30 days prior to the Closing Date, stating that shares of CompanyStock, Company Options, RSUs and DSUs do not constitute U.S. real propertyinterests within the meaning of Section 897(c) of the Code. Such affidavitshall meet the requirements of Treasury Regulation Section 1.897-2(h).

 

# ARTICLEVCONDITIONS TO CLOSING

#  

5.1           Conditions to the Obligations ofthe Company, Parent and MergerCo. The obligations of the Company, Parentand MergerCo to effect the Merger shall be subject to the fulfillment or waiverby Parent, MergerCo and the Company, on or prior to the Closing Date, of eachof the following conditions:

 

#### (a)           (i) Anyapplicable waiting period under the HSR Act relating to the Merger, includingany extension thereof, shall have been terminated or expired, (ii) theEuropean Commission shall have taken a decision under Article 6(1)(b) ofthe EC Merger Regulation declaring the Merger compatible with the common market(or shall have been deemed to declare the Merger compatible with the commonmarket pursuant to Article 10(6) of the EC Merger Regulation) and (iii) theother consents and approvals from Governmental Entities with respect to thetransactions contemplated by this Agreement set forth on Schedule 5.1(a)(iii)of the Disclosure Letter shall have been obtained.

 

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#### (b)           There shall not be ineffect any injunction or other order issued by a court of competent jurisdictionrestraining or prohibiting the consummation of the transactions contemplated bythis Agreement.

####  

5.2           Conditions to the Obligation ofParent and MergerCo. The obligation of Parent and MergerCo to effect theMerger shall be subject to the fulfillment or waiver by Parent on or prior tothe Closing Date of each of the following conditions:

 

#### (a)           The representations andwarranties of the Company contained in Article II shall be true andcorrect in all respects, if qualified by materiality or Material AdverseEffect, and shall be true and correct in all material respects, if notqualified by materiality or Material Adverse Effect, when made and at and as ofthe Closing with the same effect as though made at and as of the Closing,except that those representations and warranties that are made as of a specificdate shall be true and correct only as of such date. The Company shall haveduly performed and complied in all material respects with all agreementscontained herein required to be performed or complied with by it at or beforethe Closing.

 

#### (b)           The Company shall havedelivered to Parent a certificate, dated the Closing Date and signed by asenior executive officer of the Company, as to the fulfillment of theconditions set forth in Section 5.2(a).

####  

#### (c)            Since the date ofthis Agreement, no event, change or effect shall have occurred which,individually or in the aggregate, has resulted in or would reasonably beexpected to result in a Material Adverse Effect.

####  

5.3           Conditions to the Obligation ofthe Company. The obligation of the Company to effect the Merger shall besubject to the fulfillment or waiver by the Company on or prior to the ClosingDate of each of the following conditions:

 

#### (a)           The representations andwarranties of Parent and MergerCo contained in Article III shall be trueand correct in all respects, if qualified by materiality, and shall be true andcorrect in all material respects, if not qualified by materiality, when madeand as of the Closing Date, with the same effect as though made at and as ofthe Closing, except that those representations and warranties that are made asof a specific date shall be true and correct only as of such date.

####  

#### (b)           Parent shall be readyto provide to the Company the funds required to effect, or to permit theSurviving Corporation to effect, the payments contemplated bySection 1.3(c), and the payments and other actions contemplated by Section1.3(c)(i) shall be ready to be made or performed. Parent and MergerCo shallhave duly performed and complied in all material respects with

 

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#### all other agreements contained herein required to beperformed or complied with by them at or before the Closing.

####  

#### (c)           Parent shall havedelivered to the Company a certificate, dated the Closing Date and signed by asenior executive officer of Parent, as to the fulfillment of the conditions setforth in Sections 5.3(a) and 5.3(b).

####  

# ARTICLEVINO SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS

#  

6.1           No Survival of Representations,Warranties and Covenants. The representations, warranties and covenants ofthe Company, Parent and MergerCo contained in this Agreement, or in anycertificate delivered in connection with this Agreement (other than thecovenants contained in Article I, Sections 4.3(b), 4.6, 4.7 and 4.8and Article IX of this Agreement) shall not survive the Closing, and anyand all breaches of such representations and warranties and covenants shall bedeemed waived as of the Closing.

 

# ARTICLEVIITERMINATION

#  

7.1           Termination. This Agreementmay be terminated at any time prior to the Closing Date:

 

#### (a)           By the writtenagreement of Parent and the Company;

####  

#### (b)           By either the Company,on the one hand, or Parent (on behalf of itself and MergerCo), on the otherhand, by written notice to the other party after 5:00 p.m. New York City timeon November 30, 2007 (the “Termination Date”), if the Merger shall nothave been effected pursuant hereto, unless such date is extended by the mutualwritten consent of the Company and Parent, provided that suchtermination right shall not be available to (i) a party whose failure tofulfill or cause to be fulfilled any obligation under this Agreement has beenthe primary cause of the failure of the Merger to occur on or prior to suchdate (including any circumstance in which the Company would have the right toterminate this Agreement under Section 7.1(d)) or (ii) Parent (onbehalf of itself and MergerCo) under any circumstance in which the Companywould within six Business Days have the right to terminate this Agreement underSection 7.1(d);

 

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#### (c)           By either Parent (onbehalf of itself and MergerCo), on the one hand, or the Company, on the otherhand, by written notice to the other party (which, in the case of the Parent,shall include MergerCo) if:

####  

###### (i)            the other party has(and the terminating party shall not have) failed to perform and comply, in allmaterial respects, with all agreements, covenants and conditions herebyrequired to have been performed or complied with by such party prior to thetime of such termination, and such failure shall not have been cured within 30days following written notice of such failure; or

######  

###### (ii)           any event shall occurafter the date hereof that shall have made it impossible to satisfy a conditionprecedent to the terminating party’s obligations to perform its obligationshereunder, unless the occurrence of such event shall be due to the failure ofthe terminating party to perform or comply with any of the agreements,covenants or conditions hereof to be performed or complied with by such partyprior to the Closing; and

######  

#### (d)           By the Company, bywritten notice to Parent, if Parent or MergerCo has failed to obtain theproceeds of the Financing necessary to pay the amounts to be paid by MergerCopursuant to Section 1.3(c) and consummate the Merger and the other transactionscontemplated hereby in accordance with the terms of this Agreement within fiveBusiness Days after the first date after the end of the Marketing Period uponwhich all conditions set forth in Sections 5.1 and 5.2 have been satisfied(or are capable of satisfaction by action taken at the Closing) or waived.

####  

7.2           Effect of Termination. In theevent of the termination of this Agreement pursuant to the provisions ofSection 7.1, this Agreement shall become void and have no effect, without anyliability to any Person in respect hereof or of the transactions contemplatedhereby on the part of any party hereto, or any of its directors, officers,representatives, stockholders or Affiliates, except as provided in Section 4.5,this Section 7.2, Article IX, the Confidentiality Agreement and the Guarantee; providedthat nothing in this Section 7.2 shall be deemed to release the Company fromany liability for losses or damages resulting from the willful breach by theCompany of the terms and provisions of this Agreement; providedfurtherthat if this Agreement is terminated by the Company pursuant to Section 7.1(d),then Parent shall pay to the Company an aggregate amount equal to $100 million(the “Termination Fee”) as promptly as practicable (and, in any event,within two Business Days following such termination) by wire transfer ofimmediately available funds. The parties acknowledge and agree that nothing inthis Section 7.2 shall be deemed to affect their right to specific performanceunder Section 9.15. Subject to the preceding sentence, in no event shallParent, MergerCo or the Guarantors be liable for any monetary damages withrespect to this Agreement other than

 

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the payment of the Termination Fee pursuant to thisSection 7.2 and Parent’s payment obligations under the third and fourthsentences of Section 4.9(b). Each of the parties hereto acknowledges that theagreements contained in this Section 7.2 are an integral part of thetransactions contemplated by this Agreement, without which agreements theparties would not enter into this Agreement and that none of the feescontemplated is a penalty. If the transactions contemplated by this Agreementare terminated as provided herein, all documents, confidential information andother materials received by Parent with respect to the Company and itsAffiliates shall be treated in accordance with the Confidentiality Agreement,which shall remain in full force and effect notwithstanding the termination ofthis Agreement.

 

# ARTICLEVIIIDEFINITIONS AND INTERPRETATION

#  

8.1           Definition of Certain Terms;Interpretation. The terms defined in this Article VIII, whenever usedin this Agreement (including in the Schedules of the Disclosure Letter), shallhave the respective meanings indicated below for all purposes of this Agreement(each such meaning to be equally applicable to the singular and the pluralforms of the respective terms so defined). All references herein to a Section,Article, Exhibit or Schedule are to a Section, Article, Exhibit or Schedule ofor to this Agreement, unless otherwise indicated and the words “hereof” and “hereunder”will be deemed to refer to this Agreement as a whole and not to any particularprovision. The words “includes” and “including” will be deemed to be followedby the words “without limitation” whenever used. Whenever the context mayrequire, any pronoun shall include the corresponding masculine, feminine andneuter forms. The parties have participated jointly in the negotiation anddrafting of this Agreement. In the event an ambiguity or question of intent orinterpretation arises, this Agreement shall be construed as if drafted jointlyby the parties and no presumption or burden of proof shall arise favoring ordisfavoring any party by virtue of the authorship of any provisions of thisAgreement.

 

“Affiliate” means with respectto any Person, a Person that directly or indirectly through one or moreintermediaries, controls, is controlled by, or is under common control withsuch Person. “Control” (including the terms “controlled by” and “undercommon control with”) means the possession, directly or indirectly, of thepower to direct or cause the direction of the management policies of a Person,whether through the ownership of voting securities, by contract, as trustee orexecutor, or otherwise.

 

“Agreement” means thisAgreement and Plan of Merger, including the Exhibits and Schedules hereto.

 

“Alternative Financing” hasthe meaning set forth in Section 4.9(a).

 

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“Antitrust Division” has themeaning set forth in Section 4.2(b).

 

“Banc of America” meansBanc of America Securities LLC.

 

“Bridge Financing” has themeaning set forth in Section 3.5.

 

“Business Day” meanseach Monday, Tuesday, Wednesday, Thursday and Friday that is not a day on whichbanking institutions in New York, New York are authorized or obligated by Lawor executive order to close.

 

“CDRV Acquisition” meansCDRV Acquisition Corporation.

 

“CDRV Holdings” meansCDRVHoldings, Inc.

 

“CDRV Investment” meansCDRVInvestment Holdings Corporation.

 

“Certificate” means acertificate representing shares of Company Stock.

 

“Certificate of Merger” hasthe meaning set forth in Section 1.3(b).

 

“Closing” has the meaning setforth in Section 1.3(a).

 

“Closing Date” has the meaningset forth in Section 1.3(a).

 

“Closing Debt Repayment Amount”means all outstanding principal, interest and all other amounts due and payableat the Effective Time (including all accrued and unpaid interest and anyprepayment fees or penalties) under, and to satisfy and discharge theobligations of the Company, CDRV Investment, CDRV Holdings, VWR and any otherapplicable Subsidiary of the Company in respect of, the Credit Agreement, theSenior Floating Rate Notes, the Senior Discount Notes, the Senior Notes, theSenior Subordinated Notes and the other Indebtedness identified in Schedule8.1(a) of the Disclosure Letter.

 

“Code” means the InternalRevenue Code of 1986, as amended.

 

“Company” has the meaning setforth in the preamble.

 

“Company Benefit Plan” has themeaning set forth in Section 2.10(a).

 

“Company Employment Agreements”has the meaning set forth in Section 2.10(a).

 

“Company Options” means alloutstanding options to purchase Company Stock under the Stock Plan.

 

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“Company Stock” means thecommon stock of the Company, par value $0.01 per share.

 

“Confidentiality Agreement”has the meaning set forth in Section 4.3(a).

 

“Consent” means any consent,approval, authorization, order, filing, registration or qualification of orwith any Person.

 

“Contract” means anyagreement, contract, commitment, instrument, undertaking or arrangement.

 

“Credit Agreement” means theCredit Agreement, dated as of April 7, 2004, as amended, restated orsupplemented from time to time, among Deutsche Bank AG New York Branch, asadministrative agent, Citicorp North America, Inc., as syndication agent, Bankof America, N.A., BNP Paribas, and Barclays Bank Plc, as documentation agents,the lenders from time to time party thereto, VWR (as successor in interest toCDRV Acquisition), as borrower, any other borrowers party thereto from time totime and the other credit parties signatory thereto.

 

“Customer Contracts” has themeaning set forth in Section 2.14(h).

 

“Debt Commitment Letters” hasthe meaning set forth in Section 3.5.

 

“Debt Financing” has themeaning set forth in Section 3.5.

 

“Debt Financing Information”means financial and other pertinent information regarding the Company as may bereasonably requested by Parent, including all financial statements andfinancial data of the type required by Regulation S-X and Regulation S-K underthe Securities Act and of the type and form customarily included in privateplacements under Rule 144A of the Securities Act, to consummate the offeringsof securities contemplated by the Debt Commitment Letters at the time duringthe fiscal year of the Company that such offering will be made.

 

“Debt Financing Sources” has the meaning set forth in Section****3.5.

 

“Delaware Secretary of State”has the meaning set forth in Section 1.3(b).

 

“Designated Intercompany Loans”has the meaning set forth in Section 2.4(d).

 

“DGCL” has the meaning setforth in Section 1.1.

 

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“Disclosure Letter” has themeaning set forth in the first paragraph of Article II.

 

“Disposition Agreement” meansthe Agreement regarding Future Disposition of VWR Shares and Business, datedFebruary 15, 2004, between Merck KGaA and Clayton, Dubilier & Rice Fund VILimited Partnership.

 

“Dissenting Shares” has themeaning set forth in Section 1.8(a).

 

“Dissenting Stockholder” hasthe meaning set forth in Section 1.8(a).

 

“DSUs” has the meaning setforth in Section 1.5(b).

 

“EC Merger Regulation” meansCouncil Regulation (EC) No. 139/2004 of 20 January 2004.

 

“Effective Time” has themeaning set forth in Section 1.3(b).

 

“Employee” has the meaning setforth in Section 4.6.

 

“Employment and Withholding Taxes”means any federal, state, provincial, local, foreign or other employment,unemployment insurance, social security, disability, workers’ compensation,payroll, health care or other similar tax, duty or other governmental charge orassessment or deficiencies thereof and all Taxes required to be withheld by oron behalf of each of the Company and each of its Subsidiaries in connectionwith amounts paid or owing to any employee, independent contractor, stockholder,creditor or other party, in each case, on or in respect of the business orassets thereof.

 

“Environmental Law” means anyfederal, state, or local Law relating to (i) the manufacture,transport, use, treatment, storage, disposal, release or threatened release of,or exposure to, Hazardous Substances, or (ii) the protection ofhuman health or the environment (including, without limitation, naturalresources, air, and surface or subsurface land or waters).

 

“Equity Commitment Letter” hasthe meaning set forth in Section 3.5.

 

“Equity Consideration” means (i)$2.196 billion, *minus* (ii) the amount tobe paid pursuant to Section 1.3(c)(ii) in respect of the Transaction Expenses, *plus* (iii) if the Closing occurs after July 31, 2007,interest on the amount set forth in the foregoing clause (i) at a rate of sixpercent, compounded annually based on a 360 day year, for each day after July31, 2007 through and including the Closing Date.

 

“Equity Funds” has the meaningset forth in Section 3.5.

 

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“ERISA” means the EmployeeRetirement Income Security Act of 1974, as amended.

 

“ERISA Affiliate” means anycorporation or trade or business (whether or not incorporated) which, togetherwith the Company or its Subsidiaries (or their successors), is or was, at therelevant time, treated as a single employer under Section 414 of the Code.

 

“Exchange Act” means theSecurities Exchange Act of 1934, as amended.

 

“Exercise Price” means withrespect to any Company Option, the amount required to be paid by the holderthereof to exercise such option.

 

“Financial Statements” has themeaning set forth in Section 2.4.

 

“Financing” has the meaningset forth in Section 3.5.

 

“FTC” has the meaning setforth in Section 4.2(b).

 

“Fully Diluted Number” meansthe sum of (i) number of shares of Company Stock outstanding at theClosing, (ii) the number of shares of Company Stock into which allCompany Options outstanding at the Closing are exercisable or convertible inaccordance with their terms and (iii) the number of RSUs and DSUsoutstanding at the Closing.

 

“GAAP” means United Statesgenerally accepted accounting principles.

 

“Goldman” means Goldman, Sachs& Co.

 

“Governmental Entity” meansany governmental or regulatory authority, agency, court, commission or otherentity, domestic or foreign.

 

“Guarantee” has the meaningset forth in Section 3.6.

 

“Guarantors” has the meaningset forth in Section 3.6.

 

“Hazardous Substance” meansany material or substance that is:  (i) listed,classified or regulated as “hazardous”, “toxic” or as a pollutant orcontaminant pursuant to any applicable Environmental Law, or (ii) anypetroleum product or by-product, asbestos, noise, odor, radiation orpolychlorinated biphenyls.

 

“High Yield Financing” has themeaning set forth in Section 3.5.

 

“HSR Act” means theHart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rulesand regulations promulgated thereunder.

 

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“Indebtedness” means withoutduplication, (i) any indebtedness for borrowed money and (ii) anyindebtedness evidenced by any note, bond, debenture or other debt security, inthe case of the foregoing clauses (i) and (ii), whether incurred, assumed,secured or unsecured. Indebtedness shall not include capital leases orIntercompany Indebtedness.

 

“Indemnified Parties” has themeaning set forth in Section 4.8(a).

 

“Intellectual Property” hasthe meaning set forth in Section 2.13(a).

 

“Intercompany Indebtedness”means all outstanding Indebtedness (ignoring, for this purpose only, theexclusion of Intercompany Indebtedness from the definition of Indebtedness inthis Agreement) owed by the Company or one of its Subsidiaries to the Companyor any of its other Subsidiaries.

 

“IRS” means the InternalRevenue Service.

 

“Knowledge of the Company”means the actual knowledge of the persons specified in Schedule 8.1(b) of theDisclosure Letter, obtained in the normal course of their respective duties asofficers of the Company or any of its Subsidiaries.

 

“Law” means any law, statute,ordinance, rule, regulation, judgment, injunction, order or decree of anyGovernmental Entity.

 

“Leased Real Property” has themeaning set forth in Section 2.12(a).

 

“Leases” has the meaning setforth in Section 2.12(c).

 

“Letter of Transmittal” hasthe meaning set forth in Section 1.9(a).

 

“Licenses” has the meaning setforth in Section 2.13(b).

 

“Lien” means any mortgage,pledge, deed of trust, hypothecation, claim, security interest, title defect,encumbrance, burden, charge or other similar restriction, lease, sublease,claim, title retention agreement, option, easement, covenant, encroachment orother adverse claim.

 

“Listed Contracts” has themeaning set forth in Section 2.14.

 

“Marketing Period” means thefirst period of 30 consecutive calendar days after the date hereof throughoutwhich (i) Parent shall have the Debt Financing Information from theCompany and (ii) the conditions set forth in Section 5.1 shall besatisfied and nothing has occurred and no condition exists that would cause anyof the conditions set forth in Section 5.2(a) or 5.2(c) to fail to be

 

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satisfiedassuming the Closing were to be scheduled for any time during such 30consecutive calendar day period.

 

“Material Adverse Effect”means any event, change or effect that is materially adverse to the business,properties, assets, financial condition or results of operations of the Companyand its Subsidiaries taken as a whole; provided, however, that tothe extent any event, change or effect is caused by or results from any of thefollowing, it shall not be taken into account in determining whether there hasbeen or will be a “Material Adverse Effect”: (i) any announcement relating to the sale of the Company(including losses or threatened losses of the relationships of the Company orany of its Subsidiaries with customers, distributors or suppliers), actionscontemplated by this Agreement or the performance of obligations hereunder, (ii)the identity of Parent or any of its Affiliates as the acquiror of the Company,(iii) changes affecting the United States or European economy orfinancial or securities markets as a whole or changes that are the result offactors generally affecting the industries in which the Company and itsSubsidiaries conduct their business, (iv) any change in any applicableLaws or accounting standards or principles or interpretation thereof after thedate hereof, (v) the availability or cost of financing to Parent orMergerCo and (vi) the commencement, occurrence or continuation of anywar, armed hostilities or acts of terrorism involving or affecting the UnitedStates of America or any part thereof, except, in the case of the foregoingclause (iii) only, to the extent such changes do not materiallydisproportionately impact the Company and its Subsidiaries, taken as a whole,relative to other companies in the industries in which the Company and itsSubsidiaries conduct their business.

 

“Merck Competitor” has themeaning given in the Disposition Agreement.

 

“Merger” has the meaning setforth in paragraph A of the preamble.

 

“MergerCo” has the meaning setforth in the preamble.

 

“MergerCo Common Stock” meansthe common stock, par value $0.01 per share, of MergerCo.

 

“Non-U.S. Antitrust Laws”means merger control, antitrust, competition or other similar Laws ofjurisdictions other than the United States.

 

“Option Cancellation Payment”has the meaning set forth in Section 1.5(a).

 

“Owned Intellectual Property”has the meaning set forth in Section 2.13(a).

 

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“Owned Real Property” has themeaning set forth in Section 2.12(a).

 

“Parent” has the meaning setforth in the preamble.

 

“Paying Agent” means a payingagent selected by the Company prior to the Effective Time.

 

“PerShare Merger Consideration” means in relation to each share of CompanyStock, an amount (rounded to the nearest $0.01) equal to (i) (x)the Equity Consideration, *plus* (y)the aggregate Exercise Price of all outstanding Company Options in respect ofwhich an Option Cancellation Payment is payable hereunder, *divided by* (ii) the FullyDiluted Number.

 

“Permits” has the meaning setforth in Section 2.9(b).

 

“Permitted Liens” means (i) Liensdisclosed in the Financial Statements, including the notes thereto; (ii) Liensfor taxes, assessments and similar charges that are not yet due or that arebeing contested in good faith; (iii) mechanic’s, materialmen’s,carrier’s, repairer’s and other similar Liens arising or incurred in theordinary course of business or that are not yet due and payable or that arebeing contested in good faith; (iv) easements, rights of way, titleimperfections and restrictions, zoning ordinances and other similarencumbrances affecting the real property; (v) statutory Liens infavor of lessors arising in connection with any property leased to the Companyor its Subsidiaries; (vi) Liens incurred in the ordinary course ofbusiness since December 31, 2006; and (vii) any other Liens thatwould not reasonably be expected to have, individually or in the aggregate, a (a) MaterialAdverse Effect or (b) material adverse effect on the ability of Parentor MergerCo to obtain the Debt Financing.

 

“Person” means any naturalperson, firm, partnership, association, corporation, company, trust, businesstrust, Governmental Entity or other entity.

 

“Plan” means each “employeebenefit plan”, as such term is defined in section 3(3) of ERISA (whetheror not subject to ERISA), and each bonus, incentive or deferred compensation,retirement, welfare, severance, termination, retention, change of control,stock option, stock appreciation, stock purchase, phantom stock or otherequity-based, performance or other material employee or retiree benefit orcompensation plan, program, arrangement, policy or understanding.

 

“Prohibited Merck Competitor”has the meaning given in the Disposition Agreement.

 

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“Registration and ParticipationAgreement” means the Registration and Participation Agreement, dated as ofApril 7, 2004, among the Company, Clayton, Dubilier & Rice Fund VILimited Partnership, Banc of America Capital Investors, L.P., SSB CapitalPartners (Master Fund) L.L.P., CGI Private Equity L.P., LLC and the otherstockholders of the Company who may become parties thereto from time to time inaccordance with the terms thereof.

 

“RequisiteConsent of Stockholders” means the written consent of holders of shares ofCompany Stock representing a majority of the voting power of the outstandingshares of Company Stock.

 

“RSUs” has the meaning setforth in Section 1.5(b).

 

“Sarbanes-Oxley Act” means theSarbanes-Oxley Act of 2002, as amended.

 

“SEC” means the Securities andExchange Commission.

 

“SEC Filings” has the meaningset forth in Section 2.4.

 

“Securities Act” means theSecurities Act of 1933, as amended.

 

“Senior Discount Notes” meansthe 95/8% seniordiscount notes, dated as of December 16, 2004, in aggregate principalamount at maturity not exceeding $481 million (after giving effect to anyissuance of exchange notes), issued by CDRV Investment pursuant to anindenture, dated as of December 16, 2004, as amended, restated orsupplemented from time to time, among CDRV Investment, the guarantors from timeto time parties thereto and Wells Fargo Bank, National Association, as trustee.

 

“Senior Floating Rate Notes”means the senior floating rate notes, dated as of December 14, 2006, inthe aggregate principal amount of $350 million, issued by the Companypursuant to an indenture, dated as of December 14, 2006, as amended,restated or supplemented from time to time, between the Company, as issuer, andWells Fargo Bank, National Association, as trustee.

 

“Senior Notes” means the 67/8%senior notes, dated as of April 7, 2004, in aggregate principal amount notexceeding $200 million (after giving effect to any exchange notes), issuedby VWR (as successor in interest to CDRV Acquisition) pursuant to theindenture, dated as of April 7, 2004, as amended, restated or supplementedfrom time to time, among CDRV Acquisition, the guarantors from time to timeparties thereto and Wells Fargo Bank, National Association, as trustee.

 

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“Senior Secured Financing” hasthe meaning set forth in Section 3.5.

 

“Senior Subordinated Notes”means the 8% senior subordinated notes, dated as of April 7, 2004, inaggregate principal amount not exceeding $320 million (after giving effectto any issuance of exchange notes), issued by VWR (as successor in interest toCDRV Acquisition) pursuant to the indenture, dated as of April 7, 2004, asamended, restated or supplemented from time to time, among CDRV Acquisition,the guarantors from time to time parties thereto, and Wells Fargo Bank,National Association, as trustee.

 

“Stock Plan” means the CDRVInvestors, Inc. Stock Incentive Plan as in the effect on the date hereof.

 

“Stock Subscription Agreements”means the (i) Stock Subscription Agreement, dated April 7, 2004,between the Company and Clayton, Dubilier & Rice Fund VI LimitedPartnership, (ii) Stock Subscription Agreement, dated April 7,2004, between the Company and Banc of America Capital Investors, L.P., (iii)Stock Subscription Agreement, dated April 7, 2004, between the Company andSSB Capital Partners (Master Fund) I, L.P. and (iv) Stock SubscriptionAgreement, dated April 7, 2004, between the Company and CGI Private EquityL.P., LLC.

 

“Subsidiary” means withrespect to any Person (for the purposes of this definition, the “parent”),any other Person (other than a natural person), whether incorporated orunincorporated, of which at least a majority of the securities or ownershipinterests having by their terms ordinary voting power to elect a majority ofthe board of directors or other persons performing similar functions is directlyor indirectly owned or controlled by the parent or by one or more of itsSubsidiaries.

 

“Supply Contracts” has themeaning set forth in Section 2.14(g).

 

“Surviving Corporation” hasthe meaning set forth in Section 1.1.

 

“Surviving Corporation Common Stock”has the meaning set forth in Section 1.4(d).

 

“Tax Return” means all returnsand reports required to be supplied to a taxing authority relating to Taxes.

 

“Taxes” means all U.S. ornon-U.S. federal, national, state or local taxes, assessments, levies or othergovernmental charges in the nature of taxes, including all income, franchise,withholding, unemployment insurance, social security, sales, use, excise, realand personal property, stamp, transfer, VAT and

 

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workers’compensation taxes, together with all interest, penalties and additions payablewith respect thereto.

 

“Termination Date” has themeaning set forth in Section 7.1(b).

 

“Termination Fee” has themeaning set forth in Section 7.2.

 

“Transaction Expenses” meansthe fees and expenses of Goldman, Banc of America and Debevoise & PlimptonLLP incurred by the Company in connection with the Merger.

 

“VWR” means VWR International,Inc.

 

8.2           Disclosure Letter. The partiesacknowledge and agree that any exception to a representation and warrantycontained in this Agreement that is disclosed in any of the Schedules in theDisclosure Letter under the caption referencing such representation andwarranty shall be deemed to also be an exception to each other representationand warranty contained in this Agreement to the extent that it is reasonablyapparent that such exception is applicable to such other representation andwarranty. Certain information set forth in the Schedules to the DisclosureLetter is included solely for informational purposes and may not be required tobe disclosed pursuant to this Agreement, and the disclosure of any informationshall not be deemed to constitute an acknowledgment that such information isrequired to be disclosed in connection with the representations and warrantiesmade by the Company or Parent and MergerCo, as the case may be, in thisAgreement or that it is material, nor shall such information be deemed toestablish a standard of materiality. The Schedules in the Disclosure Letter arequalified in their entirety by reference to specific provisions of thisAgreement and are not intended to constitute, and shall not be construed asconstituting, representations or warranties of the Company or its Subsidiaries,except to the extent expressly provided in this Agreement.

 

# ARTICLEIXGENERAL PROVISIONS

#  

9.1           Expenses. Except as set forthin Section 4.7 and as otherwise specifically provided for in this Agreement,the Company, on the one hand, and Parent and MergerCo, on the other hand, shallbear their respective expenses, costs and fees (including attorneys’, auditors’and financing fees, if any) in connection with the transactions contemplatedhereby, including the preparation, execution and delivery of this Agreement andcompliance herewith, whether or not the Merger is effected; providedthat Parent shall be responsible for all filing fees in connection with (i) thefilings required by the HSR Act and any Non-U.S. Antitrust Laws, (ii) anyother filings with

 

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Governmental Entities required to effect the Mergerand (iii) any other authorizations, consents, approvals, filings ornotifications required to effect the Merger.

 

9.2           Further Actions. Subject tothe terms and conditions of this Agreement, each party shall execute anddeliver such certificates and other documents and take such actions as mayreasonably be requested by the other party in order to effect the transactionscontemplated by this Agreement.

 

9.3           Certain Limitations. It is theexplicit intent and understanding of each of the parties that no party nor anyof its Affiliates, representatives or agents is making any representation orwarranty whatsoever, oral or written, express or implied, other than those setforth in Articles II and III and no party is relying on any statement,representation or warranty, oral or written, express or implied, made byanother party or such other party’s Affiliates, representatives or agents,except for the representations and warranties set forth in such Articles. Theparties agree that this is an arm’s-length transaction in which the parties’undertakings and obligations are limited to the performance of theirundertakings and obligations under this Agreement.

 

9.4           Notices. All notices,requests, demands, waivers and other communications required or permitted to begiven under this Agreement shall be in writing and shall be deemed to have beenduly given if (i) delivered personally, (ii) mailed,certified or registered mail with postage prepaid, (iii) sent bynext-day or overnight mail or delivery or (iv) sent by fax ortelegram, as follows:

 

#### (a)           if to the Company,

####  

CDRV Investors, Inc.1310 Goshen ParkwayPO Box 2656West Chester, Pennsylvania, 19380Fax:  (610) 701-9896Telephone:  (610) 719-7072Attention:  George Van Kula, Esq.

 

with a copy to:

 

Clayton, Dubilier &Rice Fund VI Limited Partnership1403 Foulk Road, Suite 106Wilmington, Delaware, 19803Fax:  (212) 407-5200Telephone:  (212) 407-5252Attention:  Rick Schnall

 

and

 

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Clayton, Dubilier &Rice, Inc.375 Park Avenue, 18th FloorNew York, New York 10152Fax:  (212) 407-5200Telephone:  (212) 407-5252Attention:  Rick Schnall

 

and

 

Debevoise & PlimptonLLP919 Third AvenueNew York, New York  10022Fax:  (212) 909-6836Telephone:  (212) 909-6000Attention:  Franci J. Blassberg, Esq.

 

#### (b)           if to Parent orMergerCo,

####  

VarietalDistribution Holdings, LLCc/o Madison Dearborn Partners, LLCThree First National Plaza, 38th FloorChicago, Illinois 60602Fax:  (312) 895-1056Telephone:  (312) 895-1000Attention: General Counsel

 

with a copy to:

 

Kirkland& Ellis LLP 200 East Randolph DriveChicago, Illinois 60601Fax:  (312) 861-2200Telephone:  (312) 861-2000Attention:  Sanford E. Perl, P.C.

 

or, in each case, at such other address as may bespecified in writing to the other parties hereto.

 

All such notices, requests, demands, waivers and othercommunications shall be deemed to have been received (i) if bypersonal delivery, on the day after such delivery, (ii) if bycertified or registered mail, on the seventh Business Day after the mailingthereof, (iii) if by next-day or overnight mail or delivery, on theday delivered or (iv) if by fax or telegram, on the next dayfollowing the day on which such fax or telegram was sent, provided thata copy is also sent by certified or registered mail.

 

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9.5           Binding Effect. This Agreementshall be binding upon and inure to the benefit of the parties hereto and theirrespective heirs, successors and permitted assigns.

 

9.6           Assignment; Successors. ThisAgreement shall not be assignable by any party hereto without the prior writtenconsent of all of the other parties and any attempt to assign this Agreementwithout such consent shall be void and of no effect; provided that each ofParent and MergerCo may assign all or any of its rights and obligationshereunder (i) to any Affiliate of Parent organized under the laws of anystate of the United States, which Affiliate is controlled by the Equity Fundsor a Person controlling the Equity Funds and (ii) to any lender inconnection with the financing required to consummate the transactionscontemplated by this Agreement, provided, however, that no such assignmentshall relieve the assigning party of its obligations hereunder. Nothing in thisAgreement, expressed or implied, is intended or shall be construed to conferupon any Person other than the parties, any Affiliate of the Company, and thesuccessors and assigns permitted by this Section 9.6 any right, remedy orclaim under or by reason of this Agreement, other than, following the EffectiveTime, (a) the rights of the former holders of Company Stock underSection 4.3(b) and the rights of former directors and officers of theCompany and its Subsidiaries under Section 4.8, and (b) theright of (x) any former holder of Company Stock, RSUs or DSUs toreceive the aggregate Per Share Merger Consideration, or (y) anyholder of Company Options to receive the applicable Option CancellationPayment, in each case in accordance with the terms of this Agreement.

 

9.7           Amendment; Waivers, etc. Noamendment, modification or discharge of this Agreement, and no waiverhereunder, shall be valid or binding unless set forth in writing and dulyexecuted by the party against whom enforcement of the amendment, modification,discharge or waiver is sought. Any such waiver shall constitute a waiver onlywith respect to the specific matter described in such writing and shall in noway impair the rights of the party granting such waiver in any other respect orat any other time. The waiver by any of the parties hereto of a breach of or adefault under any of the provisions of this Agreement or a failure to or delayin exercising any right or privilege hereunder, shall not be construed as awaiver of any other breach or default of a similar nature, or as a waiver ofany of such provisions, rights or privileges hereunder. The rights and remediesherein provided are cumulative and none is exclusive of any other, or of anyrights or remedies that any party may otherwise have at law or in equity.

 

9.8           Entire Agreement. ThisAgreement (including the Exhibits and Schedules referred to herein or deliveredhereunder), the Confidentiality Agreement, the Equity Commitment Letter and theGuarantee constitute the entire agreement and supersede all prior agreementsand understandings, both written and oral, between the parties with respect tothe subject matter hereof.

 

9.9           Severability. If anyprovision, including any phrase, sentence, clause, section or subsection, ofthis Agreement is invalid, inoperative or unenforceable for any

 

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reason, such circumstances shall not have the effectof rendering such provisions in question invalid, inoperative or unenforceablein any other case or circumstance, or of rendering any other provision hereincontained invalid, inoperative, or unenforceable to any extent whatsoever.

 

9.10         Headings. The headings containedin this Agreement are for purposes of convenience only and shall not affect themeaning or interpretation of this Agreement.

 

9.11         Counterparts. This Agreement maybe executed in several counterparts, each of which shall be deemed an originaland all of which shall together constitute one and the same instrument.

 

9.12         Governing Law. EXCEPT TO THEEXTENT THAT THE LAWS OF THE STATE OF DELAWARE MANDATORILY APPLY, THIS AGREEMENTSHALL BE CONSTRUED, PERFORMED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THESTATE OF NEW YORK, WITHOUT GIVING EFFECT TO ITS PRINCIPLES OR RULES OF CONFLICTOF LAWS TO THE EXTENT SUCH PRINCIPLES OR RULES WOULD REQUIRE OR PERMIT THEAPPLICATION OF THE LAWS OF ANOTHER JURISDICTION.

 

9.13         Consent to Jurisdiction, etc.

 

### (a)           Each of the parties heretohereby irrevocably and unconditionally submits, for itself and its property, tothe exclusive jurisdiction of any court of New York State sitting in the Countyof New York or any Federal court of the United States of America sitting in NewYork City, and any appellate court from any thereof, in any action orproceeding arising out of or relating to this Agreement or the transactionscontemplated hereby or for recognition or enforcement of any judgment relatingthereto, and each of the parties hereto hereby irrevocably and unconditionallyagrees that all claims in respect of any such action or proceeding may be heardand determined in such New York State court or, to the extent permitted by Law,in such Federal court. Each of the parties hereto agrees that a final judgmentin any such action or proceeding shall be conclusive and may be enforced inother jurisdictions by suit on the judgment or in any other manner provided byLaw.

###  

### (b)           Each of the partieshereto hereby irrevocably and unconditionally waives, to the fullest extent itmay legally and effectively do so, any objection which it may now or hereafterhave to the laying of venue of any suit, action or proceeding arising out of orrelating to this Agreement or the transactions contemplated hereby in any NewYork State or Federal court. Each of the parties hereto hereby irrevocablywaives, to the fullest extent permitted by Law, the defense of an inconvenientforum to the maintenance of such action or proceeding in any such court.

 

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### (c)           Each of the partieshereto hereby irrevocably and unconditionally consents to service of process inthe manner provided for notices in Section 9.4. Nothing in this Agreementwill affect the right of any party to this Agreement to serve process in anyother manner permitted by Law.

###  

9.14         Waiver of Punitive and Other Damagesand Jury Trial.

 

### (a)           THE PARTIES TO THISAGREEMENT EXPRESSLY WAIVE AND FOREGO ANY RIGHT TO RECOVER PUNITIVE, EXEMPLARY,LOST PROFITS, CONSEQUENTIAL OR SIMILAR DAMAGES IN ANY ARBITRATION, LAWSUIT,LITIGATION OR PROCEEDING ARISING OUT OF OR RESULTING FROM ANY CONTROVERSY ORCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONSCONTEMPLATED HEREBY.

###  

### (b)           EACH PARTY ACKNOWLEDGESAND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELYTO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE IT HEREBYIRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURYIN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATINGTO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

###  

### (c)           EACH PARTY CERTIFIESAND ACKNOWLEDGES THAT (i) NO REPRESENTATIVE, AGENT OR ATTORNEY OFANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTYWOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE EITHER OF THE FOREGOINGWAIVERS, (ii) IT UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OFSUCH WAIVERS, (iii) IT MAKES SUCH WAIVERS VOLUNTARILY, AND (iv) ITHAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THEMUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 9.14.

###  

9.15         Specific Performance. Theparties hereto agree that irreparable damage would occur in the event that anyprovision of this Agreement were not performed in accordance with the termshereof. Accordingly, prior to the termination of this Agreement pursuant toSection 7.1, the parties shall be entitled to an injunction or injunctions toprevent breaches of this Agreement or to enforce specifically the terms andprovisions of this Agreement and the Equity Commitment Letter and theGuarantee, in addition to any other remedy to which they are entitled at law orin equity. Notwithstanding the first sentence of this Section 9.15, however,the parties acknowledge that the Company shall be entitled to an injunction orinjunctions to prevent breaches of this Agreement by Parent or MergerCo or toenforce specifically the terms and provisions of this Agreement only to preventbreaches of or enforce compliance with those covenants of Parent or MergerCothat require Parent or MergerCo to (a) use its

 

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reasonable best effortsto obtain the Financing, including without limitation, the covenants set forthin Section 4.2 (Satisfaction of Closing Conditions; Filings) and Section 4.9(Financing) and (b) assuming all the conditions set forth in Section 5.1or 5.2 have been satisfied (or are capable of being satisfied by action takenat the Closing) or waived, pay the Equity Consideration as contemplated bySection 1.3(c) in order to consummate the transactions contemplated by thisAgreement if, in the case of this clause (b), the financing provided for in theDebt Commitment Letters (or, if Alternative Financing is being used, pursuantto the Alternative Financing) is available to be drawn down by Parent pursuantto the applicable arrangements or commitments but is not so drawn down solelyas a result of the Parent not doing so.

 

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IN WITNESS WHEREOF, the parties have duly executedthis Agreement as of the date first above written.

 

 

|   | VARIETAL DISTRIBUTION HOLDINGS,  LLC    |
|--------|-----------------------------------------|
|   |                                    |
|   |                                    |
|   | By                                      |   |   |
|   |                                    | Name: |
|   |                                    | Title: |
|   |                                    |
|   |                                    |
|   | VARIETAL DISTRIBUTION MERGER  SUB, INC. |
|   |                                    |
|   |                                    |
|   | By                                      |   |   |
|   |                                    | Name: |
|   |                                    | Title: |
|   |                                    |
|   |                                    |
|   | CDRV****INVESTORS, INC.                 |
|   |                                    |
|   |                                    |
|   | By                                      |   |   |
|   |                                    | Name: |
|   |                                    | Title: |

 

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Exhibit A

 

Form of Guarantee

 

A-1

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