Exhibit 10.1

                                                                  EXECUTION COPY


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                            STOCK PURCHASE AGREEMENT

                                 BY AND BETWEEN

                                PITNEY BOWES INC.

                                       AND

                               JCC MANAGEMENT LLC

                                   DATED AS OF

                                  May 16, 2006

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                                TABLE OF CONTENTS

                                                                            Page
                                                                            ----

ARTICLE I Definitions .........................................................2


ARTICLE II Sale, Purchase and Repurchase .....................................16

     SECTION 2.01. Agreement to Sell and to Purchase; Purchase Price .........16
     SECTION 2.02. Closing ...................................................17
     SECTION 2.03. Purchase Price Adjustment .................................18

ARTICLE III Representations and Warranties of the Seller .....................20

     SECTION 3.01. Organization and Standing .................................20
     SECTION 3.02. Ownership of Shares; Capitalization .......................21
     SECTION 3.03. Authorization; Enforceability .............................22
     SECTION 3.04. No Violation; Consents ....................................22
     SECTION 3.05. Financial Statements ......................................23
     SECTION 3.06. Material Adverse Change ...................................24
     SECTION 3.07. Assets ....................................................24
     SECTION 3.08. Intellectual Property .....................................25
     SECTION 3.09. Employee Benefit Plans ....................................26
     SECTION 3.10. Employees and Labor Relations .............................27
     SECTION 3.11. No Undisclosed Material Liabilities .......................27
     SECTION 3.12. Compliance with Laws ......................................28
     SECTION 3.13. Litigation ................................................28
     SECTION 3.14. Compliance with Constituent Documents .....................28
     SECTION 3.15. Environmental Matters .....................................28
     SECTION 3.16. Real Property .............................................28
     SECTION 3.17. Taxes .....................................................29
     SECTION 3.18. Financings ................................................29
     SECTION 3.19. Contracts .................................................30
     SECTION 3.20. Certain Business Practices ................................32
     SECTION 3.21. Insurance .................................................32
     SECTION 3.22. Licenses and Permits; Governmental Notices ................33
     SECTION 3.23. Affiliated Transactions ...................................33
     SECTION 3.24. Vote Required .............................................33
     SECTION 3.25. Representations and Warranties ............................33

ARTICLE IV Representations and Warranties of the Purchaser ...................34

     SECTION 4.01. Organization; Authorization; Enforceability ...............34
     SECTION 4.02. Purchaser as a Corporation and U.S. Citizen ...............35
     SECTION 4.03. Purchase for Investment ...................................35
     SECTION 4.04. No Violation; Consents ....................................35
     SECTION 4.05. Litigation ................................................36
     SECTION 4.06. Financing .................................................36
     SECTION 4.07. Antitrust .................................................36
     SECTION 4.08. Representations and Warranties ............................36


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                                TABLE OF CONTENTS

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ARTICLE V Covenants of the Seller ............................................36

     SECTION 5.01. Compliance with Conditions; Commercially
                          Reasonable Efforts .................................36
     SECTION 5.02. Access to Books and Records ...............................36
     SECTION 5.03. Consents and Approvals ....................................37
     SECTION 5.04. Intentionally Omitted .....................................37
     SECTION 5.05. No Solicitation of Other Offers ...........................37
     SECTION 5.06. Confidentiality; Information ..............................38
     SECTION 5.07. The Distribution Agreements ...............................39
     SECTION 5.08. Conduct of Business .......................................39
     SECTION 5.09. Monthly Management Reports; Delivery of
                          Financial Statements ...............................42
     SECTION 5.10. Scheduled Payments ........................................42
     SECTION 5.11. Taxes .....................................................42
     SECTION 5.12. Statute of Limitations ....................................44
     SECTION 5.13. Directors and Officers ....................................44
     SECTION 5.14. Closing Date Operations Expense Statement .................44
     SECTION 5.15. Assistance ................................................44

ARTICLE VI Covenants of the Purchaser ........................................45

     SECTION 6.01. Compliance with Conditions; Commercially
                          Reasonable Efforts .................................45
     SECTION 6.02. Consents and Approvals ....................................45
     SECTION 6.03. Confidentiality; Information ..............................46
     SECTION 6.04. Prohibition on Solicitation and Hiring ....................46
     SECTION 6.05. Financing Commitment Letter ...............................47

ARTICLE VII Conditions Precedent to Closing ..................................48

     SECTION 7.01. Conditions to the Seller's Obligations in
                          Respect of the Closing .............................48
     SECTION 7.02. Conditions to the Purchaser's Obligations in
                          Respect of the Closing .............................49

ARTICLE VIII Indemnification .................................................50

     SECTION 8.01. Indemnification by the Seller .............................50
     SECTION 8.02. Indemnification by Purchaser ..............................51
     SECTION 8.03. Claims Procedure ..........................................51
     SECTION 8.04. Third Party Claims ........................................52
     SECTION 8.05. Termination of Indemnification for Breaches
                          of Representations and Warranties ..................53
     SECTION 8.06. Limitations on Indemnity Obligations ......................53
     SECTION 8.07. Losses Net of Insurance, Etc ..............................53
     SECTION 8.08. Indirect Losses; Mitigation ...............................54
     SECTION 8.09. Other Limitations .........................................54
     SECTION 8.10. Sole Remedy/Waiver ........................................54


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                                TABLE OF CONTENTS

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ARTICLE IX        54

     SECTION 9.01. Tax Returns ...............................................54
     SECTION 9.02. Payment of Taxes ..........................................56
     SECTION 9.03. Audits and Contests .......................................56
     SECTION 9.04. Third Party Indemnities ...................................58
     SECTION 9.05. Cooperation ...............................................58
     SECTION 9.06. Retention of Records and Returns ..........................59
     SECTION 9.07. Indemnification for Taxes ................................599


ARTICLE X         60


Miscellaneous     60

     SECTION 10.01. Survival .................................................60
     SECTION 10.02. Notices ..................................................61
     SECTION 10.03. Termination ..............................................62
     SECTION 10.04. Governing Law ............................................64
     SECTION 10.05. Waiver Of Jury Trial .....................................64
     SECTION 10.06. Attorney Fees ............................................65
     SECTION 10.07. Entire Agreement .........................................65
     SECTION 10.08. Modifications and Amendments .............................65
     SECTION 10.09. Waivers and Extensions ...................................65
     SECTION 10.10. Exhibits and Schedules ...................................65
     SECTION 10.11. Expenses; Brokers ........................................65
     SECTION 10.12. Press Releases and Public Announcements ..................66
     SECTION 10.13. Assignment; No Third Party Beneficiaries .................66
     SECTION 10.14. Severability .............................................67
     SECTION 10.15. Counterparts .............................................67
     SECTION 10.16. Remedies; Specific Performance ...........................67
     SECTION 10.17. Transition Services Agreement ............................67


SCHEDULES
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Schedule 1.02          Specified Leases
Schedule 2.03(e)       Certain Transactions
Schedule 3.01(c)(i)    Capital Stock of Subsidiaries
Schedule 3.01(c)(ii)   Arrangements with Respect to Capital Stock
Schedule 3.01(c)(iii)  Ownership Interests of the Company in its Subsidiaries
Schedule 3.04          No Violation; Consents
Schedule 3.05(a)       Unaudited Financial Statements
Schedule 3.05(b)       Audited Financial Statements
Schedule 3.05(c)       Operation Expenses


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                                TABLE OF CONTENTS

                                                                            Page
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Schedule 3.06          Material Adverse Change
Schedule 3.07          Assets
Schedule 3.08(d)       Company Intellectual Property
Schedule 3.08(i)       Computer Software
Schedule 3.09(a)(i)    Employee Benefit Plans
Schedule 3.09(a)(ii)   Benefits to Retirees or Other Terminated Employees
Schedule 3.09(a)(iii)  No Violation of Certain Applicable Law
Schedule 3.09(a)(iv)   No Increase in Benefits or Payments
Schedule 3.09(a)(v)    No "Excess Parachute Payment"
Schedule 3.10          Employees and Labor Relations
Schedule 3.11          No Undisclosed Material Liabilities
Schedule 3.13          Litigation
Schedule 3.15          Environmental Matters
Schedule 3.16          Real Property
Schedule 3.17          Taxes
Schedule 3.18(a)       Financings
Schedule 3.18(b)       Financing Defaults
Schedule 3.18(g)       Bankruptcies
Schedule 3.19          Material Contracts
Schedule 3.22          Licenses and Permits; Governmental Notices
Schedule 5.02          Access to Books and Records
Schedule 5.03          Consents and Approvals
Schedule 6.05(b)       Acceptable Financial Institutions
Schedule 7.02(k)       Transaction Consents
Schedule 7.02(l)       Third Party Agreements

EXHIBITS
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Exhibit A      Employee Benefits Agreement
Exhibit B      Form of Intellectual Property Agreement
Exhibit C      Form of Separation and Distribution Agreement
Exhibit D      Form of Transition Services Agreement
Exhibit E      Form of Legal Opinion
Exhibit F      Financing Commitment Letter
Exhibit G      Acceptable Form of Commitment Letter

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<PAGE>


                            STOCK PURCHASE AGREEMENT

              This STOCK PURCHASE AGREEMENT (this "AGREEMENT"),  dated as of May
16, 2006, is made by and between Pitney Bowes Inc., a Delaware  corporation (the
"SELLER"),  being the sole  stockholder  of Pitney Bowes Credit  Corporation,  a
Delaware corporation (the "COMPANY"), and JCC Management LLC, a Delaware limited
liability  company (the  "PURCHASER").  The Company is a party to this Agreement
solely for the purposes of Section 10.07 hereof.  Unless otherwise expressly set
forth in this  Agreement,  capitalized  terms used herein shall have the meaning
ascribed to such terms in Article I of this Agreement.

              WHEREAS,  the Seller owns four hundred and sixty (460) shares (the
"SHARES")  of common  stock of the  Company,  par value  $0.001  per share  (the
"COMMON STOCK"),  such Shares being all of the issued and outstanding  shares of
capital stock of the Company;

              WHEREAS,  the Seller desires to sell, and the Purchaser desires to
purchase, each of the Shares pursuant to the terms and subject to the conditions
set forth in this Agreement;

              WHEREAS,  it is the  intention of the parties  hereto  that,  upon
consummation  of the sale and purchase of the Shares pursuant to this Agreement,
the Purchaser shall own one hundred percent (100%) of the issued and outstanding
shares of capital stock of the Company;

              WHEREAS,  pursuant to the terms of this Agreement,  the Seller and
the Purchaser  shall jointly  complete and make a timely  election under Section
338(h)(10)  of the Code with  respect to the  Company  and each of the  eligible
members of the Company  Group (as  defined  below) on Form 8023 or in such other
manner as may be required by rule or  regulation  of the IRS (as defined  below)
and shall  jointly make an election in the manner  required  under any analogous
provisions  of state or local law with  respect to the  Company  and each of the
eligible members of the Company Group;

              WHEREAS,  contemporaneously  herewith, the Company, the Seller and
the Purchaser are entering into an Employee Benefits Agreement,  a copy of which
is attached hereto as EXHIBIT A (the "EMPLOYEE BENEFITS AGREEMENT");

              WHEREAS,  as a condition to the  consummation of the  Transactions
(as defined below)  contemplated  hereby,  the Seller and the Company will enter
into the Distribution Agreements (as defined below);

              WHEREAS,  as a condition to the  consummation of the  Transactions
and in accordance  with the  Separation and  Distribution  Agreement (as defined
below)  and  subject to the terms and  conditions  thereof,  following  the date
hereof,  the Seller and its  Subsidiaries  (as defined  below) will engage in an
internal  restructuring to effectuate the PBGFS Contribution (as defined below),
the Company  Contribution  (as  defined  below) and the PBGFS  Distribution  (as
defined below) as more fully described in Schedules  2.2(a)(i),  2.2(a)(iii) and
2.6(a)(iv) and Article III of the Separation and Distribution  Agreement and the
PBG  Restructuring  (as  defined in Section  9.07(c)  below)  (the  transactions
contemplated by this recital, the "INTERNAL RESTRUCTURING");

              WHEREAS,  as a condition to the  consummation of the  Transactions
and in accordance with the Separation and Distribution  Agreement and subject to
the  terms and

<PAGE>


conditions thereof,  following the date hereof and after the consummation of the
Internal  Restructuring,  the Company  will  contribute  to Pitney  Bowes Global
Financial  Services LLC (f/k/a PB Mailing  Financial  Services Inc.), a Delaware
limited liability company, and as of the date hereof a Subsidiary of the Company
("PBGFS"),  certain  of its  assets and  transfer  certain  of its  liabilities,
including, the Company's outstanding Indebtedness with respect to the Indentures
(as defined below) (collectively, the "PBGFS CONTRIBUTION");

              WHEREAS,  as a condition to the  consummation of the  Transactions
and in accordance with the Separation and Distribution  Agreement and subject to
the terms and conditions thereof,  after the PBGFS Contribution and prior to the
PBGFS  Distribution,  the Seller will  contribute to the Company  certain of its
assets and  transfer  certain of its  liabilities  and the Seller will assume or
otherwise   retire,   cancel  or  forgive   certain   outstanding   intercompany
Indebtedness  of  the  Company  and  the  Company  will  satisfy  the  remaining
outstanding intercompany Indebtedness that was not assumed or otherwise retired,
cancelled or forgiven by the Seller (collectively,  the "COMPANY CONTRIBUTION");
and

              WHEREAS,  as a condition to the  consummation of the  Transactions
and in accordance with the Separation and Distribution  Agreement and subject to
the terms and conditions thereof, after the Company Contribution and immediately
prior  to the  Closing,  the  Company  will  distribute  all  of the  membership
interests of PBGFS held by the Company to the Seller (the "PBGFS DISTRIBUTION").

              NOW, THEREFORE, the parties hereto, intending to be legally bound,
hereby agree as follows:

                                   ARTICLE I

                                   DEFINITIONS

              (a)    As used in this  Agreement,  the following terms shall have
the following meanings:

              "ACQUISITION  PROPOSAL"  means (a) any inquiry,  proposal or offer
(whether or not in writing)  from any Person or group  directly or indirectly to
acquire or purchase, in a single transaction or series of transactions, by stock
acquisition, asset acquisition, merger, consolidation, liquidation, dissolution,
business  combination,  recapitalization or similar transaction (i) at least 10%
or more of the consolidated  assets of the Company and its  Subsidiaries  (after
taking into effect the PBGFS  Contribution,  the  Company  Contribution  and the
PBGFS  Distribution),  (ii) at least  10% or more of any class of equity or debt
securities of the Company (after taking into effect the PBGFS Contribution,  the
Company  Contribution and the PBGFS  Distribution) or (iii) at least 10% or more
of any  class  of  equity  or debt  securities  of one or more of the  Company's
Subsidiaries  (after  taking  into  effect the PBGFS  Contribution,  the Company
Contribution and the PBGFS Distribution)  which in the aggregate  constitute 10%
or more of the net revenues,  net income or assets (including equity securities)
of the  Company  and its  Subsidiaries  (after  taking  into  effect  the  PBGFS
Contribution,  the Company  Contribution and the PBGFS  Distribution) or (b) any
public announcement by or on behalf of the Company or any of its Affiliates of a
proposal,  plan or intention to engage in any of the foregoing or enter into any

                                      -2-
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agreement  with  respect  to  the  foregoing,   in  each  case  other  than  the
Transactions or the Internal Restructuring.

              "AFFILIATE"  means,  with respect to any Person,  any other Person
directly or indirectly  controlling,  controlled by, or under direct or indirect
common control with,  such Person.  For the purposes of this  definition and the
"Company Group" definition, "control" when used with respect to any Person means
the power to direct the  management  and  policies of such  Person,  directly or
indirectly,  whether through the ownership of voting securities,  whether or not
through one or more  intermediaries,  by Contract  or  otherwise;  and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.

              "APPLICABLE LAW" means any United States Federal,  state, local or
foreign law, statute,  rule,  regulation,  order,  writ,  injunction,  judgment,
decree or Permit of any Governmental Authority.

              "BIG FOUR PUBLIC ACCOUNTING FIRMS" means each of Deloitte & Touche
LLP, Ernst & Young LLP, KPMG LLP, and PricewaterhouseCoopers LLP.

              "BOARD OF DIRECTORS" means, with respect to any Person,  its board
of directors or similar governing body.

              "BUSINESS"  means the business and  operations of providing  Large
Ticket  Financing  and  syndication  for a wide  variety  of real  property  and
personal  property  as of the  Closing  Date,  but in any  event  not the  PBGFS
Business or the Seller Business.

              "BUSINESS DAY" means any day other than a Saturday, a Sunday, or a
day when banks in the City of New York are required or  authorized by Applicable
Law to be closed.

              "CAPITAL  STOCK"  means (a) with  respect to any Person  that is a
corporation,  any and all  shares,  interests,  participations,  rights or other
equivalents  (however designated) of corporate stock and (b) with respect to any
other Person, any and all partnership or other equity interests of such Person.

              "CERBERUS"  means Cerberus  Capital  Management,  L.P., a Delaware
limited partnership.

              "CLOSING  DATE  BALANCE  SHEET" means the  unaudited  combined pro
forma balance sheet of Pitney Bowes Capital  Services  (after taking into effect
the Internal Restructuring, the PBGFS Contribution, the Company Contribution and
the PBGFS  Distribution)  as of the Closing Date prepared in accordance with the
same accounting  policies,  principles,  practices and methods used in preparing
the  Unaudited  Balance  Sheet as reflected in the notes thereto and the Company
Audited Financial Statements.

              "CLOSING  DATE  NET  WORKING  CAPITAL"  of  Pitney  Bowes  Capital
Services  shall mean the  following  from the Closing  Date Balance  Sheet:  the
difference between Current Assets LESS Current Liabilities.

                                      -3-
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              "CLOSING DATE WORKING CAPITAL  SHORTFALL" shall mean the amount by
which the Company's Closing Date Net Working Capital is negative.

              "CLOSING DATE WORKING  CAPITAL  SURPLUS"  shall mean the amount by
which the Company's Closing Date Net Working Capital is positive.

              "COBRA" means the Consolidated  Omnibus Budget  Reconciliation Act
of 1985, as amended.

              "CODE" means the Internal Revenue Code of 1986, as amended.

              "COMBINED  TAX RETURN" means a  consolidated,  combined or unitary
Income Tax Return that actually includes, by election or otherwise,  one or more
members of the Pitney Bowes Group and one or more members of the Company Group.

              "COMPANY  2006  FIRST  QUARTER  FINANCIAL  STATEMENTS"  means  the
unaudited pro forma  balance sheet of Pitney Bowes Capital  Services as of March
31, 2006 and the unaudited pro forma  statement of operations  and cash flows of
Pitney  Bowes  Capital  Services  for the three (3) month period ended March 31,
2006 (in each case after  taking into  effect the  Internal  Restructuring,  the
PBGFS  Contribution,  the Company  Contribution and the PBGFS  Contribution) and
related  footnotes thereof prepared in accordance with GAAP (except as disclosed
in  footnote 1  thereto)  on a basis  consistent  with the  Unaudited  Financial
Statements.

              "COMPANY  2005  AUDITED  FINANCIAL  STATEMENTS"  means the audited
combined  balance sheet of Pitney Bowes Capital Services as of December 31, 2005
and combined statements of income,  changes in invested equity and cash flows of
Pitney  Bowes  Capital  Services  (in each case  after  taking  into  effect the
Internal Restructuring, the PBGFS Contribution, the Company Contribution and the
PBGFS  Distribution)  for the year  ended,  December  31,  2005 and all  related
footnotes  thereof  prepared in  accordance  with GAAP  (except as  disclosed in
footnote  1  thereto)  on  a  basis  consistent  with  the  Unaudited  Financial
Statements.

              "COMPANY AUDITED FINANCIAL  STATEMENTS" means the audited combined
balance sheet of Pitney Bowes Capital Services as of December 31, 2005, 2004 and
2003 and  combined  statements  of income,  changes in invested  equity and cash
flows of Pitney  Bowes  Capital  Services (in each case after taking into effect
the Internal Restructuring, the PBGFS Contribution, the Company Contribution and
the PBGFS  Distribution)  for the years ended,  December 31, 2005, 2004 and 2003
and all related  footnotes  thereof  prepared in accordance with GAAP (except as
disclosed  in  footnote  1 thereto)  on a basis  consistent  with the  Unaudited
Financial Statements.

              "COMPANY GROUP" means the Company,  each Subsidiary of the Company
and each other Person that is or will be  controlled  directly or  indirectly by
the Company immediately after the Closing;  for the avoidance of doubt, it shall
not include PBGFS.

              "CONFIDENTIALITY  AGREEMENT" means the Confidentiality  Agreement,
dated September 27, 2004, by and between J.P. Morgan  Securities  Inc., as agent
for Seller, and Cerberus, as amended from time to time.

                                      -4-
<PAGE>


              "CONTRACT" means with respect to any specified Person, any written
contract, Lease, license, loan agreement,  mortgage,  security agreement,  trust
indenture,  note, bond, or other commitment,  agreement,  Financing  Document or
instrument  to which such Person is legally  bound or under which such Person is
legally obligated.

              "CURRENT  ASSETS" means the lesser of (i) Non-Cash  Current Assets
and (ii) ten percent (10%) of Current Liabilities.

              "NON-CASH  CURRENT  ASSETS"  means the amount of non-cash  current
assets of Pitney Bowes Capital Services (after giving effect to the exclusion of
current assets of PBG Holdings) equal to the sum of (i)  reimbursable  expenses,
(ii) prepaid  expenses,  (iii) prepaid rent and (iv) other current  assets,  but
excluding leases, loans and other rents receivables.

              "CURRENT  LIABILITIES" means the amount of current  liabilities of
Pitney Bowes Capital  Services  (after giving effect to the exclusion of current
liabilities  of PBG  Holdings),  equal to the sum of (i)  accounts  payable  and
accrued    liabilities,    (ii)   customer   advances   and   deposits,    (iii)
commissions/retention  payable and (iv) other current liabilities, but excluding
deferred  Taxes,  Tax  liabilities  and  the  current  portion  of  non-recourse
Indebtedness.

              "DISTRIBUTION  AGREEMENTS"  means the Separation and  Distribution
Agreement, the Employee Benefits Agreement, the Intellectual Property Agreement,
the  Transition  Services  Agreement  and any  other  documents,  agreements  or
instruments to be entered into in connection with the Transactions, the Internal
Restructuring,  the PBGFS Contribution,  the Company  Contribution and the PBGFS
Distribution, and the exhibits, schedules and annexes thereto.

              "EMPLOYEE  BENEFIT  PLAN"  means any  "employee  benefit  plan" as
defined  in  Section  3(3) of  ERISA  and any  other  employee  benefit  plan or
agreement,  including  but not  limited  to, any bonus,  deferred  compensation,
profit-sharing, pension, severance, stay-bonus, retention, change in control, or
stock option plan or  agreement,  (a) that is currently  maintained,  sponsored,
contributed  to, or required to be  contributed  to by the Company or any of its
Subsidiaries with respect to any employees or former employees of the Company or
any of its  Subsidiaries  or (b) with respect to which the Company or any of its
Subsidiaries may otherwise have any liability,  including but not limited,  to a
plan  subject to Title IV of ERISA or Section  412 of the Code to which an ERISA
Affiliate currently contributes.

              "ENVIRONMENTAL CLAIMS" refers to any complaint, summons, citation,
notice, directive, order, claim, litigation, investigation, notice of violation,
judicial or administrative  proceeding,  judgment, letter or other communication
from any governmental agency, department,  bureau, office or other authority, or
any third party involving  violations of Environmental Laws or Releases (a) from
any  assets,  properties  or  businesses  of the Company or any  predecessor  in
interest or (b) from or onto any facilities which received Hazardous  Substances
generated by the Company, its Subsidiaries or any predecessor in interest.

              "ENVIRONMENTAL  LAW" means any applicable  federal,  state, local,
common or foreign law, statute,  ordinance,  rule,  regulation,  code,  license,
Permit,   authorization,   approval,   consent,  judgment,  decree,  injunction,
requirement or enforceable  agreement with any  governmental  entity relating to
(a) the protection, preservation or restoration of the environment

                                      -5-
<PAGE>


(including air, water vapor, surface water, groundwater,  drinking water supply,
surface  land,  subsurface  land,  plant and  animal  life or any other  natural
resource)  or  (b)  the  use,   storage,   recycling,   treatment,   generation,
transportation,  processing, handling, labeling, production, Release or disposal
of Hazardous  Substances,  including the Comprehensive  Environmental  Response,
Compensation and Liability Act, 42 U.S.C. 9601 ET SEQ., as amended; the Resource
Conservation and Recovery Act, 42 U.S.C. 6901 ET SEQ., as amended; the Clean Air
Act, 42 U.S.C. 7401 ET SEQ., as amended;  the Clean Water Act, 33 U.S.C. 1251 ET
SEQ., as amended; the Occupational Safety and Health Act, 29 U.S.C. 655 ET SEQ.,
in each case as amended.

              "EQUITY  COMMITMENT  LETTER" means the Equity  Commitment  Letter,
dated as of the date  hereof,  by and between the  Purchaser  (or its  permitted
assigns in accordance with Section 10.13) and Cerberus.

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

              "ERISA  AFFILIATE"  means any trade or  business  (whether  or not
incorporated) that is part of the same controlled group, or under common control
with, or part of an affiliated  service group that includes the Company,  within
the  meaning  of Code  Section  414(b) or (c) and with  respect  to an  Employee
Benefit  Plan  subject  to Code  Section  412 or Title IV of ERISA,  within  the
meaning of Code Section 414(b), (c), (m) or (o).

              "ESTIMATED  CLOSING  DATE NET  WORKING  CAPITAL"  of Pitney  Bowes
Capital  Services  shall mean the  following  from the  Estimated  Closing  Date
Balance Sheet: the difference between Current Assets LESS Current Liabilities.

              "ESTIMATED  TAX RETURN" means any Tax Return filed with  estimated
Tax payments due on or before the Closing Date.

              "ESTIMATED  WORKING  CAPITAL  SHORTFALL"  shall mean the amount by
which the Company's Estimated Closing Date Net Working Capital is negative.

              "ESTIMATED WORKING CAPITAL SURPLUS" shall mean the amount by which
the Company's Estimated Closing Date Net Working Capital is positive.

              "FINANCING" means a transaction,  which the Company, any Affiliate
of the Company or the PBG Partnership has entered into on behalf of the Business
whereunder such Person has extended credit to or is otherwise owed  Indebtedness
from another party,  including a loan, lease or conditional  sale, in each case,
where the  obligation  of the other  party is  secured  by, or such  transaction
otherwise involves the financing of, Real Property or personal property; for the
avoidance  of doubt,  a  Financing  shall  include  any  sale-leaseback  of Real
Property but not include a PBGFS Financing.

              "FINANCING   COMMITMENT  LETTER"  means  that  certain  commitment
letter,  dated May 16, 2006,  addressed to the Purchaser  from the lenders party
thereto or such other reputable financial  institution(s)  reasonably acceptable
to the Purchaser, a copy of which is attached hereto as EXHIBIT F.

                                      -6-
<PAGE>


              "FINANCING DOCUMENTS" means, with respect to each Financing,  each
lease,  loan or  conditional  sale  agreement,  credit and sale  agreement,  tax
indemnity  agreement,  security  agreement,  promissory note,  pledge agreement,
mortgage,  guarantee,  or other similar agreement,  and including any amendment,
modification  or  extension  thereof and all  material  agreements  entered into
pursuant thereto or in connection therewith.

              "FINANCING  FILE"  means,  as to each  Financing:  (a)  the  fully
executed copies of the Financing Documents;  (b) the original title document for
the  related  leased  property  or a  duplicate  certified  by  the  appropriate
Governmental  Authority that issued the original  thereof or the application for
such title document; (c) documents evidencing or relating to liability, casualty
or insurance  policies;  (d) documents  evidencing any vendor recourse;  (e) the
credit  application  of  each  Obligor;   (f)  the  fully  executed   acceptance
certificates  with respect to property  covered by the  applicable  large ticket
financing;  and (g) all material  correspondence and other documents relating to
any breach or default by the Obligor under such Financing.

              "GAAP"  means  United   States   generally   accepted   accounting
principles, consistently applied.

              "GOVERNMENTAL  AUTHORITY" means any instrumentality,  subdivision,
court,  administrative  agency,  commission,  official or other authority of the
United   States  or  any  other  country  or  any  state,   province,   prefect,
municipality,  locality or other government or political subdivision thereof, or
any  quasi-governmental  or private  body  exercising  any  regulatory,  taxing,
importing or other governmental or quasi-governmental authority.

              "GOVERNMENTAL ORDER" means any order, writ, judgment,  injunction,
decree, stipulation,  determination or award entered by or with any Governmental
Authority.

              "HAZARDOUS  SUBSTANCE"  means,  without  regard to  amount  and/or
concentration (a) any element,  compound, or chemical that is defined, listed or
otherwise  classified as a contaminant,  pollutant,  toxic  pollutant,  toxic or
hazardous  substances,  extremely  hazardous  substance or  chemical,  hazardous
waste, medical waste,  biohazardous or infectious waste, special waste, or solid
waste   under   Environmental   Laws,   (b)   petroleum,    petroleum-based   or
petroleum-derived  products,  (c) polychlorinated  biphenyls,  (d) any substance
exhibiting  a  hazardous  waste  characteristic,  including  but not  limited to
corrosivity, ignitibility, toxicity or reactivity, as well as any radioactive or
explosive materials and (e) any asbestos-containing materials in friable form.

              "HSR ACT" shall mean the Hart Scott Rodino Antitrust  Improvements
Act of 1976, as amended, and the rules and regulations promulgated thereunder.

              "INCOME  TAX" means  federal  income  tax and any other  income or
franchise tax imposed on or measured by net income.

              "INCOME  TAX  RETURN"  means any Tax  Return in  respect of Income
Taxes.

                                      -7-
<PAGE>


              "INDEBTEDNESS"  means as to any Person,  all  indebtedness  to any
other  Person for  borrowed  money,  including  capitalized  lease  obligations,
synthetic  lease  obligations,  sale  leaseback  obligations  and other  similar
indebtedness   obligations,   whether   secured  or  unsecured,   and  all  such
indebtedness  of any other Person which is directly or indirectly  guaranteed by
such Person or which such Person has agreed to purchase or otherwise  acquire or
in respect of which it has otherwise assured against loss.

              "INDENTURES" means collectively,  the (a) Indenture,  dated May 1,
1985,  by and between the Company and  Suntrust  Bank (as  successor  trustee to
Bankers Trust Company),  with supplemental  indentures,  dated December 1, 1986,
February 15, 1989,  May 1, 1989 and  February 4, 2005 and (b)  Indenture,  dated
July 31, 1999, by and between the Company and Suntrust Bank, with a supplemental
indenture, dated February 4, 2005.

              "INDUSTRY"  means the  equipment  and Real  Property  Large Ticket
Financing and syndication industry and any related industries.

              "INTELLECTUAL PROPERTY" means (a) all foreign and domestic patents
(including  all  reissues,  divisions,  continuations,  renewals and  extensions
thereof),  patent  applications and  registrations,  patent rights,  trademarks,
trademark  applications and  registrations,  service marks,  trade names,  brand
names,  d/b/a's,  domain  names,  logos,  trade dress,  other indicia of origin,
copyrights, copyright registrations and applications,  confidential information,
trade secrets, proprietary technology,  know-how,  inventions,  discoveries, and
improvements,  (b) all  information  and data,  whether in printed or electronic
form and whether contained in a database or otherwise,  including customer lists
(collectively,  "DATA")  and (c) all other  forms of  intellectual  property  or
proprietary  rights and claims or causes of action  arising out of or related to
any infringement,  misappropriation  or other violation of any of the foregoing,
including rights to recover for past, present and future violations thereof.

              "INTELLECTUAL  PROPERTY AGREEMENT" means the Intellectual Property
Agreement by and between the Company and the Seller substantially in the form of
EXHIBIT B attached  hereto to be entered into in  connection  with the terms and
subject to the conditions set forth in this Agreement.

              "IRS" means the Internal Revenue Service.

              "IT  SYSTEMS"  means  electronic  data  processing,   information,
recordkeeping,   communications,    telecommunications,    networking,   account
management,  inventory  management and other such  applications,  software,  and
hardware,  equipment and services (including applications and software installed
on hardware and equipment, and databases,  firmware, and related documentation),
and Internet websites and related content.

              "LARGE TICKET FINANCING" means a Financing similar to those in the
portfolio listed or described on SCHEDULE 3.18(A) hereto.

              "LEASE" means any and all leases, subleases,  tenancies,  options,
concession  agreements,  rental  agreements,   occupancy  agreements,  franchise
agreements,   access   agreements  and  any  other  agreements   (including  all
amendments, extensions,  replacements, renewals, modifications and/or guarantees
thereof), whether or not of record and whether now in existence

                                      -8-
<PAGE>


or hereafter entered into,  affecting the use or occupancy of all or any portion
of any Real Property.

              "LIEN" means any mortgage,  pledge,  deed of trust, lien, security
interest, claim, restriction, charge or encumbrance of any kind.

              "LOSS"  or  "LOSSES"  shall  mean  the  actual  damages,   losses,
liabilities, damages, obligations,  deficiencies,  penalties and fines sustained
by an Indemnified  Party with respect to a claim, or which it is required to pay
or incur to a third  party  claimant  by reason of a  settlement  or judgment in
respect of a claim,  suit,  action,  proceeding or  investigation,  and includes
reasonable attorneys' fees, witness fees and other costs incurred or required to
be  paid  by  the  indemnified  party  in  the  ordinary  course  of  reasonably
investigating, defending or resolving the claim.

              "MATERIAL ADVERSE EFFECT" means any change in or any effect on the
Company  (after  taking  into  effect  the  PBGFS   Contribution,   the  Company
Contribution and the PBGFS  Distribution) or the Business that is,  individually
or in the aggregate, materially adverse to the Company (after taking into effect
the PBGFS Contribution, the Company Contribution and the PBGFS Distribution), or
the assets (both tangible and intangible),  liabilities, financial condition, or
results of operations of the Company Group  (excluding the assets (both tangible
and  intangible),  liabilities  and  business  to be  contributed  to  PBGFS  in
connection with the PBGFS  Contribution);  PROVIDED,  HOWEVER,  that in no event
shall any  change or effect  related  to or  resulting  from the  following,  be
considered  a Material  Adverse  Effect:  (a) changes  generally  applicable  to
companies in the Industry  (including changes in interest rates or conditions in
financial markets, on an international, national or regional basis or changes in
the United States or global  economy in general or any act of terrorism,  war or
natural disaster), as opposed to changes specifically applicable to the Business
or changes that affect the Company in a  disproportionate  manner as compared to
other  companies  of similar  size and credit  rating in the  Industry;  (b) any
action  or  inaction  by the  Business'  employees,  vendors  and  non-Affiliate
counterparties to the Financings and the Relevant Contracts, which relate to the
Business,  solely  as a  result  of  the  execution  of  this  Agreement  or the
Transactions or the announcement thereof; (c) change to the senior management of
the Company or any other member of the Company Group,  including the resignation
or  termination of officers and executives of the Company or any other member of
the Company Group; (d) the Internal Restructuring;  and (e) the audit of Seller'
consolidated tax returns for 1995 and subsequent years.

              "OBLIGOR"  means a Person  (other  than the  Company or any of its
Affiliates) who is obligated under a Financing.

              "OPERATION  EXPENSES"  means,  with  respect to any  statement  of
operations,  an amount  equal to the sum of the amount set forth in the selling,
general and  administrative  expenses line item of such statement of operations;
PROVIDED,  HOWEVER,  such line  item  shall not  reflect  deferred  Taxes or Tax
liabilities  or any  expenses  related to the  Transactions  or any  predecessor
transaction between the parties.

              "OUT-OF-POCKET  EXPENSES"  shall  include,  but not be limited to,
reasonable  attorney's fees, accountant fees and other related professional fees
and disbursements.

                                      -9-
<PAGE>


              "PBGFS   BUSINESS"  means  (a)  the  business  and  operations  of
providing lease  financing of equipment  manufactured or supplied by the Seller,
(b) all other  business  (other than the  Business)  conducted  by PBGFS  (after
taking into effect the PBGFS Contribution), including small ticket financing and
(c) except as otherwise  expressly provided herein, any terminated,  divested or
discontinued   businesses  or  operations  that  at  the  time  of  termination,
divestiture  or   discontinuation   primarily  related  to  the  businesses  and
operations as described in subsection  (a) above as then  conducted,  but in any
event not the  Business,  the Seller  Business  and  businesses  and  operations
related to the Excluded  PBGFS Assets (as such term is defined in the Separation
and Distribution Agreement).

              "PBG  PARTNERSHIP"  means PBG Capital  Partners L.L.C., a Delaware
limited liability company.

              "PBG  PARTNERSHIP  2005 AUDITED  FINANCIAL  STATEMENTS"  means the
audited  statements  of assets,  liabilities  and members'  equity,  revenue and
expenses, changes in members' equity and cash flows of the PBG Partnership as of
December  31, 2005 (after  taking into effect the  Internal  Restructuring,  the
PBGFS Contribution, the Company Contribution and the PBGFS Distribution) for the
year ended,  December  31, 2005 and all related  footnotes  thereof  prepared in
accordance with GAAP.

              "PBG PARTNERSHIP  AUDITED FINANCIAL  STATEMENTS" means the audited
statements of assets,  liabilities  and members'  equity,  revenue and expenses,
changes in members'  equity and cash flows of the PBG Partnership as of December
31, 2005,  2004 and 2003 (after  taking into effect the Internal  Restructuring,
the PBGFS Contribution, the Company Contribution and the PBGFS Distribution) for
the years  ended,  December 31,  2005,  2004 and 2003 and all related  footnotes
thereof prepared in accordance with GAAP.

              "PBGFS  FINANCING"  means a  transaction  (other than a Financing)
which relates to the PBGFS Business and in which Seller or any Subsidiary of the
Seller  has  extended  credit  to  another  party,  including  a loan,  lease or
conditional  sale,  in each case,  where the  obligation  of the other  party is
secured by, or such  transaction  otherwise  involves the  financing of personal
property.

              "PERMIT"   means   permits,   licenses,   franchises,   variances,
exemptions,  orders,  registrations,  certificates  (including  certificates  of
occupancy),  consents,  approvals and other authorizations  issued or granted by
Governmental  Authorities  and  any  other  right  or  authorization  held  by a
specified  Person  granted or  recognized  by a  Governmental  Authority  in any
jurisdiction and required for the conduct of the Business.

              "PERMITTED  LIENS"  means (a)  mechanics',  carriers',  workmen's,
repairmen's  or other like Liens  arising or incurred in the ordinary  course of
business  consistent with past practice,  Liens arising under original  purchase
price  conditional  sales  contracts  and  equipment  leases with third  parties
entered into in the ordinary  course of business  consistent  with past practice
and Liens for Taxes that are not due and payable or that may  thereafter be paid
without  penalty,  (b) Liens  that  secure  obligations  that are  reflected  as
liabilities  in  the  Unaudited  Financial  Statements  or the  Company  Audited
Financial Statements, (c) Liens that are permitted under any Financing Document,
(d) Liens that that do not materially impair, and could not

                                      -10-
<PAGE>


reasonably be expected to materially  impair, the continued use and operation of
the assets  that  relate to the  Financings,  (e) other  leases,  subleases  and
similar   agreements,   imperfections   of   title  or   easements,   covenants,
rights-of-way and encumbrances, if any, that do not materially impair, and could
not  reasonably  be expected to  materially  impair,  the value of the ownership
interest in (whether it be fee,  leasehold or other),  or the  continued use and
operation  of the assets to which they relate in the conduct of the  Business as
presently  conducted and (f) to the extent that the following do not  materially
impair,  and could not reasonably be expected to materially impair, the value of
the ownership  interest in (whether it be fee, leasehold or other), or continued
use and  operation  of, the assets to which  they  relate in the  conduct of the
Business as presently  conducted  (i) zoning,  building and other  similar legal
restrictions,  (ii) Liens that have been  placed by any  developer,  landlord or
other third party on property over which the Company or any of its  Subsidiaries
has  easement  rights or on any leased  property  and  subordination  or similar
agreements relating thereto and (iii) unrecorded easements, covenants, rights of
way and other similar restrictions.

              "PERMITTED TRANSFEREE" means, with respect to the Purchaser or any
Permitted  Transferee of the  Purchaser,  any Subsidiary of the Purchaser or any
Affiliate of the Purchaser (but excluding any portfolio company of any member of
the  Purchaser's  Group  that  does not  engage  in  businesses  similar  to the
Business);  PROVIDED,  HOWEVER,  that each  Permitted  Transferee  must agree in
writing to be bound by the terms of this  Agreement  and the  Equity  Commitment
Letter to the same  extent,  and in the same  manner,  as the  Purchaser  or the
transferring  Permitted  Transferee  prior to the transfer of any Shares to such
Permitted Transferee; PROVIDED, FURTHER, HOWEVER, that the transfer of Shares to
such Permitted Transferee is in compliance with all applicable securities laws.

              "PERSON" means any individual,  partnership,  corporation, limited
liability  company,  joint venture,  association,  joint-stock  company,  trust,
unincorporated  organization,  government  or  agency or  political  subdivision
thereof, or other entity.

              "PITNEY BOWES CONSOLIDATED GROUP" means the Seller and each direct
and indirect corporate subsidiary, including a member of the Company Group, that
is eligible to join with the Seller or a member of the Pitney Bowes Group in the
filing of a consolidated federal income tax return.

              "PITNEY  BOWES GROUP" means the Seller and each Person (other than
any member of the Company Group) that is an affiliate of the Seller  immediately
after the Closing Date.

              "POST-CLOSING  TAXES" means all Taxes  incurred by,  imposed on or
asserted against any member of the Pitney Bowes Group or the Company Group for a
Post-Closing  Tax Period and shall include any Taxes (including Taxes related to
a Straddle  Period)  incurred by any member of the Company  Group as a result of
any transaction  undertaken by such member that is not specifically set forth in
this Agreement or the  Distribution  Agreements  that is outside of the ordinary
course of business on the Closing Date after the Closing.

              "POST-CLOSING TAX PERIOD" means (i) any tax period beginning after
the Closing Date and (ii) with respect to a Straddle Period,  the portion of the
Straddle Period that commences on the day immediately after the Closing Date.

                                      -11-
<PAGE>


              "PRE-CLOSING  TAXES" means all Taxes  incurred  by,  imposed on or
asserted against any member of the Pitney Bowes Group or the Company Group for a
Pre-Closing Tax Period but shall not include any Taxes  (including Taxes related
to a Straddle  Period)  incurred by any member or the  Purchaser  of the Company
Group as a result  of any  transaction  undertaken  by such  member  that is not
specifically set forth in this Agreement or the Distribution Agreements and that
is outside of the  ordinary  course of business  on the  Closing  Date after the
Closing including,  without  limitation,  the Purchaser making an election under
Section 338(g) of the Code with respect to any member of the Company Group.

              "PRE-CLOSING  TAX  PERIOD"  means (i) any tax period  ending on or
before the Closing Date and (ii) with respect to a Straddle Period,  the portion
of the Straddle Period ending on and including the Closing Date.

              "PRE-CLOSING  TAX RETURN" means any Tax Return that includes Taxes
allocable to the  Pre-Closing Tax Period but excluding any Tax Return related to
a Straddle Period.

              "PREPAID TAXES" means all payments of Taxes made in respect of the
Tax  liability  of the  Company or any member of the Company  Group  (whether by
reason of an  estimated  Tax  payment or  otherwise)  on or prior to the Closing
Date, including any refunds or credits attributable to a Pre-Closing Tax Period,
applied to the Straddle Period.

              "PURCHASER'S  GROUP"  means,  collectively,  any Person that is an
Affiliate of the Purchaser or Cerberus.

              "REAL PROPERTY" means, collectively, all right, title and interest
(including any leasehold, mineral or other estate) in and to any and all parcels
of or  interests  in real  property  owned,  leased or  operated  by any Person,
whether by lease,  license or other  means,  together  with,  in each case,  all
easements,  hereditaments and appurtenances  relating thereto,  all improvements
and  appurtenant  fixtures and equipment,  all general  intangibles and Contract
rights and other  property  and rights  incidental  to the  ownership,  lease or
operation thereof.

              "RELEASE"  means  any  spilling,   leaking,   pumping,   emitting,
emptying,  discharging,  injecting,  escaping, leaching,  migrating, dumping, or
disposing of Hazardous  Substances  (including the  abandonment or discarding of
barrels, containers or other closed receptacles containing Hazardous Substances)
into the environment.

              "RELEVANT  CONTRACTS" means the following  categories of Contracts
that solely  relate to the  Business:  (a) any Contract to purchase or otherwise
acquire or sell or otherwise  dispose of any interest in Real Property;  (b) any
Lease or similar agreement to which a non-affiliated  party is the lessee of, or
holds or uses, any  machinery,  equipment,  vehicle or other  tangible  personal
property  owned  by the  Company  Group  (at the time of the  Closing);  (c) any
Contract  relating  to  a  partnership,   joint  venture,   strategic  alliance,
exclusivity,  consortium or other similar arrangement; (d) any Contract relating
to Indebtedness;  (e) any outstanding  customer option relating to any Contract;
and (f) any employment Contract.

              "REPRESENTATIVES" means, collectively, with respect to any Person,
such Person's  directors,  partners,  members,  officers,  employees,  financial
advisors, lenders, insurers,

                                      -12-
<PAGE>


consultants, accountants, attorneys, agents, representatives,  equity investors,
rating agencies, controlled Affiliates and controlling persons of such Person or
its controlled Affiliates.

              "SELLER  BUSINESS"  means  (a)  the  business  and  operations  of
providing integrated mail, messaging, and document management systems,  services
and solutions for organizations of all sizes, (b) all other business  (including
the business and  operations  (other than the Business)  related to the Company)
and (c) except as otherwise expressly provided herein, any terminated,  divested
or  discontinued  businesses  or  operations  that at the  time of  termination,
divestiture  or   discontinuation   primarily  related  to  the  businesses  and
operations as described in subsection  (a) above as then  conducted,  but in any
event not the Business, the PBGFS Business and businesses and operations related
to the  Excluded  PBGFS  Assets (as such term is defined in the  Separation  and
Distribution Agreement).

              "SEPARATION AND  DISTRIBUTION  AGREEMENT" means the Separation and
Distribution  Agreement by and between the Seller and the Company  substantially
in the form of EXHIBIT C attached  hereto to be entered into in connection  with
the Internal Restructuring, the PBGFS Contribution, the Company Contribution and
the PBGFS Distribution.

              "SPECIFIED LEASES" means the Financings listed on SCHEDULE 1.02.

              "STRADDLE  PERIOD"  means any  taxable  period  that  begins on or
before the Closing Date and ends after the Closing Date.

              "STRADDLE  PERIOD TAX RETURN"  means any Tax Return that  includes
Taxes allocable to the Straddle Period other than a Combined Tax Return.

              "SUBSIDIARY"  means, with respect to any Person (a) a corporation,
a  majority  of  whose  Capital  Stock  with  voting   power,   under   ordinary
circumstances,  to elect directors is at the time, directly or indirectly, owned
by such  Person,  by a subsidiary  of such Person,  or by such Person and one or
more  subsidiaries  of such Person,  (b) a partnership in which such Person or a
subsidiary of such Person is, at the date of determination, a general partner of
such partnership and has the power to direct the policies and management of such
partnership  or (c) any other Person  (other than a  corporation)  in which such
Person, a subsidiary of such Person or such Person and one or more  subsidiaries
of such Person,  directly or indirectly,  at the date of determination  thereof,
has (i) at least a  majority  ownership  interest  or (ii) the power to elect or
direct the election of a majority of the  directors or other  governing  body of
such Person.

              "SUIT"  means any suit,  claim,  action,  arbitration,  mediation,
opposition, investigation or other proceeding.

              "SUPERIOR  PROPOSAL"  means a written offer made by a Person other
than the Purchaser,  its Affiliates or Persons acting on its behalf (a) on terms
(taken as a whole) that the Board of Directors of the Seller  determines in good
faith would, if consummated,  be more favorable to the Company or the Seller and
their respective stockholders, as applicable, than the Transactions and (b) that
the Board of  Directors  of the Seller  determines  in good faith is  reasonably
capable of being  consummated  (after  taking into  account  such factors as the
Board of Directors of the Seller in good faith deems relevant, including but not
limited to all legal,

                                      -13-
<PAGE>


financial,  regulatory  and  other  aspects  of such  proposal  and  the  likely
availability of any necessary financing).

              "TAX" means any federal, state, local or foreign net income, gross
income, net receipts, gross receipts, profit, severance,  property,  production,
sales,  use,  license,  excise,  franchise,  employment,  payroll,  withholding,
alternative  or  add-on  minimum,  AD  VALOREM,  value-added,  transfer,  stamp,
employment or other tax,  custom duty, fee or other  governmental  charge of any
kind, together with any interest,  fine, penalty,  addition to tax or additional
amount imposed with respect thereto.

              "TAX  ATTRIBUTE"  means any net operating  loss, net capital loss,
investment tax credit, foreign tax credit,  deduction or any loss, credit or tax
attribute  that could be  carried  forward  or back to reduce  taxes  (including
without limitation deductions and credits related to alternative minimum taxes).

              "TAX  MATERIALS"  means  all  Pre-Closing  Tax  Returns  involving
another party hereto (or its  Subsidiaries)  and all Straddle Period Tax Returns
involving another party hereto (or its  Subsidiaries),  or other books,  records
and files relating to such Tax Returns.

              "TAX  MATTER"  means  any  inquiry,  claim,  assessment,  audit or
similar event with respect to Taxes.

              "TAX  RETURN"  means  any tax  return,  statement,  report or form
(including estimated tax returns and reports,  extension requests and forms, and
information  returns and reports) required to be filed with any taxing authority
and any amended  return  (including  any claims for refunds) with respect to the
foregoing.

              "TRANSACTIONS" means solely the transactions  contemplated by this
Agreement,  which, for the avoidance of doubt, does not include the transactions
contemplated by the Internal Restructuring,  the PBGFS Contribution, the Company
Contribution and the PBGFS Distribution.

              "TRANSITION  SERVICES  AGREEMENT"  means the  Transition  Services
Agreement by and between the Company and the Seller substantially in the form of
EXHIBIT D attached  hereto to be entered into in  connection  with the terms and
subject to the conditions set forth in this Agreement.

              (b)    As used herein, the phrase "to the knowledge" of the Seller
as of any date shall mean the actual  knowledge  of Lawrence  Osmanski,  Michael
Costello,  Stephen Wayne, Ann  Schaumberger,  David Kleinman,  Jeffrey Ramos and
Christian Hughes.

              (c)    Titles and headings of sections of this  Agreement  are for
convenience  only and shall not affect the construction of any provision of this
Agreement. Unless the context otherwise requires:

              (i)    a term has the meaning assigned to it;

              (ii)   "or" is not exclusive;

                                      -14-
<PAGE>


              (iii)  "including" means including without limitation; and

              (iv)   words in the  singular  include the plural and words in the
       plural include the singular.

              (d)    As used in this  Agreement,  the following terms shall have
the meanings given thereto in the Sections set forth opposite such terms:

       TERM                                         SECTION
       ----                                         -------
       338 Valuations and Allocations               5.11(b)
       Adjusted 338 Valuations and Allocations      5.11(c)
       ADSP                                         5.11(b)
       Agreement                                    Preamble
       Closing                                      2.02
       Closing Date                                 2.02
       Closing Date Operation Expenses Statement    5.14
       Closing Financial Statements                 2.03(b)
       Collateral Source                            8.07
       Common Stock                                 Recitals
       Company                                      Preamble
       Company Contribution                         Recitals
       Company Intellectual Property                3.08(a)
       Company Lease                                3.16(a)
       Company Software                             3.08(i)
       Data                                         Article I - definition of
                                                    "Intellectual Property"
       Employee Benefits Agreement                  Recitals
       Estimated Closing Date Balance Sheet         2.03(a)
       Estimated Operation Expenses Statement       3.05(c)
       Estimated Working Capital Surplus            2.03(a)
       Extended Termination Date                    10.03(a)(ii)
       Expense Reimbursement                        10.03(b)
       Indemnified Party                            8.03(a)
       Indemnifying Party                           8.03(a)
       Independent Accounting Firm                  2.03(c)
       Internal Restructuring                       Recitals
       Material Contracts                           3.19(a)
       Material Line Item                           3.05(b)
       Negotiation Period                           10.17
       Notice of Disagreement                       2.03(c)
       Participating Management Member              5.15
       PBGFS                                        Recitals
       PBGFS Contribution                           Recitals
       PBGFS Distribution                           Recitals
       PBG Holdings                                 9.07(c)
       PBG Restructuring                            9.07(c)

                                      -15-
<PAGE>


       TERM                                         SECTION
       ----                                         -------
       Purchase Price                               2.01(b)
       Purchaser                                    Preamble
       Purchaser Cure Period                        10.03(a)
       Purchaser Indemnified Party(ies)             8.01(a)
       Purchaser Transaction Documents              4.01
       Resignation List                             5.13
       Scheduled Payments                           5.10
       Schedules                                    10.10
       Seller                                       Preamble
       Seller Cure Period                           10.03(a)
       Seller Indemnified Party(ies)                8.02(a)
       Seller's Option                              10.03(a)(ii)
       Settlement Date                              2.03(d)
       Shares                                       Recitals
       Subscription Agreement                       10.07
       Termination Date                             10.03(a)(ii)
       Termination Payment                          10.03(b)
       Transaction Financing                        4.06
       Transfer Taxes                               9.02(c)
       Unaudited Cash Flows                         3.05(a)
       Unaudited Balance Sheet                      3.05(a)
       Unaudited Financial Statements               3.05(a)
       Unaudited Statement of Operations            3.05(a)
       Update Notice                                3.25(b)
       Working Capital Statement                    2.03(b)


                                   ARTICLE II

                          SALE, PURCHASE AND REPURCHASE

              SECTION 2.01.  AGREEMENT TO SELL AND TO PURCHASE;  PURCHASE PRICE.
(a) On the terms,  and subject to the  conditions,  set forth in this Agreement,
the Seller agrees to sell, convey,  assign,  transfer and deliver free and clear
of all Liens to the Purchaser on the Closing Date,  and the Purchaser  agrees to
purchase from the Seller on the Closing Date, the Shares.  Purchaser may, at any
time  prior to the  Closing  and at its sole  discretion,  assign  its rights to
purchase any or all of the Shares or other rights under this Agreement to one or
more Permitted Transferees.

              (b)    In full  consideration for the purchase by the Purchaser of
the Shares,  subject to the provisions of Section 2.03, the Purchaser  shall pay
to the Seller,  on the Closing  Date,  an aggregate of Seven  Hundred  Sixty-Six
Million Dollars  ($766,000,000.00),  as such amount may be adjusted  pursuant to
Section 2.03(a) and 2.03(e) hereof (the "PURCHASE  PRICE"),  by wire transfer of
immediately  available funds to the account or accounts identified by the Seller
at least two (2) Business  Days prior to the Closing  Date.  The Purchase  Price
shall  also  be  subject  to  the   post-Closing   purchase  price   adjustments
contemplated in Section 2.03 hereof.

                                      -16-
<PAGE>


              SECTION 2.02.  CLOSING.  Subject to the  satisfaction or waiver of
the  conditions  set forth in Article  VII,  the  closing in respect of the sale
referred to in Section 2.01 (the "CLOSING")  shall occur as soon as practicable,
but in any event  not prior to (i) June 30,  2006,  (ii) the  expiration  of the
15-day  calendar  period  provided  for in Section  3.25 hereof to the extent an
Update Notice is delivered to Purchaser  thereunder  and (iii) five (5) calendar
days after satisfaction or waiver of the conditions set forth in Article VII, in
each case unless the parties  hereto agree  otherwise  (such date and time,  the
"CLOSING  DATE").  The Closing shall be held at the offices of White & Case LLP,
located  at 1155  Avenue of the  Americas,  New York,  New York 10036 or at such
other place as the parties hereto shall agree in writing.

              On the Closing Date:

              (a)    The Purchaser shall deliver to the Company:

                     (i)    the  officer's   certificate  of  the  Purchaser  as
                            contemplated by Section 7.01(c); and

                     (ii)   an amount in cash equal to the Purchase Price.

              (b)    The Seller shall deliver to the Purchaser:

                     (i)    the   officer's   certificate   of  the   Seller  as
                            contemplated by Section 7.02(c);

                     (ii)   certificates representing the Shares, which shall be
                            in definitive form and registered in the name of the
                            Purchaser  or a  Permitted  Transferee  and in  such
                            denominations  as the  Purchaser  shall  request not
                            later  than  three (3)  Business  Days  prior to the
                            Closing  Date and  accompanied  by stock or  similar
                            powers  duly  endorsed  in  blank by the  Seller  or
                            accompanied by instruments of transfer duly executed
                            by the Seller;

                     (iii)  good   standing  or  equivalent   certificates   and
                            evidence  representing foreign  qualification of the
                            Company  Group as of a date no less  than  three (3)
                            Business Days prior to the Closing Date;

                     (iv)   duly   executed   counterparts   of   each   of  the
                            Distribution   Agreements  signed  by  each  of  the
                            parties thereto;

                     (v)    a receipt duly executed by the Seller  acknowledging
                            payment of the estimated Purchase Price;

                     (vi)   the  opinions  of White & Case  LLP,  the  Assistant
                            General  Counsel  of the  Seller  and the  Assistant
                            General  Counsel  of  the  Company  in the  form  of
                            EXHIBIT E, in each case dated as of the Closing Date
                            addressed to the Purchaser and its lenders;

                                      -17-
<PAGE>


                     (vii)  certificates   of  the   Secretary   of  the  Seller
                            attesting  to  the  incumbency  of its  officers  or
                            authorized  representatives executing this Agreement
                            and   the    Distribution    Agreements    and   the
                            authorization  of the  resolutions  authorizing  the
                            transactions contemplated hereby and thereby; and

                     (viii) the  resignations  of the officers and  directors of
                            the Company Group set forth on the Resignation List.

              SECTION 2.03. PURCHASE PRICE ADJUSTMENT.  The Purchase Price shall
be adjusted as follows:

              (a)    PRE-CLOSING  ADJUSTMENTS.  At least  five (5) days prior to
the Closing  Date,  Seller shall  prepare and deliver to the  Purchaser its good
faith  estimated  combined  pro  forma  balance  sheet of Pitney  Bowes  Capital
Services  (after  taking  into  effect  the  Internal  Restructuring,  the PBGFS
Contribution,  the Company  Contribution  and the PBGFS  Distribution) as of the
Closing,  prepared in accordance with the same accounting policies,  principles,
practices and methods used in preparing the Unaudited Balance Sheet as reflected
in  the  notes  thereto  and  the  Company  Audited  Financial  Statements  (the
"ESTIMATED  CLOSING  DATE  BALANCE  SHEET")  and a  statement  derived  from the
Estimated  Closing Date Balance  Sheet  setting  forth its good faith  estimated
calculation of the Estimated Closing Date Net Working Capital and the components
thereof (the "ESTIMATED  WORKING CAPITAL  STATEMENT").  If the Estimated Working
Capital Statement reflects an Estimated Working Capital Shortfall,  the Purchase
Price paid at Closing shall be reduced by the aggregate amount of such Estimated
Working Capital Shortfall.  If the Estimated Closing Date Balance Sheet reflects
an Estimated  Working Capital Surplus,  the Purchase Price paid at Closing shall
be increased by the aggregate amount of such Estimated  Working Capital Surplus.
During the  preparation  and  calculation of the Estimated  Closing Date Balance
Sheet and the Estimated Working Capital  Statement,  the Seller shall, and shall
cause its  Subsidiaries,  to afford  the  Purchaser  reasonable  opportunity  to
observe,  review and comment upon such  preparation and  calculation,  including
supporting  detail and during and after such preparation and calculation to have
reasonable  access  to any  documents,  schedules  or  work  papers  used in the
preparation  of the Estimated  Closing  Balance Sheet and the Estimated  Working
Capital Statement.

              (b)    POST-CLOSING  ADJUSTMENTS.  Promptly  but in any  event not
later than ninety (90) days  following  the Closing Date,  the  Purchaser  shall
prepare and deliver to the Seller (i) the Closing  Date  Balance  Sheet,  (ii) a
statement   derived  from  the  Closing  Date  Balance  Sheet  setting  forth  a
calculation  of the  Closing  Date  Net  Working  Capital  as of the date of the
Closing Date Balance Sheet (the "WORKING  CAPITAL  STATEMENT"  and together with
the Closing  Date  Balance  Sheet,  the  "CLOSING  FINANCIAL  STATEMENTS").  For
purposes  of  preparing  the Working  Capital  Statement,  (x) the Closing  Date
Balance Sheet shall be prepared in accordance with the same accounting policies,
principles,  practices and methods used in preparing the Unaudited Balance Sheet
as reflected in the notes thereto and the Company Audited Financial  Statements,
and (y) the Working  Capital  Statement shall be prepared in accordance with the
same  calculation  methodology  used in preparing the Estimated  Working Capital
Statement.

                                      -18-
<PAGE>


              (c)    DISPUTE  RESOLUTION  PROCEDURES.  Within ten (10)  Business
Days following the Seller's  receipt of the Closing  Financial  Statements,  the
Seller and its  independent  auditors  shall be  permitted to review the working
papers of the Purchaser relating to the Working Capital  Statement.  The Working
Capital  Statement  shall  become  final and  binding  upon the  Seller  and the
Purchaser on the eleventh (11th) Business Day following delivery thereof, unless
the Seller gives written  notice of its  disagreement  with the Working  Capital
Statement (a "NOTICE OF  DISAGREEMENT") to the Purchaser prior to such date. Any
Notice of Disagreement  shall (i) specify in reasonable detail the nature of any
disagreement  so  asserted  and  (ii)  only  include   disagreements   based  on
mathematical errors or based on the Working Capital Statement not being prepared
or the Working  Capital or the adjusted  purchase price not being  determined in
accordance  with  Section  2.03(b).  During  the seven (7)  Business  Day period
following the delivery of a Notice of Disagreement, the Seller and the Purchaser
shall seek in good faith to resolve  in writing  any  differences  that they may
have with  respect to the matters  specified in the Notice of  Disagreement  and
agree on a final  determination of the  disagreements set forth in the Notice of
Disagreement.  During such period,  the  Purchaser  and its auditors  shall have
access to the  working  papers of the Seller and, if  applicable,  the  Seller's
auditors' working papers prepared in connection with the Notice of Disagreement.
At the end of such seven (7) Business Day period,  the Seller and the  Purchaser
shall  submit  to a  nationally  recognized  independent  accounting  firm  (the
"INDEPENDENT  ACCOUNTING  FIRM") for  arbitration  of any and all  matters  that
remain in dispute and that were properly included in the Notice of Disagreement.
The  Independent  Accounting  Firm  shall be Ernst & Young,  or, if such firm is
unable or unwilling to act,  the first of the Big Four Public  Accounting  Firms
(on an  alphabetical  basis)  that is not  currently  serving as the  auditor of
either the Seller or the Purchaser shall be selected to resolve the dispute. The
Seller and the  Purchaser  shall  instruct the  Independent  Accounting  Firm to
render its reasoned  written decision as promptly as practicable but in no event
later than  fifteen  (15)  Business  Days  after  submission  of all  matters in
dispute.  The cost of any  arbitration  (including  the fees and expenses of the
Independent  Accounting Firm and reasonable  attorney fees and expenses pursuant
to this  Section  2.03(c)  shall be borne by the  Purchaser  and the  Seller  in
inverse  proportion as they may prevail in matters  resolved by the  Independent
Accounting Firm, which proportionate allocations shall also be determined by the
Independent  Accounting  Firm at the time the  determination  of the Independent
Accounting  Firm is rendered on the merits of the matters  submitted.  Except as
otherwise provided herein, the procedures for resolution of disputes  concerning
the Closing Financial  Statements shall (i) be final,  binding and conclusive on
the Seller and the Purchaser for purposes of the purchase price adjustments only
and for no other  purpose in  connection  with this  Agreement  so that when the
Closing Financial Statements are deemed final hereunder,  neither the Seller nor
the Purchaser will be entitled to subject the Closing Financial Statements,  any
resolution  by and  between  the Seller  and the  Purchaser  under this  Section
2.03(c) or the Independent  Accounting Firm's decision to any court or tribunal,
for purposes of the purchase  price  adjustments  and (ii) shall  constitute  an
arbitral  determination  upon  which a  judgment  may be  entered  by a court of
competent jurisdiction.

              (d)    POST-CLOSING SETTLEMENT.

              (i)    If it is  determined  that there is a Closing  Date Working
       Capital Shortfall in excess of the Estimated  Working Capital  Shortfall,
       the excess shall be paid by the Seller to the Purchaser  within three (3)
       Business Days  following the date that the Closing  Financial  Statements
       are final and binding in accordance with Section 2.03(c) (the

                                      -19-
<PAGE>


       "SETTLEMENT DATE") by wire transfer of immediately  available funds to an
       account designated in writing by the Purchaser; or

              (ii)   if it is  determined  that there is a Closing  Date Working
       Capital Shortfall less than the Estimated Working Capital Shortfall,  the
       difference shall be paid by the Purchaser to the Seller on the Settlement
       Date by wire  transfer  of  immediately  available  funds  to an  account
       designated in writing by Seller; or

              (iii)  if it is  determined  that there is a Closing  Date Working
       Capital Surplus in lieu of an Estimated  Working Capital  Shortfall,  the
       Closing Date  Working  Capital  Surplus plus the amount of any  Estimated
       Working  Capital  Shortfall  deducted from the Purchase Price pursuant to
       Section  2.03(a)  shall be paid by the  Purchaser  to the  Seller  on the
       Settlement  Date by wire transfer of  immediately  available  funds to an
       account designated in writing by the Seller; or

              (iv)   if it is  determined  that there is a Closing  Date Working
       Capital  Shortfall in lieu of an Estimated  Working Capital Surplus,  the
       Closing Date Working  Capital  Shortfall plus the amount of any Estimated
       Working  Capital  Surplus added to the Purchase Price pursuant to Section
       2.03(a)  shall be paid by the Seller to the  Purchaser on the  Settlement
       Date by wire  transfer  of  immediately  available  funds  to an  account
       designated in writing by the Purchaser; or

              (v)    if it is  determined  that there is a Closing  Date Working
       Capital  Surplus less than the Estimated  Working  Capital  Surplus,  the
       difference shall be paid by the Seller to the Purchaser on the Settlement
       Date by wire  transfer  of  immediately  available  funds  to an  account
       designated in writing by the Purchaser; or

              (vi)   if it is  determined  that there is a Closing  Date Working
       Capital Surplus in excess of the Estimated  Working Capital Surplus,  the
       difference shall be paid by the Purchaser to the Seller on the Settlement
       Date by wire  transfer  of  immediately  available  funds  to an  account
       designated in writing by the Seller.

              (e)    CERTAIN TRANSACTIONS.  SCHEDULE 2.03(E) hereto sets forth a
description of (i) certain identified leasing  transactions for which consent to
the Transactions is required  pursuant to its terms and (ii) the manner in which
such transactions  shall be treated pursuant to this Agreement in the event such
consent is not obtained.

                                  ARTICLE III

                  REPRESENTATIONS AND WARRANTIES OF THE SELLER

              The Seller hereby  represents and warrants to the Purchaser on the
date hereof, and on the Closing Date, as if made on such date, as follows:

              SECTION 3.01.  ORGANIZATION  AND STANDING.  (a) The Seller is duly
incorporated,  validly existing and in good standing under the laws of the State
of Delaware.

                                      -20-
<PAGE>


              (b)    The Company is duly  incorporated,  validly existing and in
good  standing  under the laws of the State of  Delaware  and has all  requisite
corporate  power and authority to own its  properties and assets and to carry on
the  Business  as it is now being  conducted  and as  currently  proposed  to be
conducted  immediately following the Closing. The Company is duly qualified as a
foreign  corporation  to  do  business,   and  is  in  good  standing,  in  each
jurisdiction where the character of its properties owned or leased or the nature
of its activities makes such qualification  necessary,  except where the failure
to be so qualified  would not have or would not reasonably be expected to have a
Material  Adverse  Effect.  The Seller has furnished to the  Purchaser  true and
correct  copies of the Company's  certificate  of  incorporation  and by-laws as
amended through the date of this Agreement and as in effect on the date hereof.

              (c)    Each member of the Company  Group  (other than the Company)
is an entity duly incorporated, formed or organized, validly existing and, where
applicable,   in  good  standing   under  the  laws  of  its   jurisdiction   of
incorporation,  formation  or  organization  and has  all  requisite  power  and
authority to own its properties and assets and to carry on its business as it is
presently  conducted  and as  currently  proposed by the Company to be conducted
immediately following the Closing, and each such member is qualified to transact
business,  and is in good standing, in each jurisdiction in which the properties
owned,  leased or operated by it or the nature of the  business  conducted by it
makes  such  qualification  necessary;  except in all cases as would not have or
would not reasonably be expected to have a Material  Adverse  Effect.  Except as
set forth on SCHEDULE  3.01(c)(i) all of the outstanding shares of Capital Stock
of each such  member set forth on  SCHEDULE  3.01(c)(iii)  are  lawfully  owned,
beneficially  and of record,  by the  Company and  validly  issued,  fully paid,
nonassessable   and  free  of  preemptive   rights  and  immediately  after  the
consummation of the PBGFS  Distribution  will be owned directly or indirectly by
the Company free and clear of all Liens and (ii) except as set forth on SCHEDULE
3.01(c)(ii),  there are no  subscriptions,  options,  warrants,  rights,  calls,
Contracts,   voting  trusts,  proxies  or  other  commitments,   understandings,
restrictions or arrangements relating to the issuance,  sale, voting or transfer
of any  shares  of  Capital  Stock  of any such  member  set  forth on  SCHEDULE
3.01(c)(iii),   including  any  right  of  conversion  or  exchange   under  any
outstanding security,  instrument or agreement. SCHEDULE 3.01(c)(iii) sets forth
a list of the  ownership  interests of the Company in each of the members of the
Company Group (other than the Company).

              SECTION  3.02.  OWNERSHIP  OF  SHARES;  CAPITALIZATION.   (a)  The
authorized  Capital Stock of the Company  consists of twenty  thousand  (20,000)
shares,  of which (i) ten thousand  (10,000)  shares are preferred stock with no
par value of which no shares are issued and  outstanding  and (ii) ten  thousand
(10,000)  shares are Common Stock,  of which four hundred and sixty (460) shares
of Common Stock are issued and outstanding and are owned by the Seller.

              (b)    The Seller is the lawful owner, beneficially and of record,
of each of the  Shares  which  have  been  validly  issued  and  fully  paid and
nonassessable,  free and clear of all Liens.  The  delivery to the  Purchaser of
each of the Shares  pursuant to this  Agreement  will  transfer to the Purchaser
good and valid title to all of the issued and  outstanding  capital stock of the
Company, free and clear of all Liens.

              (c)    Except as may  otherwise be provided for in this  Agreement
and the Transactions,  there are no outstanding  contractual  obligations of the
Company to repurchase,

                                      -21-
<PAGE>


redeem, or otherwise acquire any shares of Capital Stock of the Company.  Except
as may otherwise be provided for in this Agreement, the Distribution Agreements,
the  Transactions  and the  Internal  Restructuring,  there  are no  outstanding
contractual obligations of any of the Persons set forth on SCHEDULE 3.01(c)(iii)
to repurchase,  redeem, or otherwise acquire any shares of Capital Stock of such
Persons.

              (d)    Except as provided for in this Agreement,  there are (i) no
outstanding options, warrants,  agreements,  conversion rights, exchange rights,
preemptive rights or other rights (whether  contingent or not) to subscribe for,
purchase  or acquire  any  issued or  unissued  shares of  Capital  Stock of the
Company or options  that will be converted  into  options to purchase  shares of
Common Stock and (ii) no restrictions  upon, or Contracts or  understandings  of
the  Company  with  respect  to, the voting or transfer of any shares of Capital
Stock of the Company.

              SECTION 3.03.  AUTHORIZATION;  ENFORCEABILITY.  The Seller has the
power and authority to execute,  deliver and perform the terms and provisions of
this Agreement, and, as of the Closing Date will have taken all action necessary
to authorize the execution, delivery and performance by it of this Agreement and
each  of  the  Distribution   Agreements  and  to  consummate  the  transactions
contemplated  hereby and  thereby  and will have taken all action  necessary  to
cause the Company to authorize the execution,  delivery and performance by it of
each  of  the  Distribution   Agreements  and  to  consummate  the  transactions
contemplated  thereby. As of the Closing Date, no other corporate  proceeding on
the part of the Seller and the Company will be necessary for such authorization,
execution, delivery and consummation. The Seller has duly executed and delivered
this  Agreement  and, on the Closing Date,  the Seller and the Company will have
duly executed and delivered each of the Distribution Agreements.  This Agreement
constitutes,  and  each  of  the  Distribution  Agreements,  when  executed  and
delivered by the Seller and  assuming  that they  constitute a legal,  valid and
binding obligation of each other party thereto, will constitute,  a legal, valid
and  binding  obligation  of the  Seller,  enforceable  against  the  Seller  in
accordance  with  its  terms,  subject  to  bankruptcy,  insolvency,  fraudulent
transfer,  reorganization,  moratorium and similar laws of general applicability
relating to or affecting  creditors'  rights and to general  equity  principles.
Each of the Distribution Agreements, when executed and delivered by the Company,
will  constitute,  a  legal,  valid  and  binding  obligation  of  the  Company,
enforceable  against  the  Company  in  accordance  with its  terms,  subject to
bankruptcy,  insolvency,  fraudulent  transfer,  reorganization,  moratorium and
similar laws of general applicability relating to or affecting creditors' rights
and to general equity principles.

              SECTION  3.04.  NO  VIOLATION;   CONSENTS.   (a)  Subject  to  the
governmental  filings  and other  matters  referred to in Section  3.04(b),  the
execution,  delivery and performance by the Seller of this Agreement and each of
the  Distribution  Agreements,  the execution,  delivery and  performance by the
Company  of each of the  Distribution  Agreements  and the  consummation  of the
Transactions  do not and will not contravene any Applicable  Law, except for any
such  contravention  that would not have or would not  reasonably be expected to
have a  Material  Adverse  Effect.  Except as set forth on  SCHEDULE  3.04,  the
execution,  delivery and performance by the Seller of this Agreement and each of
the  Distribution  Agreements,  the execution,  delivery and  performance by the
Company  of each of the  Distribution  Agreements  and the  consummation  of the
Transactions (i) will not (A) violate,  result in a breach of,  constitute (with
or without  due notice or lapse of time or both) a default  (or give rise to any
right of termination, cancellation or

                                      -22-
<PAGE>


acceleration)  under,  or require  the prior  consent of any third party to, any
Contract  to which the  Company or any other  member of the  Company  Group is a
party or by which the Company or any other member of the Company  Group is bound
or to which  any of the  assets  of the  Business  will be  subject  immediately
following  the Closing or (B) result in the creation or  imposition  of any Lien
upon,  or any right of first  refusal,  first offer or option to purchase any of
the  assets of the  Business,  except,  in each case,  for any such  violations,
breaches,  defaults  or Liens  that  would not have or would not  reasonably  be
expected to have a Material  Adverse  Effect and (ii) will not conflict  with or
violate any provision of the  certificate  of  incorporation  or bylaws or other
organizational  documents  of the  Company  or any other  member of the  Company
Group.

              (b)    Except  as  set  forth  on   SCHEDULE   3.04  no   consent,
authorization  or order of, or filing or  registration  with,  any  Governmental
Authority or other Person  (including the stockholders of Seller) is required to
be obtained  or made by the  Seller,  the  Company,  or any of their  respective
Subsidiaries for the execution,  delivery and performance of this Agreement, any
of the Distribution  Agreements or the consummation of the Transactions,  except
where the failure to obtain such  consents,  authorizations  or orders,  or make
such  filings  or  registrations,  would  not have or would  not  reasonably  be
expected to have a Material Adverse Effect.

              SECTION  3.05.  FINANCIAL  STATEMENTS.  (a) The  Seller  has  made
available to the Purchaser the unaudited combined pro forma balance sheet (after
taking into effect the Internal Restructuring, the PBGFS Contribution, the PBGFS
Distribution and the Company Contribution) (the "UNAUDITED BALANCE SHEET") as of
December 31, 2005 and the statement of operations (the "UNAUDITED  STATEMENTS OF
OPERATIONS"),  and the cash flows (the  "UNAUDITED  CASH FLOWS") of Pitney Bowes
Capital Services (after taking into effect the Internal Restructuring, the PBGFS
Contribution,  the Company  Contribution and the PBGFS  Distribution) as of, and
for the year ended,  December 31, 2005,  copies of which are attached  hereto as
SCHEDULE  3.05(a) (the Unaudited  Statement of Operations and the Unaudited Cash
Flows,  together with the Unaudited  Balance  Sheet,  the  "UNAUDITED  FINANCIAL
STATEMENTS").   The  Unaudited  Financial   Statements  have  been  prepared  in
accordance with the Company's  accounting  policies,  principles,  practices and
methods consistently applied, which policies, principles,  practices and methods
are  consistent  with and comply with GAAP  (except as  otherwise  disclosed  in
footnote  1  thereto)  as of such  date  and  present  fairly,  in all  material
respects, the financial positions and the results of operation and cash flows of
Pitney Bowes  Capital  Services  (subject to the absence of footnotes  and other
presentation items and of normal year end adjustments).

              (b)    The Seller has made  available to the Purchaser the Company
Audited  Financial  Statements  (other than the Company 2005  Audited  Financial
Statements) and the PBG Partnership Audited Financial Statements (other than the
PBG Partnership 2005 Financial Statements),  copies of which are attached hereto
as SCHEDULE 3.05(b).  The Company Audited  Financial  Statements (other than the
Company 2005  Audited  Financial  Statements)  and the PBG  Partnership  Audited
Financial Statements (other than the PBG Partnership 2005 Financial  Statements)
have been,  and each of the  Company  2005  Audited  Financial  Statements,  PBG
Partnership  2005  Financial  Statements  and the  Company  2006  First  Quarter
Financial  Statements when delivered to the Purchaser shall have been,  prepared
in accordance with the Company's accounting policies, principles,  practices and
methods consistently applied, which policies, principles,  practices and methods
are  consistent  with and comply with GAAP  (except as  otherwise  disclosed  in
footnote 1 thereto) as of the  respective  dates of such  financial  statements.

                                      -23-
<PAGE>


The Company Audited  Financial  Statements  (other than the Company 2005 Audited
Financial  Statements) present fairly in all material respects,  and the Company
2005 Audited  Financial  Statements and the Company 2006 First Quarter Financial
Statements  when  delivered to the Purchaser will present fairly in all material
respects, the combined financial position and the results of operations and cash
flows of  Pitney  Bowes  Capital  Services  as of the  dates  of such  financial
statements. The PBG Partnership Audited Financial Statements (other than the PBG
Partnership 2005 Financial  Statements) present fairly in all material respects,
and  the  PBG  Partnership  2005  Financial  Statements  when  delivered  to the
Purchaser will present fairly in all material  respects,  the financial position
and the results of operations  and cash flows of the PBG  Partnership  as of the
dates of such financial  statements.  When  delivered to the Purchaser,  no line
item set forth in the Company 2005 Audited Financial Statements that is material
to the  operations or financial  position of the Company (each a "MATERIAL  LINE
ITEM") will differ in a material amount from the same line item in the Unaudited
Financial  Statements  for the  corresponding  periods.  To the knowledge of the
Company,  as of the  date  hereof,  no such  material  differences  between  the
Material  Line Items in the Company 2005 Audited  Financial  Statements  and the
Unaudited Financial Statements for the corresponding periods exist.

              (c)    Set  forth on  SCHEDULE  3.05(c)  hereto  is the  unaudited
combined pro forma statement of Operation  Expenses for the twelve-month  period
ending on December 31, 2005.  Also set forth on SCHEDULE  3.05(c)  hereto is the
unaudited  combined pro forma statement of Operation Expenses for the four-month
period  ending on April  30,  2006,  identifying  on a line by line  basis  each
category of expenses  incurred by the Pitney Bowes Capital  Services and setting
forth the assumptions,  exceptions and basis for deriving such amounts, prepared
in accordance  with GAAP on a basis  consistent  with the policies,  principles,
practices and methods set forth on SCHEDULE  3.05(c) (the  "ESTIMATED  OPERATION
EXPENSES  STATEMENT").  The  Estimated  Operation  Expenses  Statement  presents
fairly,  in all material  respects,  the combined  Operation  Expenses of Pitney
Bowes  Capital  Services  as of the date of such  Estimated  Operation  Expenses
Statement.  When delivered to the Purchaser pursuant to Section 5.14 hereof, the
quotient  of (i) each  line  item set forth in the  Closing  Operation  Expenses
Statement  DIVIDED BY (ii) four,  will not differ,  on a line by line basis,  by
more than 10% from the quotient of (i) the amount of the corresponding line item
set forth in the Estimated Operation Expenses Statement DIVIDED BY (ii) four.

              SECTION 3.06.  MATERIAL  ADVERSE CHANGE.  Since December 31, 2005,
except as set forth on SCHEDULE 3.06 or as contemplated by this Agreement and in
the  Distribution  Agreements,  including  the  Transactions  and  the  Internal
Restructuring,  (a) the  Company  Group  has  conducted  the  Businesses  in the
ordinary  course of business  consistent  with past  practices  in all  material
respects  and (b) nothing has  occurred  which has had, or would  reasonably  be
expected to have a Material Adverse Effect.

              SECTION 3.07.  ASSETS.  Except as set forth on SCHEDULE  3.07, the
Company and the other members of the Company Group own and have and, immediately
following the PBGFS Distribution, will own and have, good and valid title to, or
a valid leasehold interest in, and, immediately following the PBGFS Distribution
will have,  sufficient  rights to use, all of the  properties  and assets (real,
personal or mixed,  tangible or intangible)  reasonably necessary to conduct the
Business,  free and clear of all Liens,  except for Permitted  Liens, and all of
the assets  reflected  in the  Unaudited  Financial  Statements  and the Company
Audited  Financial  Statements,

                                      -24-
<PAGE>


other  than  those  assets  disposed  of in  the  ordinary  course  of  business
consistent with past practice.  This Section 3.07 does not apply to Intellectual
Property (for which Section 3.08 is applicable).  Following the  consummation of
the Transactions, Seller shall remain in the business of the extension of credit
to third parties.

              SECTION 3.08. INTELLECTUAL PROPERTY. (a) Immediately following the
PBGFS   Distribution,   in  accordance  with  the  Separation  and  Distribution
Agreement,  the  Transition  Services  Agreement and the  Intellectual  Property
Agreement,  the Company and its Subsidiaries  will have sufficient rights to use
the  Intellectual  Property  (other than  Company  Software  which is covered by
Section 3.08(i) hereof) that is reasonably  necessary to conduct the Business as
currently conducted and as currently contemplated to be conducted by the Company
and its Subsidiaries,  as applicable,  immediately after the PBGFS  Distribution
(the "COMPANY INTELLECTUAL PROPERTY").

              (b)    Nothing in this Agreement shall be construed as granting to
the Company any license,  whether  express or implied,  to use any  Intellectual
Property  owned or controlled by the Seller or conveying any other rights to the
Company and the other members of the Company Group in any Intellectual  Property
owned or controlled by the Seller.

              (c)    Since  January 1, 2005,  to the  knowledge  of the  Seller,
neither  the  Company  nor any of the other  members  of the  Company  Group has
received written notification that the conduct of the Business by the Company or
any of the other members of the Company Group has infringed upon or violated the
Intellectual  Property  rights of others in any  material  respects,  and to the
knowledge of the Seller no material Company Intellectual  Property is being used
or enforced by the Company or any other members of the Company Group in a manner
that would  reasonably be expected to result in a violation or  infringement  of
the Intellectual Property rights of any Person or the abandonment, cancellation,
or unenforceability of any material Company Intellectual Property.

              (d)    Except as set forth on SCHEDULE 3.08(d), the Company or any
other  member of the  Company  Group  will,  immediately  following  the Company
Contribution,  have good  title to each item of  Company  Intellectual  Property
material  to the  conduct of the  Business  that is owned by the  Company or any
other  member of the Company  Group,  after  giving  effect to the  transactions
contemplated by the Distribution  Agreements,  free and clear of any Liens other
than Permitted Liens.

              (e)    Since  January 1, 2005,  to the  knowledge  of the  Seller,
there have been no Suits decided,  settled,  pending, or, threatened against the
Business that involve claims concerning the validity, enforceability,  ownership
or license  or other  right to use any  Company  Intellectual  Property  or Data
comprising  Company  Intellectual  Property  that is owned by the Company or any
other member of the Company Group.

              (f)    The Company Group has timely made all filings, payments and
ownership  recordations  with the  appropriate  foreign  and  domestic  agencies
required to maintain in subsistence all material Company Intellectual Property.

                                      -25-
<PAGE>


              (g)    The  Company  Group has taken all  reasonable  measures  to
protect the secrecy and  confidentiality  of all material  trade secrets used or
held for use in the Business.

              (h)    Immediately following the PBGFS Distribution, in accordance
with  the  Separation  and  Distribution  Agreement,   the  Transition  Services
Agreement and the Intellectual  Property  Agreement,  the IT Systems (other than
computer  software which is covered by Section  3.08(i) hereof) that are used in
the Business are  adequate in all material  respects for their  intended use and
for the  operation  of the  Business,  as  currently  operated  and as currently
contemplated  to be  operated  by the  Company  in the  future,  and are in good
working condition (normal wear and tear expected); PROVIDED, that this provision
provides no warranty of non interruption of operation.

              (i)    Set  forth  on  SCHEDULE  3.08(i)  hereto  is a list of all
computer  software  programs  (the  "COMPANY  SOFTWARE")  that are  necessary to
conduct the Business as currently  conducted or as currently  contemplated to be
conducted  by the  Company  and the  other  members  of the  Company  Group,  as
applicable,  immediately after the PBGFS Distribution. The Company Software will
either (x) be owned by the  Company,  licensed  by a third  party  vendor to the
Company under an existing software license previously executed by the Company or
perpetually  licensed  by the  Seller  to the  Company  under  the  Intellectual
Property Agreement or (y) provided to the Company under the Transition  Services
Agreement.

              SECTION 3.09. EMPLOYEE BENEFIT PLANS. (a) SCHEDULE 3.09(a)(i) sets
forth a list of all Employee  Benefit Plans currently in effect.  The Seller has
delivered or made  available to  Purchaser  complete and correct  copies of each
Employee Benefit Plan, or written  summaries of any unwritten  material Employee
Benefit Plan.  Except as set forth on SCHEDULE  3.09(a)(ii) or as would not have
or would not  reasonably  be  expected  to have a Material  Adverse  Effect,  no
Employee Benefit Plan provides health,  life insurance or other welfare benefits
to retirees or other  terminated  employees  of the  Company  Group,  other than
continuation  coverage  required  by  COBRA.  Except  as set  forth on  SCHEDULE
3.09(a)(iii)  or as would not have or would not reasonably be expected to have a
Material  Adverse  Effect,  each  Employee  Benefit  Plan has been  operated  in
accordance with its terms, ERISA, the Code, and all other Applicable Laws. There
has been no "prohibited  transaction" within the meaning of Section 406 of ERISA
or Section 4975 of the Code involving any Employee  Benefit Plan except as would
not have or would not reasonably be expected to have a Material  Adverse Effect.
No  Employee  Benefit  Plan that is or was  subject to  Section  302 of ERISA or
Section 412 of the Code has incurred an accumulated funding deficiency,  whether
or not waived  except as would not have or would not  reasonably  be expected to
have a Material Adverse Effect. There are no pending or, to the knowledge of the
Seller,  threatened  investigations  or claims by the IRS,  Department of Labor,
Pension Benefit  Guaranty  Corporation or any other  governmental  agency or any
individual relating to any of the Employee Benefit Plans. Neither the Seller nor
any ERISA  Affiliate is required to contribute to any  "multiemployer  plan" (as
defined in Section  4001(a)(3) of ERISA) or has withdrawn from any multiemployer
plan where such  withdrawal  has  resulted  or would  result in any  "withdrawal
liability"  (within  the meaning of Section  4201 of ERISA) or "mass  withdrawal
liability"  (within the  meaning of PBGC  Regulation  4219.2)  that has not been
fully paid. Except as set forth on SCHEDULE  3.09(a)(iv) and except as would not
have or would not reasonably be expected to have a Material Adverse Effect,  the
consummation  of the  Transactions  contemplated  by  this  Agreement  will  not
increase any benefits or payments or result in the  acceleration  or creation of

                                      -26-
<PAGE>


any  rights  of any  Person  to  benefits  under any  Employee  Benefit  Plan or
agreement  (including  but not  limited to, the  acceleration  of the vesting or
exercisability  of any stock  options  or the  acceleration  of the  accrual  or
vesting of any benefits under any Employee Benefit Plan or agreement). Except as
set forth on SCHEDULE 3.09(a)(v) or as would not have or would not reasonably be
expected to have a Material Adverse Effect, no payment or benefit to be provided
to any  employee  of the  Company or any other  member of the  Company  Group in
connection  with  the  consummation  of the  transactions  contemplated  by this
Agreement is reasonably  expected to constitute  an "excess  parachute  payment"
within the meaning of Section 280G of the Code.

              SECTION 3.10.  EMPLOYEES AND LABOR RELATIONS.  Except as set forth
on  SCHEDULE  3.10,  as of the date  hereof,  neither  the Company nor any other
member  of the  Company  Group  is a  party  to  any  employment  or  collective
bargaining  agreement.  The Seller has made available to the Purchaser  complete
and  correct  copies  of the  agreements  set  forth on  SCHEDULE  3.10.  To the
knowledge of the Seller, no employee organizing efforts are pending with respect
to  nonunionized  employees  of the  Company or any other  member of the Company
Group.  There are no existing  or, to the  knowledge  of the Seller,  threatened
labor strikes,  work  stoppages or slowdowns  affecting the Company or any other
member of the  Company  Group.  There are no  complaints,  charges,  grievances,
unfair labor practices,  labor  arbitration  proceedings,  or claims against the
Company or any other member of the Company  Group pending or to the knowledge of
the Seller  threatened in writing to be brought or filed,  with any governmental
entity or arbitrator  based on, arising out of, in connection with, or otherwise
relating to, the  employment or  termination  of employment of any individual by
the Company or other member of the Company Group , in each case, that would have
or would reasonably be expected to have a Material  Adverse Effect.  The Company
Group  is in  compliance  with all  laws  governing  the  employment  of  labor,
including,  but not  limited  to,  all  such  laws  relating  to  wages,  hours,
collective bargaining, discrimination, civil rights, safety and health, workers'
compensation  and the  collection  and  payment  of  withholding  and/or  Social
Security taxes and similar taxes,  except where  noncompliance would not have or
would not  reasonably be expected to have a Material  Adverse  Effect.  No event
giving  rise to the  requirement  that  notice be given to any  employee  of the
Company or any other member of the Company Group under the Worker Adjustment and
Retraining Notification Act or under any similar state or local law has occurred
or been announced  during the ninety  (90)-day period ending on the date of this
Agreement or any longer period required by any local legislation.

              SECTION 3.11. NO UNDISCLOSED MATERIAL  LIABILITIES.  Except as set
forth on SCHEDULE  3.11,  there are no  liabilities  of the Company Group (after
taking into  effect the  Internal  Restructuring,  the PBGFS  Contribution,  the
Company Contribution and the PBGFS Distribution) of any kind whatsoever, whether
accrued, contingent, absolute, determined, determinable or otherwise, other than
(a)  liabilities  disclosed,  reflected  or  reserved  against in the  Unaudited
Balance Sheet or the Company Audited Financial  Statements,  as applicable,  (b)
liabilities  incurred in a manner  consistent  with past practice since December
31, 2005,  (c)  liabilities  arising under this  Agreement and the  Distribution
Agreements,  (d)  liabilities  to be  retained or assumed by the Seller and from
which  the  Company  shall be  released,  in  accordance  with the  Distribution
Agreements, (e) Tax liabilities and (f) such other liabilities as would not have
or  would  not  reasonably  be  expected  to have a  material  negative  impact,
individually or in the aggregate,  on the Company Group.  Except as set forth on
SCHEDULE 3.11, there are no franchise,  construction,

                                      -27-
<PAGE>


fidelity,  performance and other bonds,  guaranties in lieu of bonds and letters
of  credit  posted  by the  Seller,  the  Company  or any  of  their  respective
Affiliates in connection  with the Business and none would be required to be put
in  place  or  replaced,  if at all,  as a  result  of the  consummation  of the
Transactions,  the Internal Restructuring,  the PBGFS Contribution,  the Company
Contribution or the PBGFS Distribution.

              SECTION 3.12.  COMPLIANCE  WITH LAWS. The Business and the Company
Group are in  compliance  in all material  respects  with all  Applicable  Laws,
except  for (a)  instances  of  noncompliance  that  have not had and  would not
reasonably be expected to have a Material  Adverse  Effect,  (b) compliance with
Environmental Laws (as to which certain  representations and warranties are made
pursuant to Section 3.15) and (c) compliance  with Tax laws (as to which certain
representations and warranties are made pursuant to Section 3.17).

              SECTION 3.13. LITIGATION.  Except as disclosed on SCHEDULE 3.13 or
with respect to Taxes, there are no (a) outstanding Suits or Governmental Orders
against or affecting the Company or any other member of the Company  Group,  (b)
proceedings  pending or, to the knowledge of the Seller,  threatened  against or
affecting the Business,  the Company or any other member of the Company Group or
(c)  investigations by any Governmental  Authority that are, to the knowledge of
the Seller, pending or threatened against or affecting the Business, the Company
or any other member of the Company Group that, individually or in the aggregate,
in any case  would  have or would  reasonably  be  expected  to have a  Material
Adverse Effect.

              SECTION 3.14. COMPLIANCE WITH CONSTITUENT  DOCUMENTS.  Neither the
Company nor any other  member of the Company  Group is in breach or violation of
or in default in the performance or observance of any material term or provision
of,  and no event has  occurred  which,  with lapse of time or action by a third
party,  would  result in a material  default  under the  respective  articles or
certificate of incorporation,  bylaws or similar  organizational  instruments of
such entities.

              SECTION  3.15.  ENVIRONMENTAL  MATTERS.  Except  as set  forth  on
SCHEDULE  3.15 and except as would not have or would not  reasonably be expected
to have a Material  Adverse  Effect,  (a) the Business and the operations of the
Company are conducted in material  compliance with all applicable  Environmental
Laws,  (b) the  Company has  obtained  and is in  material  compliance  with all
material   Permits  or   authorizations   that  are  required  under  applicable
Environmental  Laws to operate the facilities,  assets and the Business,  (c) no
Environmental  Claims have been asserted against the Company or any other member
of the  Company  Group,  nor does the  Seller  have  knowledge  or notice of any
threatened  or pending  Environmental  Claim  against  the  Company or any other
member of the Company  Group and (d) there has been no Release (i) at any of the
properties owned or operated by the Company or other member of the Company Group
or (ii) as a result of any activity of the Business.

              SECTION 3.16. REAL PROPERTY.  (a) SCHEDULE 3.16 contains a list of
each interest in Real Property relating to the Business that is (i) owned by the
Company  and  describing  the type of interest  therein  held by the Company and
whether the Company  leases such owned Real Property and (ii) leased,  subleased
or  otherwise  occupied  or  utilized  by the  Company,  as  lessee,  sublessee,
franchisee  or  licensee,  as of the  date  hereof  and  describing  the type of
interest therein

                                      -28-
<PAGE>


held by the Company (a "COMPANY  LEASE")  except,  in each case, to interests in
Real Property in connection with a Financing.

              (b)    The  Real  Property  described  in  clause  (a)(i)  of this
Section  3.16 is owned by the Company,  free and clear of all Liens,  except for
Permitted Liens.

              (c)    The Company's interest under each Company Lease is free and
clear of all Liens, except for Permitted Liens.

              SECTION 3.17.  TAXES.  Each member of the Company Group has timely
filed or caused to be timely filed all material Tax Returns required to be filed
under the Code, or applicable state, local or foreign Tax laws. To the knowledge
of the Seller, all Taxes required to be paid with respect to the periods covered
by such Tax Returns have been paid in full,  except for Taxes the  nonpayment of
which are not, in the aggregate, material. Except as set forth on SCHEDULE 3.17,
(a) no Tax Liens have been filed and no claims are being  asserted  with respect
to any Taxes of the  Company,  except for Liens and claims (i)  relating  to the
Specified Leases or (ii) which are not, in the aggregate,  material,  (b) to the
knowledge  of the Seller,  no notice of lien with the meaning  given  thereto in
Section  6323(f) of the Code nor any notice of assessment  under Section 6201 of
the Code has been filed by the IRS with  respect to the Company or any member of
the Company Group,  (c) no Tax examination or audit of any member of the Company
Group is currently being conducted by any taxing authority which  examination or
audit is reasonably  expected to result in an additional  asserted Tax liability
in excess of $1,000,000,  (d) each member of the Company Group has complied with
all  Applicable  Laws,  rules  and  regulations  relating  to  the  payment  and
withholding  of  material  Taxes,  (e) except for the tax  indemnity  provisions
contained in the Financing Documents,  each member of the Company Group is not a
party to or otherwise bound by any agreement or understanding under which it has
obligations  for the  allocation and sharing of material Taxes that will survive
the Closing  (which for the avoidance of doubt,  does not include  agreements or
understandings  that do not relate  solely or  primarily to Tax Matters but that
include tax  indemnities  or in which payment of non-Tax items are adjusted with
reference  to Taxes),  (f) each member of the Company  Group is not  required to
include in income any adjustment  pursuant to Section 481(a) of the Code and (g)
neither the Company nor any other member of the Company  Group is a party to any
lease made pursuant to Section  168(f)(8) of the Internal  Revenue Code of 1954,
as amended.

              SECTION 3.18.  FINANCINGS.  (a) SCHEDULE 3.18(a) sets forth a list
of all  Large  Ticket  Financings,  including  the  name  of the  Obligor  and a
statement  of payments due or  scheduled  to become due in  accordance  with the
terms  of the  leases  related  to  each  Financing.  Each  Financing  has  been
administered substantially in accordance with its Financing Documents.

              (b)    Except as set forth on SCHEDULE  3.18(b),  to the knowledge
of the Seller,  no material  default or material  event of default that has been
declared  by the  Company  as  such  (as  defined  in the  applicable  Financing
Documents  relating to the Financings) is continuing (i) relating to any payment
obligations  with respect to any Financing or (ii)  relating to any  obligations
other than payment obligations with respect to such Financing.  To the knowledge
of the  Seller,  no valid  offset,  defenses  or  counterclaims  may be asserted
against the Company or the other members of the Company Group,  the Purchaser or
its assigns with respect to any Financing

                                      -29-
<PAGE>


and no Suit or any legal proceeding,  administrative,  judicial or otherwise has
been brought by or against the Company or the other members of the Company Group
in connection therewith.

              (c)    Each  Financing  Document to which the Company or any other
member of the  Company  Group is a party (i)  constitutes  the legal,  valid and
binding  obligation of the Company or such member,  as  applicable,  and, to the
knowledge of the Seller,  each Obligor  thereunder;  and (ii) is  enforceable in
accordance  with  its  respective  terms,  subject  to  bankruptcy,  insolvency,
fraudulent  transfer,  reorganization,  moratorium  and similar  laws of general
applicability  relating to or affecting  creditors' rights and to general equity
principles.  There are no oral  agreements  or  understandings,  which modify or
amend the terms of the Financing Documents.

              (d)    With respect to each  Financing,  either (i) the Company or
another member of the Company Group or any of their respective Affiliates is the
legal title owner of the property financed  thereunder and in the case of assets
held in trust, is the beneficial owner, and has good title to such property free
and clear of all Liens  other than  Permitted  Liens and other  Liens  permitted
under the  Financings  Documents  relating  to such  Financing,  subject  to the
purchase  options of the Obligors  under the applicable  Financing  Documents or
(ii) the Company or another  member of the  Company  Group has filed all Uniform
Commercial Code financing statements  (including all amendments) with respect to
the Financings as are necessary to create a first priority  security interest in
such property.

              (e)    In connection with each Financing,  neither the Company nor
the  other  members  of the  Company  Group  have  made any  representations  or
warranties  to the  Obligors or to third party  purchasers  with  respect to any
manufacturer warranties, including product performance standards of any financed
property.

              (f)    Neither  the  Company  nor any other  member of the Company
Group has maintenance,  product liability,  manufacturer  warranty, or equipment
servicing  obligations  in  connection  with the  property  financed  under  any
Financing,  or pursuant to any Financing  Documents  relating  thereto,  in each
case, during the term of such Financing.

              (g)    Except as set forth on SCHEDULE  3.18(g),  to the knowledge
of the  Seller,  no  Obligor  is the  subject of any  bankruptcy  or  insolvency
proceeding.

              SECTION  3.19.  CONTRACTS.   (a)  SCHEDULE  3.19  sets  forth  the
following  categories of Contracts  (other than Financing  Documents)  which are
material to the Company and the other members of the Company  Group,  taken as a
whole,  which  solely  relate to the Business and to which the Company or any of
the other members of the Company  Group is a party or by which the Company,  any
of the other members of the Company Group, or any of their respective  assets is
in any way affected or bound,  including all material amendments and supplements
thereto and modifications thereof ("MATERIAL CONTRACTS"):

              (i)    any Contract (A) involving the obligation of the Company to
       purchase products or services pursuant to which the aggregate of payments
       to become due from the  Company is equal to or  exceeds  $750,000  in any
       calendar year or $1,000,000 in the aggregate, and which is not terminable
       on ninety (90)  calendar  days' or less notice or (B)

                                      -30-
<PAGE>


       any Contract  which  involves the obligation for a payment to be made, or
       expected to be made,  to the Company in excess of $750,000 or pursuant to
       which  payments have been made to the Company during the six months prior
       to the date hereof in excess of $750,000,  either  pursuant to a Contract
       with a customer of the Company or pursuant to any other Contract;

              (ii)   (A) any  finder,  promotion,  sales,  advertising,  agency,
       consultant,  lobbying,  franchise  or similar  Contract  or (B) any other
       Contract, in each case, requiring the payment of any commissions or other
       similar  payments or commitments by the Company in excess of $750,000 per
       calendar year;

              (iii)  any  Contract to purchase or  otherwise  acquire or sell or
       otherwise  dispose of any interest in Real Property for  consideration in
       excess of $750,000;

              (iv)   any commitment of the Company to make a capital expenditure
       or to purchase a capital asset of at least $750,000;

              (v)    any Contract that contains a covenant not to compete or any
       other agreement or obligation  that materially  limits or will materially
       limit the Company and  following  consummation  of the  Transactions  the
       Purchaser, from engaging in any business related to the Industry;

              (vi)   any Lease or similar  agreement  under which the Company is
       the  lessee,  or  pursuant  to which  the  Company  holds  or  uses,  any
       machinery,  equipment,  vehicle or other tangible personal property owned
       by any third Person for an annual rent in excess of $250,000;

              (vii)  any  Contract  establishing  or relating to a  partnership,
       joint  venture,  strategic  alliance,  vendor  financing  arrangement  or
       program or exclusivity, consortium or other similar arrangement;

              (viii) any asset purchase  agreements,  stock purchase  agreements
       and other  acquisition  or divestiture  agreements and similar  Contracts
       relating to the sale,  lease or disposal of any  material  properties  or
       assets of the Company, for consideration in excess of $500,000;

              (ix)   any  Contract   relating  to   Indebtedness  in  excess  of
       $750,000;

              (x)    any Contract under which Company has directly or indirectly
       guaranteed any liabilities in excess of $750,000;

              (xi)   any outstanding or pending  customer bid or proposal or any
       outstanding  customer  option  relating  to any  Contract  in  excess  of
       $500,000;

              (xii)  any Contract  containing any "change in control"  provision
       (or similar provisions);

                                      -31-
<PAGE>


              (xiii) any  Contract  relating to any Suit or  Governmental  Order
       which involves any unpaid liability of the Company in excess of $750,000;

              (xiv)  (A) any  employment  Contract or (B) any agreement with any
       executive  officer or other key employee of the Company,  including  such
       Contracts,  the benefits of which are  contingent,  or the terms of which
       are materially  altered,  upon the occurrence of a transaction  involving
       the Company or of the  consummation of the  Transactions  contemplated by
       this  Agreement,  providing  any  compensation  guarantee  of  more  than
       $100,000 per calendar year;

              (xv)   any  Contract  granting  a right to first  refusal or first
       negotiation  with respect to the sale of any portion of the equity of the
       Company or of all or any material portion of Company's assets  (including
       the equity interests in any other member of the Company Group);

              (xvi)  any  Contract   under  which  the  Company  has  agreed  to
       indemnify  any  third  Person  with  respect  to,  or to  share,  the Tax
       liability  of any third  Person other than  Contracts  with  suppliers or
       customers  in the  ordinary  course of  business  in which no payments on
       account of Tax  liabilities  have been made or incurred or are reasonably
       expected to be made or incurred; and

              (xvii) all  commitments  and  agreements  to enter into any of the
       foregoing.

              For  purposes  of this  Section  3.19(a),  all  references  to the
Company  shall  include the Company  and any other  member of the Company  Group
unless the context otherwise provides.

              (b)    Except  as  set  forth  on  SCHEDULE   3.19,  all  Material
       Contracts are legally valid and binding obligations of the Company or any
       other  member  of the  Company  Group,  as the case may be,  and,  to the
       knowledge of the Seller,  represent valid and binding  obligations of the
       other  respective  parties  thereto,  subject to bankruptcy,  insolvency,
       fraudulent  transfer,  reorganization,  moratorium  and  similar  laws of
       general  applicability  relating to or affecting creditors' rights and to
       general  equity  principles.  Except  as set forth on  SCHEDULE  3.19 and
       except as would not have or not reasonably be expected to have a Material
       Adverse  Effect,  there are no defaults or breaches by the Company or any
       other member of the Company Group,  as the case may be,  thereunder,  and
       there are no defaults or breaches by other parties thereunder.

              SECTION 3.20. CERTAIN BUSINESS PRACTICES. None of the Company, any
other member of the Company  Group nor, to the  knowledge of the Seller,  any of
their respective directors,  officers,  agents or employees (in their capacities
as  such)  have  (a)  used  any  funds  for   unlawful   contributions,   gifts,
entertainment or other unlawful expenses  relating to political  activity or (b)
made any  unlawful  payment to any foreign or domestic  government  officials or
employees  or to any  foreign or  domestic  political  parties or  campaigns  or
violated any provision of the Foreign Corrupt Practices Act of 1977, as amended.

              SECTION  3.21.  INSURANCE.  To the  knowledge  of the Seller,  all
material  insurance  policies  maintained by, or for the benefit of, the Company
Group in connection with the Business: (a) are in full force and effect, (b) are
sufficient for compliance by the Company

                                      -32-
<PAGE>


Group with all requirements of Applicable Law, and (c) are valid and outstanding
policies and  enforceable  against the insurer.  To the knowledge of the Seller,
each of the Company  Group has complied in all material  respects with the terms
of such policies.

              SECTION  3.22.  LICENSES AND PERMITS;  GOVERNMENTAL  NOTICES.  (a)
SCHEDULE  3.22  sets  forth  a list  of all  material  Permits  of or  with  any
Governmental  Authority,  which are held by the Company  Group and relate to the
Business or otherwise affect any Real Property.  The Company Group possesses all
Permits that are necessary  under  Applicable Law to conduct the Business and to
own and operate their  respective  assets and such Permits are valid and in full
force and effect,  except where the failure to have such Permits  would not have
or would not be reasonably likely to have a Material Adverse Effect. No material
defaults or violations exist or have been recorded in respect of any such Permit
of the Company Group. There are no proceedings  pending, or, to the knowledge of
the Seller, threatened, seeking the revocation, limitation or non-renewal of any
such material Permits.

              (b)    Since  December 31,  2003,  except as set forth on SCHEDULE
3.22,  none of the  Company  and the other  members  of the  Company  Group have
received any written  notice  regarding,  and have not been made a party to, any
proceeding  brought by any  Governmental  Authority  alleging  that (i) any such
Person is in, or may be in,  violation in any material respect of any Applicable
Law or  Governmental  Order,  (ii) any such Person  must change in any  material
respect  any  of its  business  practices  to  remain  in  compliance  with  any
Applicable Law or Governmental Order, (iii) any such Person has failed to obtain
any  material  Permit  required for the conduct of its business or (iv) any such
Person is in default under or in violation of any material Permit.

              SECTION 3.23. AFFILIATED  TRANSACTIONS.  Immediately following the
Closing,  there will be no material  Contracts by and between the Company and/or
any other member of the Company  Group,  or officers or directors of the Company
(and/or any family members of such officers or directors),  on the one hand, and
Seller and/or its  Subsidiaries,  or officers or directors of Seller (and/or any
family members of such officers or directors), on the other hand, other than the
Distribution  Agreements  and any and all Contracts  that relate to the Internal
Restructuring,  the PBGFS Contribution,  the Company  Contribution and the PBGFS
Distribution  and survive the Closing in accordance  with the  provisions of the
Separation and Distribution Agreement.

              SECTION 3.24. VOTE REQUIRED.  The affirmative  vote of the holders
of a majority of the  outstanding  shares of Capital Stock of the Company is the
only vote of the holders of any class or series of the  Company's  Capital Stock
or the Seller's Capital Stock necessary to approve the Transactions contemplated
hereby.

              SECTION 3.25. REPRESENTATIONS AND WARRANTIES.

              (a)    Except for the representations and warranties expressly set
forth in this Agreement, the Purchaser acknowledges, for itself and on behalf of
its  Representatives,  that neither the Seller nor any of its Representatives or
any other Person makes any other express or implied  representation  or warranty
with respect to the Company,  the  Business,  the  Transactions,  the  documents
related hereto or otherwise or with respect to any other information provided to
the Purchaser or any of its Representatives, whether on behalf of the Company or
such other

                                      -33-
<PAGE>


Persons,   including,  as  to  the  operation,   probable  success,   prospects,
projections or profitability of the Company or the Business.

              (b)    During the period  between  the date hereof and the Closing
Date, the Seller shall, from time to time, amend or add Schedules,  to make such
additions to, or modifications  of such Schedules,  as are necessary to make the
information  set forth  therein  true,  accurate  and  complete in all  material
respects on the date of this Agreement and the Closing Date, as applicable. Such
amendments,  additions or  modifications  shall be specified in a written notice
delivered to the  Purchaser  (an "UPDATE  NOTICE") no less than 15 calendar days
prior to the  anticipated  Closing  Date,  which shall  identify  the  Schedules
affected by such amendments, additions or modifications and enclose such amended
Schedules.

              (c)    The Purchaser  shall,  within fifteen (15) calendar days of
the delivery of the Update  Notice,  have the right to terminate  this Agreement
pursuant to the terms and conditions of Section 10.03(a)(vii) in connection with
any breach or  violation  of any  representation  or warranty on the part of the
Seller that  occurred on or prior to the delivery  date of the Update Notice and
meets the  standard set forth in Sections  7.02(a) and follows the  procedure in
Section  10.03(a)(vii),  as a result of the information disclosed in such Update
Notice.  If the Purchaser  does not exercise such  termination  right within the
fifteen (15)  day-period,  the  Purchaser  shall be deemed to waive its right to
terminate this Agreement and such Schedules shall thereupon be deemed amended to
reflect such amendments,  additions and modifications and the truth and accuracy
of the  representations and warranties of the Seller contained in this Agreement
solely for  determining  whether  any breach  thereof  shall have  occurred  for
purposes of 7.02(a),  shall be determined  by reference to such  Schedules as so
amended; PROVIDED, that such amendments, additions or modifications shall not be
deemed to cure any breach for any other  purpose  of this  Agreement,  including
without limitation Article VIII.

                                   ARTICLE IV

                 REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

              The Purchaser hereby  represents and warrants to the Seller on the
date hereof and on the Closing Date, as follows:

              SECTION 4.01.  ORGANIZATION;  AUTHORIZATION;  ENFORCEABILITY.  The
Purchaser  is  duly  organized,  validly existing and in good standing under the
laws  of  the State of Delaware and has all requisite power and authority to own
its  properties  and  assets  and  to  carry  on its business as it is now being
conducted  and  as  currently proposed to be conducted immediately following the
Closing.  The  Purchaser  has  the  power  to  execute,  deliver and perform its
obligations under the Financing Commitment Letter, the Equity Commitment Letter,
the  Employee  Benefits  Agreement  (collectively,  the  "PURCHASER  TRANSACTION
DOCUMENTS")  and  this Agreement and has taken all necessary action to authorize
the  execution,  delivery  and  performance  by  it  of  this  Agreement and the
Purchaser  Transaction  Documents  and  to consummate the Transactions. No other
proceedings  on  the part of the Purchaser are necessary for such authorization,
execution,  delivery  and  consummation.  The  Purchaser  has  duly executed and
delivered  this  Agreement,  the  Financing  Commitment  Letter  and  the Equity
Commitment

                                      -34-
<PAGE>


Letter.  Each  of this Agreement, the Employee Benefits Agreement, the Financing
Commitment  Letter  and  the Equity Commitment Letter constitutes a legal, valid
and  binding  obligation  of the Purchaser, enforceable against the Purchaser in
accordance  with  its  terms,  subject  to  bankruptcy,  insolvency,  fraudulent
transfer,  reorganization,  moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity principles.

              SECTION 4.02. PURCHASER AS A CORPORATION AND U.S. CITIZEN. (a) The
Purchaser is a corporation for all U.S. federal tax purposes that is eligible to
make an election under Section 338(h)(10) of the Code.

              (b)    The Purchaser is a U.S.  citizen for all purposes  required
with  respect  to the  transactions  included  in the  Financing,  including  as
required under the Federal  Aviation Act of 1958, as amended,  the Jones Act and
other  Applicable  Laws  governing the ownership or use of the assets subject to
such Financings.

              SECTION 4.03. PURCHASE FOR INVESTMENT.  The Purchaser is acquiring
the Shares to be acquired  hereunder  for its own account (or for accounts  over
which it or its Affiliates exercises investment  authority),  for investment and
not with a view to the  resale  or  distribution  thereof  in  violation  of any
securities law.

              SECTION  4.04.  NO  VIOLATION;   CONSENTS.   (a)  Subject  to  the
governmental  filings  and other  matters  referred to in Section  4.04(b),  the
execution,  delivery  and  performance  by the  Purchaser  of each  of the  this
Agreement and the Purchaser  Transaction  Documents and the  consummation by the
Purchaser of the Transactions do not and will not contravene any Applicable Law,
except for any such  contravention  that would not have and would not reasonably
be expected to have a material adverse effect on the ability of the Purchaser to
timely  perform  its   obligations   under  this  Agreement  and  the  Purchaser
Transaction Documents. The execution,  delivery and performance by the Purchaser
of this Agreement and the Purchaser  Transaction  Documents and the consummation
of the  Transactions  (i)  will  not  (A)  violate,  result  in a  breach  of or
constitute  (with or without  due notice or lapse of time or both) a default (or
give rise to any right of termination,  cancellation or acceleration)  under any
Contract to which the  Purchaser is party or by which the  Purchaser is bound or
to  which  any of its  assets  is  subject  or (B)  result  in the  creation  or
imposition of any Lien upon any of the assets of the  Purchaser,  except for any
such  violations,  breaches,  defaults or Liens that would not have or would not
reasonably be expected to have a material  adverse  effect on the ability of the
Purchaser to timely perform its  obligations  under this Agreement and (ii) will
not conflict  with or violate any provision of the  certificate  of formation or
operating  agreement (or similar agreement) or other governing  documents of the
Purchaser.

              (b)    No  consent,  authorization  or  order  of,  or  filing  or
registration with, any Governmental  Authority or other Person is required to be
obtained or made by the Purchaser for the execution, delivery and performance of
any  of  this  Agreement  and  the  Purchaser   Transaction   Documents  or  the
consummation of any of the Transactions, except where the failure to obtain such
consents, authorizations or orders, or make such filings or registrations, would
not have or would not  reasonably be expected to have a material  adverse effect
on the ability of the  Purchaser to timely  perform its  obligations  under this
Agreement and the Purchaser Transaction Documents.

                                      -35-
<PAGE>


              SECTION 4.05.  LITIGATION.  There are no (a) outstanding  Suits or
Governmental   Orders   against  or  affecting  the  Purchaser  or  any  of  its
Subsidiaries,  (b)  proceedings  pending or, to the knowledge of the  Purchaser,
threatened  against or affecting the Purchaser or any of its Subsidiaries or (c)
investigations  by any Governmental  Authority that are, to the knowledge of the
Purchaser,  pending or  threatened  against or affecting the Purchaser or any of
its Subsidiaries that, in any case would have or would reasonably be expected to
have a material adverse effect on the ability of the Purchaser to timely perform
its obligations under this Agreement.

              SECTION 4.06. FINANCING.  The Purchaser has obtained the Financing
Commitment  Letter which,  on the terms and subject to the  conditions  thereof,
provides all funds necessary, together with the funds available to the Purchaser
under the Equity Commitment  Letter, to acquire all of the Shares and to pay any
other amount  required to  consummate  the  Transactions.  A true,  complete and
correct copy of the Financing  Commitment  Letter has been  furnished to Seller.
The  financing  required to consummate  the  transactions  contemplated  by this
Agreement  is referred to in this  Agreement  collectively  as the  "TRANSACTION
FINANCING."

              SECTION 4.07.  ANTITRUST.  The  Purchaser  has  determined in good
faith, in accordance with 16 C.F.R. ss. 801.10(c)(3), that the fair market value
of the assets held by the Company (together with all entities  controlled by the
Company) that are not exempt under Section  7a(c)(1) of the HSR Act or 16 C.F.R.
Sections  802.1 or 802.4 at the time of the  Closing  (taking  into  account the
Internal Restructuring, the PBGFS Contribution, the Company Contribution and the
PBGFS  Distribution)  does not exceed  $56.7  million.  For the purposes of this
Section  4.07,  "controlled  by"  shall  have the same  meaning  as in 16 C.F.R.
Section 801.1(b).

              SECTION  4.08.  REPRESENTATIONS  AND  WARRANTIES.  Except  for the
representations and warranties expressly set forth in this Agreement, the Seller
acknowledges, for itself and on behalf of its Representatives,  that neither the
Purchaser  nor any of its  Representatives  or any other  Person makes any other
express or implied representation or warranty with respect to the Purchaser, the
Transactions,  the documents  related hereto or otherwise or with respect to any
other information provided to the Seller or any of its Representatives,  whether
on behalf of the Purchaser or such other Persons.

                                   ARTICLE V

                             COVENANTS OF THE SELLER

              SECTION 5.01. COMPLIANCE WITH CONDITIONS;  COMMERCIALLY REASONABLE
EFFORTS.  The Seller shall use all commercially  reasonable efforts to cause all
conditions  precedent to the  obligations  of the Seller and the Purchaser to be
satisfied.  Upon the terms and subject to the conditions of this Agreement,  the
Seller shall use all  commercially  reasonable  efforts to take,  or cause to be
taken, all action, and to do, or cause to be done, all things necessary,  proper
or advisable  consistent with Applicable Law to consummate and make effective in
the most  expeditious  manner  practicable  the  Transactions  and the  Internal
Restructuring  in accordance with the terms of this Agreement and the Separation
and Distribution Agreement.

                                      -36-
<PAGE>


              SECTION 5.02. ACCESS TO BOOKS AND RECORDS

              (a)    The Seller  shall and shall cause the Company to (i) afford
to the Purchaser and its  Representatives,  under the supervision of the Seller,
reasonable  access during normal  business hours  throughout the period prior to
the  Closing  Date (or the earlier  termination  of this  Agreement  pursuant to
Section 10.03) to (A) the  properties,  books,  Contracts and records related to
the  Business,  (B)  such  employees  of the  members  of the  Company  Group as
reasonably agreed upon by the Seller and the Purchaser and (C) the lessees named
on SCHEDULE 5.02 hereto, and, during such period,  shall, upon request,  furnish
as soon  as  reasonably  practicable  to the  Purchaser  all  other  information
concerning the Business as the Purchaser may reasonably request;  PROVIDED, that
(x) such  access  shall not  interfere  with the  day-to-day  operations  of the
Company Group and (y) no  investigation  or receipt of  information  pursuant to
this Section 5.02 shall affect any  representation or warranty of the Company or
the  conditions  to the  obligations  of the  Purchaser  and (ii) provide to the
Purchaser  copies  of  the  execution  copies  of  the  Distribution  Agreements
concurrently  with the  execution  thereof  and in no event  later than five (5)
Business Days before the Closing Date.

              (b)    All requests pursuant to this Section 5.02 shall be made to
the Persons  designated  from time to time by the Seller for this  purpose,  who
shall initially be the individuals listed on SCHEDULE 5.02.

              SECTION  5.03.  CONSENTS  AND  APPROVALS.  Except  as set forth on
SCHEDULE  5.03,  the Seller  shall,  and shall cause the Company to, (a) use all
commercially  reasonable  efforts to obtain  all  necessary  consents,  waivers,
authorizations  and approvals of all  Governmental  Authorities and of all other
Persons  required in connection with the execution,  delivery and performance of
this Agreement or the  consummation  of the  Transactions  by the Seller and (b)
shall diligently assist and cooperate with the Purchaser in preparing and filing
all  documents  required to be  submitted by the  Purchaser to any  Governmental
Authority in connection  with the issuances  pursuant to this  Agreement  (which
assistance and cooperation  shall include timely furnishing to the Purchaser all
information   concerning  the  Company  Group  that  counsel  to  the  Purchaser
reasonably  determines is required to be included in such  documents or would be
helpful  in  obtaining  any such  required  consent,  waiver,  authorization  or
approval).

              SECTION 5.04. INTENTIONALLY OMITTED.

              SECTION 5.05. NO SOLICITATION OF OTHER OFFERS.  (a) The Seller and
its Affiliates and their respective  Representatives have ceased any activities,
discussions or negotiations  with any Person or Persons other than the Purchaser
or Persons acting on its behalf that were conducted  prior to March 7, 2006 with
respect to any Acquisition Proposal.

              (b)    The Seller and its  Subsidiaries  shall not take, and shall
use commercially  reasonable  efforts to cause their respective  Representatives
and Affiliates  not to take,  any action to (i) knowingly  solicit the making or
submission of any Acquisition Proposal or (ii) knowingly initiate or participate
in any discussions or negotiations with any Person (other than the Purchaser) in
furtherance of any proposal that  constitutes or could reasonably be expected to
lead to any Acquisition  Proposal;  PROVIDED,  HOWEVER,  that the Seller and the
Representatives,   in  response  to  a  bona  fide  unsolicited   proposal  that
constitutes  an  Acquisition   Proposal,   may  participate  in  discussions  or
negotiations  with, or furnish or disclose any  non-public  information  to, any
Person  which makes such  Acquisition  Proposal if (A) the Board of Directors of
the Seller

                                      -37-
<PAGE>


reasonably  determines in good faith,  after  consultation  with its independent
financial  advisors,  that such  Acquisition  Proposal is, or may  reasonably be
expected to lead to, a Superior  Proposal and (B) the Seller shall have provided
(1) prompt  notice to the  Purchaser of its intent,  intent to take such action,
the  identity of the Person  making the  Acquisition  Proposal  and the material
terms and  conditions  of such  proposal  and (2)  received  from such Person an
executed confidentiality  agreement in reasonably customary form on terms not in
the aggregate  materially more favorable to such Person than the terms contained
in the Confidentiality Agreement. Notwithstanding the foregoing, nothing in this
Section 5.05 or any other provision of this Agreement shall prohibit the Seller,
its  Representatives  or the Board of  Directors  of the Seller  from making any
disclosure to the  stockholders  of the Seller as, in the good faith judgment of
the Board of Directors of the Seller is required  under  Applicable  Law or that
the failure to make such  disclosure is reasonably  likely to cause the Board of
Directors of the Seller to violate its respective fiduciary duties.

              (c)    The Board of  Directors  of the  Seller  (or any  committee
thereof) shall not (i) approve or recommend, or propose to approve or recommend,
any Acquisition  Proposal or (ii) cause the Seller or any of its Subsidiaries to
enter into and approve any letter of intent,  agreement  in principle or similar
agreement  relating to any Acquisition  Proposal;  PROVIDED,  HOWEVER,  that the
Board of Directors of the Seller may recommend to their respective  stockholders
an  Acquisition  Proposal  if (x) the  Board of  Directors  of the  Seller,  has
received an  Acquisition  Proposal that the Board of Directors of the Seller has
determined  in good faith,  is a Superior  Proposal  and has  complied  with its
obligations  under  this  Section  5.05  and (y) the  Seller  has  notified  the
Purchaser in writing of the terms of the Superior  Proposal and of its intent to
take such action,  and has taken into account any revised  proposal  made by the
Purchaser  to the Company  within five (5) Business  Days after  delivery to the
Purchaser  of such  notice  and again has  determined  in good  faith  that such
Acquisition  Proposal (as if the same may have been modified or amended) remains
a Superior Proposal.

              (d)    In  addition  to  the  obligations  set  forth  in  Section
5.05(c),  the Seller shall as promptly as  practicable  (and in any event within
two (2) Business Days) advise the Purchaser of any request for information  with
respect to any  Acquisition  Proposal  or of any  Acquisition  Proposal,  or any
inquiry  with  respect  to any  Acquisition  Proposal,  including  the terms and
conditions  of such  Acquisition  Proposal (but not  modifications  to terms and
conditions proposed during discussions or negotiations permitted by this Section
5.05). The Seller shall as promptly as practicable  provide to the Purchaser any
non-public  information  concerning the Company  provided to any other Person in
connection  with any  Acquisition  Proposal or any inquiry  with  respect to any
Acquisition Proposal, which was not previously provided or made available to the
Purchaser.

              SECTION  5.06.  CONFIDENTIALITY;  INFORMATION.  (a) The Seller and
each of its Subsidiaries shall and shall cause their respective  Representatives
to  keep  all  information  received  by it  or  them  in  connection  with  the
negotiations  and  execution  of  this  Agreement  and the  consummation  of the
Transactions  from the Purchaser or its  Representatives  confidential,  and the
Seller shall not, without the Purchaser's  prior written consent,  disclose such
information  in any  manner  whatsoever,  in whole or in  part,  except  (i) for
disclosure to the  Representatives of the Seller and its Subsidiaries who have a
need to know such  information for the purpose of assisting in the  consummation
of the Transactions, (ii) to the extent, in the sole judgment of the

                                      -38-
<PAGE>


Seller, disclosure is required by Applicable Law, court process or by applicable
rules or listing agreements with any national  securities  exchange or quotation
system on which the Seller lists  securities and (iii) to the extent  disclosure
is requested by any Governmental  Authority having jurisdiction over the Seller,
any of its Subsidiaries or any Seller  Representative.  The Seller shall use all
commercially   reasonable   efforts  to  cause  its   Representatives   and  its
Subsidiaries' Representatives to comply with the foregoing requirement.

              (b)    Section  5.06(a)  shall not  apply to any such  information
that (i) is or becomes generally  available to the public other than as a result
of any disclosure or other action or inaction by the Seller or its  Subsidiaries
or  any of  their  respective  Representatives,  (ii)  is or  becomes  known  or
available to the Seller or its Subsidiaries on a  non-confidential  basis from a
source (other than the Purchaser or its Representatives)  that, to the knowledge
of the Seller,  is not under a legal  obligation to disclose such information or
(iii) was  independently  developed by the Seller or its  Subsidiaries or any of
their respective  Representatives  without reference to any information provided
by the Purchaser or any of its  Representatives  (except pursuant to clauses (i)
or  (ii))  that  was  known  to the  Seller  or its  Subsidiaries  prior to such
disclosure by the Purchaser or its Representatives.

              (c)    In the event that the Seller or its  Subsidiaries or any of
their respective  Representatives  become legally  compelled (by oral questions,
interrogatories,   requests  for  information  or  documents,  subpoenas,  civil
investigative demands or otherwise),  to disclose any information referred to in
Section 5.06(a), the Seller shall or shall cause its Subsidiaries to provide the
Purchaser with prompt written notice so that the Purchaser may seek a protective
order or other  appropriate  remedy.  Failing the entry of a protective order or
other appropriate  remedy or receipt of a waiver hereunder,  the Seller shall or
shall cause its Subsidiaries, as applicable, to furnish only that portion of the
information  which it is  advised  by its  counsel  is  legally  required  to be
furnished  and shall  exercise  its  commercially  reasonable  efforts to obtain
reliable   assurance  that   confidential   treatment  shall  be  accorded  such
information.

              SECTION  5.07.  THE  DISTRIBUTION  AGREEMENTS.  (a)  Prior  to the
Closing Date, the Seller shall, and the Seller shall cause the Company to, enter
into each of the Distribution Agreements.

              (b)    From  the  date  of  execution  of any of the  Distribution
Agreements  pursuant to Section 5.07(a) until the Closing Date, the Seller shall
not materially alter,  amend or modify such  Distribution  Agreement without the
prior written  consent of the Purchaser;  PROVIDED,  that,  notwithstanding  the
foregoing, nothing in this Section 5.07 or any other provision of this Agreement
shall prohibit the Seller from, at any time prior to the Closing Date,  amending
any  schedules  of the  Separation  and  Distribution  Agreement,  to make  such
additions to or  modifications  of such  Schedules as are  necessary to make the
information  set forth  therein  true,  accurate  and  complete in all  material
respects; PROVIDED, HOWEVER, that the Seller shall not make any such alteration,
amendment or  modification  to the schedules of the Separation and  Distribution
Agreement  that  materially  adversely  affects the  financial  interests of the
Purchaser.

              SECTION 5.08. CONDUCT OF BUSINESS. During the period from the date
hereof to the Closing Date (unless earlier terminated in accordance with Section
10.03),  the Seller  shall,  and shall cause each member of the Company Group to
(a) conduct and maintain the Business in

                                      -39-
<PAGE>


the ordinary  course of business  consistent with past practice and (b) take all
reasonable   steps   available  to  maintain  the  goodwill  of  the   Business.
Notwithstanding   the   immediately   preceding   sentence,   unless   otherwise
contemplated by this Agreement, the Distribution Agreements, the Transactions or
the  Internal  Restructuring,  during  the  period  from the date  hereof to the
Closing (unless earlier terminated in accordance with Section 10.03), the Seller
shall  not,  and shall  cause  each of its  Subsidiaries  not to take any of the
following  actions solely with respect to the Company,  the other members of the
Company  Group  and the  Business  without  the  prior  written  consent  of the
Purchaser  (which such consent shall not be  unreasonably  withheld,  delayed or
conditioned):

              (a)    amend the  certificate  of  incorporation,  bylaws or other
similar  corporate  governance  instrument  of the  Company  or any of the other
members of the Company  Group,  or subdivide or reclassify in any way any of the
Company's Capital Stock or change or agree to change in any manner the rights of
the Company's outstanding Capital Stock;

              (b)    redeem,  purchase or  otherwise  acquire any of the Capital
Stock or other equity interests of any Person;

              (c)    issue or sell any shares of Capital  Stock or other  equity
interests of the Company or any of the other  members of the Company  Group,  or
securities convertible into or exchangeable for, or options,  warrants or rights
to purchase or  subscribe  to, such  Capital  Stock of the Company or any of the
other members of the Company Group;

              (d)    adopt or amend any collective  bargaining agreement that is
a Material  Contract  other than in the ordinary  course of business  consistent
with past practice;

              (e)    except to the  extent  necessary  to  effectuate  a plan of
liquidation of the Company for income tax purposes in connection  with the PBGFS
Distribution  and the deemed  liquidation  of the Company  Group  under  Section
338(h)(10) of the Code, adopt a plan of liquidation or resolutions providing for
the liquidation,  dissolution,  merger, consolidation or other reorganization of
the Company or any of the other  members of the Company  Group having  assets or
liabilities in excess of $50,000;

              (f)    grant to any employee of the Business any material increase
in compensation or benefits; PROVIDED, HOWEVER, that an increase of five percent
(5.0%) or less in  compensation  or benefits  shall not be considered a material
increase for purposes of this Section 5.08(f) if such increases shall not result
in an aggregate of a five percent (5.0%) increase in compensation or benefits of
all employees of the Business;

              (g)    permit  the  Company  or any of the  other  members  of the
Company Group to incur or assume any  liabilities,  obligations or  Indebtedness
for  borrowed   money  or  guarantee  any  such   liabilities,   obligations  or
Indebtedness  or, incur or assume any debt,  obligation  or  liability  (whether
absolute or contingent and whether or not currently due and payable) that in the
aggregate exceeds $1,000,000;

              (h)    permit  the  Company  or any of the  other  members  of the
Company Group to make any loan or advance to its officers, directors, employees,
consultants, agents or equity

                                      -40-
<PAGE>


holders, other than travel advances, expense reimbursement and similar payments,
which is in the ordinary  course of business  consistent  with past  practice as
provided above;

              (i)    permit,  allow or suffer any of assets of the  Business  to
become subjected to any Lien, other than Permitted Liens;

              (j)    make any change in any method of  accounting  or accounting
practice or policy applied to the Company Group or the Business other than those
required by Applicable Law or by GAAP;

              (k)    permit  the  Company  or any of the  other  members  of the
Company Group to merge or  consolidate  with, or acquire all or any  significant
portion of the assets of any  business or any Person,  or agree to change in any
material respect the character of its Business;

              (l)    permit  the  Company  or any of the  other  members  of the
Company  Group to make or incur any capital  expenditure  that in the  aggregate
exceeds $500,000;

              (m)    permit  the  Company  or any of the  other  members  of the
Company  Group to enter into,  materially  modify or terminate any lease of Real
Property  other than in the  ordinary  course of business  consistent  with past
practice;

              (n)    permit  the  Company  or any of the  other  members  of the
Company Group to enter into any (i) employment or consulting Contract other than
in the a manner  consistent with past practice or (ii) any other Contract either
involving  consideration  in excess of  $500,000  under  each such  Contract  or
$1,000,000 under such Contracts in the aggregate;

              (o)    permit  the  Company  or any of the  other  members  of the
Company  Group in the  ordinary  course of  business to  accelerate,  terminate,
materially  modify or cancel any Contract  involving  consideration in excess of
$1,500,000  under each such Contract or $3,000,000  under such  Contracts in the
aggregate;

              (p)    permit  the  Company  or any of the  other  members  of the
Company  Group  outside  of the  ordinary  course  of  business  to  accelerate,
terminate,  materially modify or cancel any Contract involving  consideration in
excess of $100,000  under each such Contract or $500,000 under such Contracts in
the aggregate;

              (q)    materially  change any of its business policies material to
the Business, including advertising,  marketing, pricing, purchasing, personnel,
sales,  returns,  budget  or  product  acquisition  policies  other  than in the
ordinary course of business consistent with past practice;

              (r)    transfer to or from the Company any  employees  from or to,
respectively,  Seller or any of its Affiliates or removal of any employee of the
Company or any other  member of the  Company  Group  other than in the  ordinary
course of business consistent with past practice;

              (s)    permit  the  Company  or any of the  other  members  of the
Company Group to sell,  lease,  distribute or otherwise  dispose of any material
assets of the Business (other than

                                      -41-
<PAGE>


off-lease  or returned  assets in the ordinary  course of business)  that in the
aggregate exceeds $1,000,000;

              (t)    originate  or  service  any  Financing  other  than  in the
ordinary course of business consistent with past practice;

              (u)    permit  the  Company  or any of the  other  members  of the
Company Group to hire any single  employee  whose annual base salary will exceed
$120,000 or hire more than one employee  whose annual base  salaries will in the
aggregate exceed $240,000;

              (v)    permit  the  Company  or any of the  other  members  of the
Company  Group to enter  into any  Contract  with  respect  to any IT  System or
component thereof involving  consideration in excess of $100,000 under each such
Contract or $200,000 under such Contracts in the aggregate; and

              (w)    agree or resolve,  whether or not in writing,  to do any of
the foregoing.

              SECTION 5.09.  MONTHLY MANAGEMENT  REPORTS;  DELIVERY OF FINANCIAL
STATEMENTS.  As soon as available  and in any event within  twenty (20) Business
Days after the end of each month in each fiscal year of the Company,  the Seller
shall provide to the Purchaser a copy of the  Company's  management  report with
respect to the Business for such month,  which shall include a balance sheet, an
income statement,  portfolio statistics, volume (new business),  delinquency and
write-off  report for such month  prepared  in the  ordinary  course of business
consistent  with past  practice.  As soon as reasonably  practicable,  but in no
event later than June 23, 2006,  the Seller shall  furnish to the  Purchaser the
Company 2005 Audited  Financial  Statements,  the PBG Partnership 2005 Financial
Statements and the Company 2006 First Quarter Financial Statements.

              SECTION 5.10. SCHEDULED PAYMENTS

              Subject to  consummation  of the  Transactions,  (a) all  payments
scheduled to become due in  accordance  with the terms of the leases  related to
each Financing (the "SCHEDULED  PAYMENTS")  payable to the Company or any of its
Subsidiaries  on or prior  to June 30,  2006  shall  be for the  benefit  of the
Seller,  and the  Purchaser  shall cause the  Company to hold any such  payments
received by the Company as agent, in trust and on behalf of the Seller and shall
pay and deliver the same, in the form received,  promptly to the Seller,  but in
any event no later  than (3)  Business  Days  after  receipt  of such  Scheduled
Payments and (b) the Company  shall not  dividend,  distribute or release to the
Seller  or  any  other  Person  prior  to the  earlier  of  the  Closing  or the
Termination  Date any  Scheduled  Payments  payable to the Company or any of its
Subsidiaries following June 30, 2006, which payments shall be for the benefit of
the Company and shall be held by the Company.

              SECTION 5.11.  TAXES. (a)  Notwithstanding  anything herein to the
contrary,  the Seller and the Purchaser shall jointly complete and make a timely
election  under  Section  338(h)(10) of the Code with respect to the Company and
each of the eligible  members of the Company Group on Form 8023 or in such other
manner as may be required by rule or regulation

                                      -42-
<PAGE>


of the IRS and shall jointly make an election in the manner  required  under any
analogous  provisions of state or local law with respect to the Company and each
of the eligible members of the Company Group. The Seller and the Purchaser shall
prepare Form 8023 and all such forms as are required as attachments to Form 8023
(and all forms under  analogous  provisions of state or local law) in accordance
with applicable Tax laws. Such duly executed and completed forms as are required
to be filed under Section  338(h)(10) of the Code (and  analogous  provisions of
state or local law) shall be  delivered  by the  Seller  and  Purchaser  to each
other.

              (b)    The  Seller  and the  Purchaser  agree to use  commercially
reasonable  efforts  to  perform  or  cause to be  performed  on or prior to the
Closing Date: (i) an initial valuation of assets of the Company and the eligible
members of the Company  Group for  purposes  of Section 338 of the Code;  (ii) a
computation  of the  aggregate  deemed sale price  ("ADSP")  (as  defined  under
Treasury  Regulations  Section  1.338-4) with respect to the Company and each of
the eligible  members of the Company  Group;  and (iii) an allocation of ADSP of
the  Company  and the  eligible  members of the  Company  Group for  purposes of
Section 338 of the Code (collectively, the "338 VALUATIONS AND ALLOCATIONS").

              (c)    If  the  Seller  and  the  Purchaser  agree  upon  the  338
Valuations and  Allocations on or prior to the Closing Date, then on or prior to
the date that is 120 days  following the Closing Date,  the 338  Valuations  and
Allocations  shall be  adjusted  appropriately  to reflect  any  purchase  price
adjustment   under  Section  2.03  hereof  (the  "ADJUSTED  338  VALUATIONS  AND
ALLOCATIONS").  The Adjusted 338 Valuations and Allocations  determined pursuant
to this Section  5.11(c) shall be used for purposes of all relevant Tax Returns,
reports and  filings,  and neither the Seller nor the  Purchaser  shall take any
position that is inconsistent therewith.

              (d)    If the Seller and the  Purchaser  cannot agree upon the 338
Valuations and  Allocations on or prior to the Closing Date,  then the first Big
Four Public  Accounting  Firm (on an  alphabetical  basis) that is not currently
serving as the  auditor of any of the  Seller,  Company  or  Purchaser  shall be
selected to determine the 338  Valuations  and  Allocations  in accordance  with
Section  5.11(c) hereof.  The 338 Valuations and Allocations  determined by such
independent  public  accounting  firm shall be final and  binding.  The fees and
expenses  incurred  with  respect  to the  independent  public  accounting  firm
performing the 338 Valuations and  Allocations  shall be allocated fifty percent
(50%) to the Seller and fifty percent (50%) to the Purchaser. The 338 Valuations
and  Allocations  determined  pursuant to this Section 5.11(d) shall be used for
purposes of all  relevant  Tax  Returns,  reports and  filings,  and neither the
Seller nor the Purchaser shall take any position that is inconsistent therewith.

              (e)    This  Agreement  and  the   Separation   and   Distribution
Agreement  shall  constitute  the  Company's  plan of complete  liquidation  for
purposes of Section 332 of the Code.  The Purchaser  and the Seller  acknowledge
and agree that the PBGFS  Distribution  will be part of a  complete  liquidation
under Treasury Regulations Sections  1.338(h)(10)-1(d)(4) and 1.338(h)(10)-1(e),
Ex.2.

              (f)    Except as provided in paragraph  (a) of this Section  5.11,
the Purchaser shall not make any election under Section 338 of the Code.

                                      -43-
<PAGE>


              SECTION 5.12.  STATUTE OF  LIMITATIONS.  The Company shall prepare
and deliver to the  Purchaser a list of all  outstanding  waivers or  comparable
consents regarding the application of the statute of limitations with respect to
any material  non-income Taxes or material non-income Tax Returns of the Company
or its Subsidiaries.

              SECTION 5.13.  DIRECTORS  AND  OFFICERS.  Within ten (10) Business
Days of the Closing, the Seller shall deliver in writing to the Purchaser a list
setting forth the identity and title of each director and officer of the Company
Group.  At least five (5) Business Days prior to Closing,  the  Purchaser  shall
deliver  in  writing  to  the  Seller  a list  (the  "RESIGNATION  LIST")  which
identifies  by name,  title and  employer  those  directors  and officers of the
Company Group whom Purchaser would like to resign effective as of Closing.

              SECTION 5.14. CLOSING DATE OPERATIONS  EXPENSE  STATEMENT.  On the
Closing Date,  the Seller shall  deliver to the Purchaser an unaudited  combined
pro forma statement of Operation Expenses for the four month period ending as of
the last day of the month immediately  preceding the Closing Date identifying on
a line by line basis each category of expenses  incurred by Pitney Bowes Capital
Services and setting forth the  assumptions,  exceptions  and basis for deriving
such amounts,  prepared in accordance  with GAAP on a basis  consistent with the
policies,  principles,  practices and methods set forth on SCHEDULE 3.05(c) (the
"CLOSING DATE OPERATIONS EXPENSE STATEMENT").

              SECTION  5.15.  ASSISTANCE.  The Seller shall  cooperate  with the
Purchaser  in  connection  with  the  financing  contemplated  by the  Financing
Commitment Letter, including, under the supervision of the Seller, providing the
Purchaser  and  its  financing  sources  and  their  respective  representatives
reasonable  access during normal  business  hours from the date of execution and
delivery  of this  Agreement  to the Closing  Date (or the  earlier  termination
hereof)  to the  books  and  records  and  employees  of  the  Company  and  its
Subsidiaries  related to the  Business  (after  taking into effect the  Internal
Restructuring,  the PBGFS Contribution,  the Company  Contribution and the PBGFS
Distribution)  and using (and  causing  its  Subsidiaries  to use)  commercially
reasonable  efforts  to  satisfy  all  conditions  precedent  in  the  Financing
Commitment  Letter within the control of the Seller and its  Subsidiaries  to be
satisfied  by the Seller and its  Subsidiaries;  PROVIDED,  that such access and
efforts shall not interfere  with the day-to-day  operations of the Seller,  the
Company and its  Subsidiaries.  For the avoidance of doubt, the Seller shall not
be obligated to provide any  information  relating to any  financial  statements
other than the  financial  statements  related to the Business and  furnished as
contemplated  by this  paragraph,  and the Seller shall not be required to incur
any expenses in connection with providing such access.  Upon  reasonable  notice
from the Purchaser,  the Seller shall permit members of senior management of the
Company Group (the "PARTICIPATING MANAGEMENT MEMBERS") to participate, under the
supervision of the Seller, in meetings with prospective investors,  "road shows"
in connection with the financing,  meetings with rating agencies and in drafting
sessions  related to the offering  materials for the  Transaction  Financing and
Seller shall use reasonable  efforts to cause the present and former independent
accountants  for the Seller to participate in drafting  sessions  related to the
offering  materials  for  the  Transaction  Financing  and  making  work  papers
available  to the  Purchaser,  the  underwriters  or  placement  agents  for the
Transaction  Financing and their respective  representatives;  PROVIDED that the
Purchaser  shall endeavor to minimize the  interference  with the ability of the
Participating  Management Members to carry out their normal responsibilities for
ongoing management of the Business resulting from

                                      -44-
<PAGE>


such participation in drafting sessions and the road show; PROVIDED FURTHER that
the Purchaser shall indemnify and hold harmless the Seller,  the Company and its
Subsidiaries  against any and all Losses to which they may become  subject under
any securities laws including,  without limitation,  the Securities Act of 1933,
as amended,  the  Securities  Exchange  Act of 1934,  as  amended,  or any other
statute  or common law of the United  States or any other  country or  political
subdivision  thereof,  or otherwise,  including the amount paid in settlement of
any litigation  commenced or threatened,  and shall promptly  reimburse them, as
and  when  incurred,  for  any  legal  or  other  expenses  incurred  by them in
connection with  investigating any claims and defending any actions,  insofar as
any such  Losses  arise out of or are based  upon (i) any  untrue  statement  or
alleged  untrue  statement of a material  fact by any  Participating  Management
Member  at any such  drafting  session  or road  show  presentation  or (ii) the
omission or alleged  omission to state a material  fact required to be stated by
such  Participating  Management  Member in order to make his/her  statements not
misleading  to a  prospective  investor;  PROVIDED  FURTHER  that the  foregoing
indemnity shall not apply to any statements by Participating  Management Members
which (x) are slanderous against the Purchaser or its Affiliates,  (y) are based
on the gross negligence or willful  misconduct of such  Participating  Member or
(z) such  Participating  Member knows to be untrue or misleading.  The Purchaser
shall  promptly,  upon  request  by the  Seller,  reimburse  the  Seller for all
documented  out-of-pocket  expenses  incurred by the Seller or its Affiliates or
representatives  in connection with such cooperation.  Nothing contained in this
Section  5.15  shall  be  deemed  to limit  the  indemnification  rights  of any
Purchaser Indemnified Party under Article VIII hereof.

                                   ARTICLE VI

                           COVENANTS OF THE PURCHASER

              SECTION 6.01. COMPLIANCE WITH CONDITIONS;  COMMERCIALLY REASONABLE
EFFORTS.  The Purchaser shall use all commercially  reasonable  efforts to cause
all  conditions  precedent to the  obligations of the Purchaser to be satisfied,
including,  without limitation,  maintaining in full force and effect the Equity
Commitment  Letter and the Employee  Benefits  Agreement.  The  Purchaser  shall
cooperate to cause all conditions  precedent to the obligations of the Seller to
be satisfied in which the Purchaser's  participation  is reasonably  required by
the Seller to satisfy such conditions  precedent.  Upon the terms and subject to
the  conditions  of this  Agreement,  the Purchaser  shall use all  commercially
reasonable  efforts to take,  or cause to be taken,  all  action,  and to do, or
cause to be done,  all things  necessary,  proper or advisable  consistent  with
Applicable Law to consummate and make effective in the most  expeditious  manner
practicable the Transactions  and the Internal  Restructuring in accordance with
the terms of this Agreement and the Separation and Distribution Agreement.

              SECTION 6.02. CONSENTS AND APPROVALS.  The Purchaser (a) shall use
all commercially  reasonable efforts to obtain all necessary consents,  waivers,
authorizations  and approvals of all  Governmental  Authorities and of all other
Persons  required in connection with the execution,  delivery and performance of
this Agreement and the Purchaser  Transaction  Documents or the  consummation of
the Transactions by the Purchaser and (b) shall diligently  assist and cooperate
with the Seller in preparing and filing all documents required to be

                                      -45-
<PAGE>


submitted by the Seller to any  Governmental  Authority in  connection  with the
Transactions  (which  assistance and cooperation shall include timely furnishing
to the Seller all  information  concerning  the  Purchaser  that  counsel to the
Seller  reasonably  determines  is required to be included in such  documents or
would be helpful in obtaining any such required consent,  waiver,  authorization
or approval).

              SECTION  6.03.  CONFIDENTIALITY;  INFORMATION.  (a) The  Purchaser
shall and shall cause its Representatives to keep all information received by it
or them in connection with the  negotiations and execution of this Agreement and
the  consummation  of the  Transactions  from the Seller or its  Representatives
confidential,  and the Purchaser  shall not,  without the Seller's prior written
consent,  disclose such  information  in any manner  whatsoever,  in whole or in
part, except (i) for disclosure to the  Representatives of the Seller who have a
need to know such  information for the purpose of assisting in the  consummation
of the  Transactions,  (ii) to the extent,  in the sole  judgment of the Seller,
disclosure  is  required  by  Applicable  Law or court  process and (iii) to the
extent disclosure is requested by any Governmental Authority having jurisdiction
over the  Seller,  any of its  Subsidiaries  or any Seller  Representative.  The
Purchaser  shall  use  its   commercially   reasonable   efforts  to  cause  its
Representatives to comply with the foregoing requirement.

              (b)    Section  6.03(a)  shall not  apply to any such  information
that (i) is or becomes generally  available to the public other than as a result
of any  disclosure  or other  action or inaction by the  Purchaser or any of its
Representatives,  (ii) is or becomes  known or available  to the  Purchaser on a
non-confidential   basis   from  a  source   (other   than  the  Seller  or  its
Representatives)  that, to the knowledge of the Purchaser,  is not under a legal
obligation  to  disclose  such   information  to  the  Purchaser  or  (iii)  was
independently   developed  by  the  Purchaser  or  its  Representatives  without
reference  to any  information  provided  by the  Seller or its  Representatives
(except  pursuant to clauses (i) or (ii)) that was known to the Purchaser  prior
to such disclosure by the Seller or its Representatives.

              (c)    In the  event  that the  Purchaser  or its  Representatives
become  legally  compelled  (by oral  questions,  interrogatories,  requests for
information or documents,  subpoenas, civil investigative demands or otherwise),
to disclose any information  referred to in Section 6.03(a), the Purchaser shall
provide  the Seller  with  prompt  written  notice so that the Seller may seek a
protective order or other appropriate remedy.  Failing the entry of a protective
order or  other  appropriate  remedy  or  receipt  of a  waiver  hereunder,  the
Purchaser shall furnish only that portion of the information which it is advised
by its  counsel is legally  required  to be  furnished  and shall  exercise  its
commercially  reasonable  efforts to obtain reliable assurance that confidential
treatment shall be accorded such information.

              SECTION 6.04.  PROHIBITION  ON  SOLICITATION  AND HIRING.  (a) The
Purchaser  shall not, nor shall it permit any Affiliate  (other than a portfolio
company)  to, for a period of two (2) years from the date  hereof,  directly  or
indirectly,  solicit for  employment or hire any senior  management  employee or
senior  technical   employee  of  the  Business,   the  Seller  or  any  of  its
Subsidiaries,  with whom the  Purchaser  came into contact as a result of either
the due diligence  process in respect of the  Transactions,  whether or not such
Person  would  commit a breach of his or her contract of service in leaving such
employment;  PROVIDED,  HOWEVER,  that the  foregoing  shall  not  prohibit  the
Purchaser or an Affiliate of the  Purchaser  from making  general  solicitations

                                      -46-
<PAGE>


of  employment  (or  engaging  search  firms  to make  such  solicitations)  not
specifically  directed toward employees of the Seller or any of its Subsidiaries
and/or  hiring any employee who  responds to any such  general  solicitation  or
initiates contact with the Purchaser or Affiliate without solicitation.

              (b)    If this Agreement is terminated  pursuant to Section 10.03,
the  Purchaser  shall  not,  nor shall it permit  any  Affiliate  (other  than a
portfolio  company  to the extent  permitted  below) to, for a period of two (2)
years from the date hereof,  directly or indirectly,  assist (including  through
identification,   introduction   or  otherwise   for  the  purpose  of  inducing
employment) a portfolio  company of the Purchaser or Affiliate in soliciting for
employment any senior  management  employee or senior technical  employee of the
Business,  the Seller or any of its  Subsidiaries,  with whom the Purchaser came
into contact as a result of either the due  diligence  process in respect of the
Transactions,  whether or not such  Person  would  commit a breach of his or her
contract of service in leaving  such  employment;  PROVIDED,  HOWEVER,  that the
foregoing  shall not  prohibit  any  portfolio  company of the  Purchaser  or an
Affiliate of the Purchaser from making general  solicitations  of employment (or
engaging  search firms to make such  solicitations)  not  specifically  directed
toward  employees  of the Seller or any of its  Subsidiaries  and/or  hiring any
employee who responds to any such general solicitation or initiates contact with
the portfolio company of the Purchaser or Affiliate without solicitation.

              SECTION 6.05. FINANCING COMMITMENT LETTER. (a) The Purchaser shall
use its  commercially  reasonable  efforts  to take,  or cause to be taken,  all
actions  and to do,  or  cause to be  done,  all  things  necessary,  proper  or
advisable to (i) maintain in effect the Transaction  Financing and the Financing
Commitment Letter, (ii) enter into definitive  financing agreements with respect
to the Transaction Financing,  so that such agreements are in effect as promptly
as  practicable  but in any  event no  later  than the  Closing  Date and  (iii)
consummate the Transaction Financing at or prior to Closing.

              (b)    If,  notwithstanding  the  use of  commercially  reasonable
efforts by the Purchaser to satisfy its obligations  under Section 6.05(a),  any
of the  Transaction  Financing  or  the  Financing  Commitment  Letter  (or  any
definitive  financing agreement relating thereto) expire or are terminated prior
to the Closing,  in whole or in part,  for any reason,  the Purchaser  shall (i)
promptly  notify the Seller of such  expiration or  termination  and the reasons
therefor and (ii) promptly  arrange for alternative  debt or equity financing to
replace the financing  contemplated by such expired or terminated commitments or
agreements  (A)  in  an  amount   sufficient  to  consummate  the   Transactions
contemplated  by  this  Agreement,  (B) on  substantially  the  same  terms  and
conditions  as set  forth in the  draft  Commitment  Letter  attached  hereto as
EXHIBIT  G  and  (C)  from  a  reputable  financial  institution(s)   reasonably
acceptable to the Seller,  which shall include those  institutions  set forth on
SCHEDULE 6.05(b).

                                      -47-
<PAGE>


                                  ARTICLE VII

                         CONDITIONS PRECEDENT TO CLOSING

              SECTION 7.01. CONDITIONS TO THE SELLER'S OBLIGATIONS IN RESPECT OF
THE CLOSING. The obligations of the Seller to sell the Shares hereunder shall be
subject,  at the election of the Seller,  to the satisfaction or waiver,  on the
Closing Date, of the following conditions:

              (a)    The representations and warranties of the Purchaser in this
Agreement  shall be true and  correct  in all  respects  (without  regard to any
material adverse effect or materiality  qualification)  on and as of the Closing
Date  with  the same  force  and  effect  as  though  such  representations  and
warranties  were  made  as of  the  Closing  Date,  except  to the  extent  such
representations  and  warranties  expressly  relate to an earlier date (in which
case such  representations and warranties shall be true and correct on and as of
such  earlier  date);  PROVIDED,  that the  condition  set forth in this Section
7.01(a)  shall only be deemed to not have been  satisfied  if the failure of any
such  representation(s)  and  warranty(ies) to be true and correct have or would
reasonably  be likely to have,  individually  or in the  aggregate,  a  material
adverse effect on the ability of the Purchaser to consummate the Transactions.

              (b)    The Purchaser shall have performed in all material respects
all obligations and agreements,  and complied in all material  respects with all
covenants  contained in this  Agreement to be performed and complied with by the
Purchaser on the Closing Date.

              (c)    The  Purchaser   shall  have  delivered  to  the  Seller  a
certificate executed by it or on its behalf by a duly authorized representative,
dated the Closing Date, to the effect that each of the  conditions  specified in
paragraphs (a) and (b) of this Section 7.01 has been satisfied.

              (d)    No provision of any  Applicable Law or  Governmental  Order
shall be in effect  which  has the  effect of  making  the  Transactions  or the
ownership by the Purchaser of the Shares illegal or shall otherwise prohibit the
consummation of the Transactions.

              (e)    The Internal  Restructuring,  the PBGFS  Contribution,  the
Company Contribution and the PBGFS Distribution shall have been consummated.

              (f)    The  Purchaser  shall have  executed  and  delivered to the
Seller a copy of Form 8023,  including an election  under Section  338(h)(10) of
the Code for the Company and each of the eligible members of the Company Group.

              (g)    The Employee Benefits  Agreement shall be in full force and
effect.

              (h)    No action, suit or proceeding shall have been instituted or
threatened prior to the Closing to restrain, prohibit or obtain damages or other
relief, or otherwise  interfere with the performance of any material  obligation
of  any  party  under  this  Agreement  or  the  Distribution  Agreements,   the
consummation of any transaction contemplated hereby or thereby, or the ownership
of the Shares by the  Purchaser,  or which  otherwise  questions the legality or
validity of any transaction contemplated hereby or thereby or which might affect
the right of the Purchaser to own,  operate or control,  after the Closing,  the
Business and the assets, properties and businesses of the Company Group or which
has or may have a Material Adverse Effect, and no

                                      -48-
<PAGE>


temporary,  preliminary or permanent  injunction or restraining order shall have
been issued by any judicial or administrative tribunal of competent jurisdiction
which would have any of the foregoing effects.

              (i)    The  Equity  Commitment  Letter  shall be in full force and
effect.

              SECTION 7.02. CONDITIONS TO THE PURCHASER'S OBLIGATIONS IN RESPECT
OF THE  CLOSING.  The  obligations  of the  Purchaser  to  purchase  the  Shares
hereunder shall be subject to the  satisfaction or waiver,  on the Closing Date,
of the following conditions:

              (a)    The  representations  and  warranties of the Seller in this
Agreement  shall be true and  correct  in all  respects  (without  regard to any
Material Adverse Effect or materiality  qualification)  on and as of the Closing
Date  with  the same  force  and  effect  as  though  such  representations  and
warranties  were  made  as of  the  Closing  Date,  except  to the  extent  such
representations  and  warranties  expressly  relate to an earlier date (in which
case such  representations and warranties shall be true and correct on and as of
such  earlier  date);  PROVIDED,  that the  condition  set forth in this Section
7.02(a)  shall only be deemed to not have been  satisfied  if the failure of any
such  representation(s)  and  warranty(ies) to be true and correct have or would
reasonably  be likely to have,  individually  or in the  aggregate,  a  Material
Adverse Effect.

              (b)    The Seller shall have  performed  in all material  respects
all of its obligations,  agreements and covenants contained in this Agreement to
be performed and complied with at or prior to the Closing Date.

              (c)    The  Seller  shall  have   delivered  to  the  Purchaser  a
certificate executed by it or on its behalf by a duly authorized representative,
dated the Closing Date, to the effect that each of the  conditions  specified in
paragraphs (a) and (b) of this Section 7.02 has been satisfied.

              (d)    No provision of any  Applicable Law or  Governmental  Order
shall be in effect  which  has the  effect of  making  the  Transactions  or the
ownership by the Purchaser of the Shares illegal or shall otherwise prohibit the
consummation of the Transactions.

              (e)    The  Seller  shall  have  delivered  to the  Purchaser  the
Company 2005 Audited  Financial  Statements,  the PBG Partnership 2005 Financial
Statements and the Company 2006 First Quarter Financial Statements.

              (f)    Each of the individuals  set forth on the Resignation  List
shall have resigned from the board of director and/or officer position(s) of the
Company  Group  set  forth  opposite  his or her  name on the  Resignation  List
effective as of the Closing.

              (g)    The Internal  Restructuring,  the PBGFS  Contribution,  the
Company Contribution and the PBGFS Distribution shall have been consummated.

              (h)    The Seller and the Company  shall have entered into each of
the  Distribution  Agreements  which  shall  be in full  force  and  effect  and
delivered a copy of each of the fully  executed  Distribution  Agreements to the
Purchaser.

                                      -49-
<PAGE>


              (i)    No action, suit or proceeding shall have been instituted or
threatened prior to the Closing to restrain, prohibit or obtain damages or other
relief, or otherwise  interfere with the performance of any material  obligation
of  any  party  under  this  Agreement  or  the  Distribution  Agreements,   the
consummation of any transaction contemplated hereby or thereby, or the ownership
of the Shares by the  Purchaser,  or which  otherwise  questions the legality or
validity of any transaction contemplated hereby or thereby or which might affect
the right of the Purchaser to own,  operate or control,  after the Closing,  the
Business and the assets, properties and businesses of the Company Group or which
has or may have a Material  Adverse  Effect,  and no temporary,  preliminary  or
permanent injunction or restraining order shall have been issued by any judicial
or administrative tribunal of competent jurisdiction which would have any of the
foregoing effects.

              (j)    The Seller  shall have  complied  with each of its delivery
obligations pursuant to Section 2.02(b) hereto.

              (k)    The consents listed on SCHEDULE 7.02(k) shall have been (i)
obtained and the evidence of such  consents  delivered to the  Purchaser or (ii)
otherwise dealt with in accordance with SCHEDULE 2.03(e) hereof.

              (l)    The third party  agreements  set forth on SCHEDULE  7.02(l)
shall have been  executed and  delivered by the parties  thereto and shall be in
full force and effect.

              (m)    The  Seller  shall  have  executed  and  delivered  to  the
Purchaser a copy of Form 8023, including an election under Section 338(h)(10) of
the Code for the Company and each of the eligible members of the Company Group.

                                  ARTICLE VIII

                                 INDEMNIFICATION

              SECTION 8.01. INDEMNIFICATION BY THE SELLER

              (a)    For the time  periods  and subject to the  limitations  and
conditions  set forth below or elsewhere in this Article VIII, the Seller agrees
to  indemnify  and hold  the  Purchaser,  the  Company  Group  and each of their
respective  successors  and  permitted  assigns and their  respective  officers,
directors,  employees,   representatives,   attorneys,  consultants  and  agents
(individually a "PURCHASER  INDEMNIFIED PARTY" and collectively,  the "PURCHASER
INDEMNIFIED PARTIES") harmless from and against all Losses that are sustained or
incurred by any of the  Purchaser  Indemnified  Parties by reason of,  resulting
from or arising out of all or any of the following:

                     (i)    any  breach or  inaccuracy  of a  representation  or
       warranty of the Seller contained in this Agreement or in any Distribution
       Agreement  (without regard to any Material  Adverse Effect  qualification
       and without  regard to any  amendment,  addition or  modification  to the
       Schedules as contemplated by Section 3.25 hereof);

                                      -50-
<PAGE>


                     (ii)   any  breach of or  failure  by the Seller to perform
       any of its covenants,  agreements or other obligations  contained in this
       Agreement or in any Distribution Agreement;

                     (iii)  any actions or operations of the Company Group prior
       to the Closing that result in a breach or inaccuracy of a  representation
       or  warranty  of  the  Seller  contained  in  this  Agreement  or in  any
       Distribution  Agreement  (without  regard to any Material  Adverse Effect
       qualification   and  without  regard  to  any   amendment,   addition  or
       modification to the Schedules as contemplated by Section 3.25 hereof);

                     (iv)   any  failure  of  the  Company's   Financing   Files
       pertaining to each Financing to be complete in all material respects with
       respect to the Company's interest in such Financing; or

                     (v)    any  claims  of   stockholders   of  the  Seller  in
       connection  with  the   transactions   contemplated   hereby  or  by  the
       Distribution Agreements.

              (b)    Any claims for  indemnification  made  pursuant  to Section
8.01(a)(i), Section 8.01(a)(iii) and 8.01(a)(iv) will be paid only to the extent
that the  aggregate  amount of all such  claims  exceeds Two Million Two Hundred
Fifty Thousand Dollars  ($2,250,000),  at which point the Seller shall be liable
for the full amount of such Losses back to the first dollar thereof.

              SECTION 8.02. INDEMNIFICATION BY PURCHASER.

              (a)    The Purchaser agrees to indemnify and hold the Seller,  its
Affiliates and each of their  respective  successors  and permitted  assigns and
their respective officers,  directors,  employees,  representatives,  attorneys,
consultants  and  agents   (individually  a  "SELLER   INDEMNIFIED   PARTY"  and
collectively,  the "SELLER  INDEMNIFIED  PARTIES") harmless from and against any
and all Losses that are  sustained or incurred by any of the Seller  Indemnified
Parties  by  reason  of,  resulting  from  or  arising  out of all or any of the
following:

                     (i)    any  breach or  inaccuracy  of a  representation  or
       warranty  of  the  Purchaser  contained  in  this  Agreement  or  in  any
       Distribution Agreement to which the Purchaser is a party;

                     (ii)   any breach of or failure by the Purchaser to perform
       any of its covenants,  agreements or other obligations  contained in this
       Agreement or in any  Distribution  Agreement to which the  Purchaser is a
       party; or

                     (iii)  any actions or operations of the Company Group after
       the Closing.

              (b)    Any claims for  indemnification  made  pursuant  to Section
8.02(a)(i) will be paid only to the extent that the aggregate amount of all such
claims exceeds Two Million Two Hundred Fifty Thousand Dollars  ($2,250,000),  at
which  point the  Purchaser  shall be liable for the full  amount of such Losses
back to the first dollar thereof.

                                      -51-
<PAGE>


              SECTION 8.03. CLAIMS PROCEDURE.

              (a)    Except with respect to third party claims, actions or suits
covered  by  Section  8.04,  any  Purchaser  Indemnified  Party  or  any  Seller
Indemnified  Party who  wishes to make a claim  for  indemnification  for a Loss
pursuant to this Article VIII (an "INDEMNIFIED PARTY") shall give written notice
to each  Person from whom  indemnification  is being  claimed (an  "INDEMNIFYING
PARTY") with reasonable  promptness after the Indemnified  Party's  discovery of
the  facts and  circumstances  giving  rise to the  indemnification  claim.  The
Indemnified  Party shall  supply the  Indemnifying  Party such  information  and
documents as it has in its possession  regarding  such claim,  together with all
pertinent  information  in its  possession  regarding  the amount of the Loss it
asserts it has sustained or incurred,  and will permit the Indemnifying Party to
inspect such other records and books in the possession of the Indemnified  Party
and  relating to the claim and  asserted  Loss as the  Indemnifying  Party shall
reasonably  request.  The Indemnifying  Party shall have a period of thirty (30)
days after receipt by the Indemnifying Party of such notice and such evidence to
either  (i) agree to the  payment of the Loss to the  Indemnified  Party or (ii)
contest the payment of the Loss. If the Indemnifying  Party does not agree to or
contest  the  payment  of the Loss  within  such  thirty  (30) day  period,  the
Indemnifying  Party  shall be deemed to have  accepted  all of the Loss.  If the
Indemnifying  Party agrees to the payment of the Loss or has been deemed to have
accepted all of the Loss,  then the  Indemnifying  Party shall,  within ten (10)
Business Days after such agreement or acceptance,  pay to the Indemnified  Party
the  amount  of the  Loss  that is  payable  pursuant  to,  and  subject  to the
limitations  set forth in, this  Article  VIII.  The failure of the  Indemnified
Party to give the notice referred to herein with reasonable promptness shall not
relieve the  Indemnifying  Party of its  indemnification  obligations  hereunder
except to the extent that the  Indemnifying  Party is actually  prejudiced  as a
result of the failure to give such notice.

              SECTION 8.04. THIRD PARTY CLAIMS

              (a)    If any claim, action at law or suit in equity is instituted
by a third  party  against  an  Indemnified  Party  with  respect  to  which  an
Indemnified  Party  intends to claim  indemnification  for any Losses under this
Article  VIII,  such  Indemnified   Party  shall  give  written  notice  to  the
Indemnifying Party of such claim, action or suit with reasonable promptness. The
failure to give the notice  required by this  Section  8.04(a)  with  reasonable
promptness  shall not  relieve  the  Indemnifying  Party of its  indemnification
obligations  hereunder  except  to the  extent  that the  Indemnifying  Party is
actually prejudiced as a result of the failure to give such notice.

              (b)    The  Indemnifying  Party  shall have thirty (30) days after
receipt of such notice to assume the conduct and control,  at the expense of the
Indemnifying  Party,  of the settlement or defense  thereof and the  Indemnified
Party shall cooperate with it in connection  therewith.  Any  Indemnified  Party
shall have the right to employ separate  counsel in any such action or claim and
to participate in the defense thereof, but the fees and expenses of such counsel
shall not be at the expense of the Indemnifying Party.

              (c)    The  Indemnified  Party and the  Indemnifying  Party  shall
cooperate  with  each  other to the  fullest  extent  possible  in regard to all
matters  relating  to the  third-party  claim,  including,  without  limitation,
corrective  actions  required by  Applicable  Law,  assertion of  defenses,  the
determination,  mitigation,  negotiation  and settlement of all amounts,  costs,
actions,  penalties,  damages and the like related thereto,  access to the books
and records of the parties  hereto and their  Subsidiaries,  and, if  necessary,
providing  the party  controlling  the  defense of the

                                      -52-
<PAGE>


third party claim and its counsel with any powers of attorney or other documents
required  to permit the party  controlling  the defense of the third party claim
and its counsel to act on behalf of the other party.

              (d)    Neither the Indemnified  Party nor the  Indemnifying  Party
shall settle any such third party claim  without the consent of the other party,
which  consent  shall not be  unreasonably  withheld,  conditioned  or  delayed;
PROVIDED,  HOWEVER,  that if such settlement  involves the payment of money only
and  the  release  of  all  claims  and  the  Indemnified  Party  is  completely
indemnified therefore and nonetheless refuses to consent to such settlement, the
Indemnifying  Party shall cease to be obligated for such third party claim.  Any
compromise  or  settlement of the claim under this Section 8.04 shall include as
an  unconditional  term  thereof  the giving by the  claimant in question to the
Indemnifying  Party and the Indemnified Party of a release of all liabilities in
respect of such claims.

              SECTION  8.05.  TERMINATION  OF  INDEMNIFICATION  FOR  BREACHES OF
REPRESENTATIONS AND WARRANTIES. The obligations to indemnify and hold harmless a
party hereto pursuant to (i) Sections  8.01(a)(i) and 8.02(a)(i) shall terminate
when the applicable  representation or warranty  terminates  pursuant to Section
10.01;  PROVIDED,  HOWEVER,  that such obligation to indemnify and hold harmless
shall not terminate with respect to any item as to which the  Indemnified  Party
shall have,  before the expiration of the applicable  period,  previously made a
claim,  with  reasonable  specificity,  in  accordance  with Section 8.03 to the
Indemnifying Party.

              SECTION    8.06.    LIMITATIONS    ON    INDEMNITY    OBLIGATIONS.
Notwithstanding any contrary provision of this Agreement,  the maximum aggregate
liability of any Indemnifying  Party (including any costs and expenses  incurred
by any  Indemnified  Party in connection  with defending any third party claims)
pursuant to Sections 8.01(a)(i),  8.01(a)(iii),  8.01(a)(iv) and 8.02(a)(i),  as
applicable,  shall not exceed Seventy Million Dollars  ($70,000,000);  PROVIDED,
HOWEVER, that notwithstanding the foregoing,  the maximum aggregate liability of
the  Seller  (including  any  costs  and  expenses  incurred  by  any  Purchaser
Indemnified  Party in  connection  with  defending  any third party  claims) for
breach of any of the  representations  and  warranties  provided in Section 3.09
(Employee Benefit Plans),  Section 3.15  (Environmental  Matters),  Section 3.17
(Taxes)  and  Section  3.18  (Financing)  shall not  exceed  an amount  equal to
twenty-four percent (24%) of the Purchase Price.

              SECTION  8.07.  LOSSES NET OF  INSURANCE,  ETC.  The amount of any
Losses for which  indemnification  is provided  under this Article VIII shall be
net of (a) any amounts actually  received by the Indemnified Party or any of its
Subsidiaries  pursuant to any  indemnification by or  indemnification  agreement
with any third party in relation to such Losses,  (b) any insurance  proceeds or
other cash  receipts or sources of  reimbursement  received  by the  Indemnified
Party or any of its  Subsidiaries  as an offset against such Losses (each Person
named in clauses (a) and (b), a "COLLATERAL SOURCE"), and (c) an amount equal to
the present value of the Tax benefit,  if any,  attributable to such Losses. The
Indemnifying Party may require an Indemnified Party to assign the rights to seek
recovery from Collateral Sources; PROVIDED, HOWEVER, that the Indemnifying Party
will then be  responsible  for pursuing  such claim at its own  expense.  If the
amount to be netted  hereunder in connection  with a Collateral  Source from any
payment  required under Section 8.01 or 8.02 is determined  after payment by the
Indemnifying Party of any amount otherwise required to be paid to an Indemnified
Party under this Article VIII, the Indemnified

                                      -53-
<PAGE>


Party shall repay to the Indemnifying Party,  promptly after such determination,
any amount that the  Indemnifying  Party  would not have had to pay  pursuant to
this Article VIII had such  determination been made at the time of such payment,
and any excess recovery from a Collateral  Source shall be applied to reduce any
future payments to be made by the Indemnifying Party pursuant to Section 8.01 or
8.02.

              SECTION 8.08.  INDIRECT  LOSSES;  MITIGATION.  The parties  hereto
agree  that  Losses   hereunder  shall  not  include  any  incidental   damages,
consequential  damages,   special  damages,  damages  arising  out  of  business
interruption  or lost profits,  damages  arising  through the application of any
statutory multiplier to any Losses or punitive damages. Any party hereto seeking
indemnification  under this Agreement  shall take and shall cause its Affiliates
and their respective directors and officers to take all commercially  reasonable
steps to  mitigate  the amount of any Losses  upon  becoming  aware of any event
which would  reasonably be expected to, or does,  give rise  thereto,  including
incurring  costs only to the minimum  extent  necessary  to remedy the breach or
inaccuracy which gives rise to such Losses.

              SECTION 8.09. OTHER  LIMITATIONS.(a)  Notwithstanding any contrary
provision of this Agreement,  under no circumstances  shall the Seller indemnify
any Purchaser  Indemnified Party for Taxes relating to Post Closing Tax Periods.
To the extent permitted by law, indemnification payments made hereunder shall be
treated as adjustments to purchase price for tax purposes.

              SECTION 8.10. SOLE  REMEDY/WAIVER.  The parties hereto acknowledge
and agree that the  remedies  provided  for in this  Article VIII shall be their
sole and  exclusive  remedy for any  misrepresentations  or breach of warranties
contained in this Agreement. In furtherance of the foregoing, the parties hereto
hereby  waive to the fullest  extent  permitted by  applicable  Law, any and all
other rights and claims  (including  rights of  contributions,  if any) known or
unknown, foreseen or unforeseen, which exist or may arise in the future, that it
may have against the other party hereto or any of its  Representatives,  arising
under or based upon any law  (including  any such law relating to  environmental
matters  or  arising  under or based  upon any  securities  law,  common  law or
otherwise) for any  misrepresentations or breach of warranties contained in this
Agreement, except for rights and claims arising from fraud.

                                   ARTICLE IX

                                   TAX MATTERS

              SECTION 9.01 TAX RETURNS

              (a)    The Seller  shall have the  exclusive  authority to prepare
and file or cause to be  prepared  and filed (i) all Tax Returns for all members
of the Company  Group for all Taxable  years or periods  ending on or before the
Closing Date  including any Estimated Tax Returns due on or prior to the Closing
Date,  (ii) all  consolidated  federal  Income Tax  Returns of the Pitney  Bowes
Consolidated Group, (iii) any other Combined Tax Return, and (iv) any Tax Return
of any member of the Pitney Bowes Group.

                                      -54-
<PAGE>


              (b)    The Purchaser  shall prepare (in  accordance  with the past
practices of the Company and its subsidiaries) the initial draft of all Straddle
Period Tax Returns of the Company and its subsidiaries (other than Estimated Tax
Returns due on or prior to the Closing  Date) and shall submit such Tax Returns,
along  with a  calculation  of the  Seller's  portion of any  Pre-Closing  Taxes
(reduced by any Prepaid Taxes) set forth on such Tax Returns,  to the Seller for
approval no later than thirty (30) days prior to the due date thereof.  No later
than fifteen (15) days after the receipt of such Tax Return from the  Purchaser,
the Seller shall notify the Purchaser of any  reasonable  objections  the Seller
may have to items set forth in such draft Tax Returns and/or the  calculation of
such Taxes for which the Seller is  responsible.  The Purchaser and Seller agree
to consult and resolve in good faith any such objection, it being understood and
agreed that in the absence of any such  resolution,  any and all such objections
shall be resolved in a manner consistent with the past practices of with respect
to such items unless otherwise  required by law. If the Seller and the Purchaser
cannot  resolve  such  matter,  the  issue  involved  shall be  submitted  to an
independent  public  accounting  firm  acceptable  to both  the  Seller  and the
Purchaser;  PROVIDED,  HOWEVER,  that if the dispute or disagreement  involves a
matter of legal  interpretation,  then upon the written  consent of both parties
such  dispute  shall be resolved by such  independent  public  accounting  firm,
otherwise such independent  accounting firm shall select an outside attorney (1)
experienced in federal income tax law and (2) mutually  acceptable to the Seller
and the  Purchaser  (which  acceptance  shall not be  unreasonably  withheld) to
resolve such dispute or  disagreement.  If the Seller and the  Purchaser  cannot
agree on an  independent  public  accounting  firm,  the first  Big Four  Public
Accounting Firm (on an alphabetical  basis) that is not currently serving as the
auditor of any of the Seller,  Company or Purchaser shall be selected to resolve
the dispute.  The decision of the  independent  public  accounting firm (and any
outside  attorney  selected by such  accounting  firm) in resolving  the dispute
shall be final and binding.  The fees and expenses  incurred with respect to the
independent  public  accounting  firm  resolving  the dispute shall be allocated
fifty percent (50%) to the Seller and fifty percent (50%) to the Purchaser.  All
other fees and expenses  incurred in resolving the dispute shall be borne by the
party hereto that incurs such fees and expenses.  All such Tax Returns shall not
be filed without the prior written consent of the Seller, such consent not to be
unreasonably withheld, conditioned or delayed.

              (c)    For purposes of this Agreement, Taxes related to a Straddle
Period  shall  be  apportioned  between  the  Pre-Closing  Tax  Period  and  the
Post-Closing Tax Period as follows:  (A) in the case of Taxes other than income,
sale and use and  withholding  Taxes, on a per-diem basis and (B) in the case of
income,  sales and use and  withholding  Taxes, as determined from the books and
records of the Seller, the Company and/or the relevant  subsidiary as though the
taxable  year  of  the  Seller,  the  Company  and/or  the  relevant  subsidiary
terminated at the close of business on the Closing Date.

              (d)    The Purchaser shall have the exclusive authority to prepare
and file or cause to be  prepared  and filed all Tax  Returns for all members of
the Company Group for Taxable years or periods beginning after the Closing Date.

              (e)    The  Seller  and the  Purchaser  agree  that  Combined  Tax
Returns  and Income Tax Returns  filed for tax  periods  that begin prior to the
Closing  Date will reflect a short  taxable  year for the Company  ending on the
Closing Date in any state, local or foreign taxing

                                      -55-
<PAGE>


jurisdiction  in which  such tax year is  allowed  by  administrative  practice,
whether or not required by law.

              (f)    Each Party  hereto  shall bear all costs  incurred by it in
preparing  and  filing  the Tax  Returns  they are  responsible  for under  this
Agreement.

              SECTION 9.02 PAYMENT OF TAXES. (a) the Seller shall be responsible
and  liable  for the  timely  payment  of any and all Taxes  imposed  on or with
respect  to the  properties,  income  and  operations  of the  Company  and  its
subsidiaries  for all Pre-Closing  Periods,  to the extent such Taxes exceed the
amount of liability accrued for such Taxes on the Estimated Closing Date Balance
Sheet of the Company and its subsidiaries as of the Closing Date.

              (b)    The Seller will pay the Seller's portion of the Pre-Closing
Taxes related to a Straddle Period Tax Return (as determined pursuant to 9.01(b)
above) no later  than the later of: one (1) day prior to the due date of the Tax
Return for which such  Taxes  relate to the extent the Seller and the  Purchaser
have  reached an  agreement on the amount of such Taxes by that date or the only
dispute relates solely to the total amount of Tax shown on the Tax Return and in
the case of a dispute  between the Seller and the Purchaser  that solely relates
to the  percentage  of the total amount of Tax shown on the Straddle  Period Tax
Return allocated to the Seller, the Seller shall pay (i) the amount it believes,
in good faith,  is its allocable  portion of such Taxes within one (1) day prior
to the due date of the Tax  Return  for which  such  Taxes  relate  and (ii) the
remainder,  if  any,  determined  to be owed by the  Seller  by the  independent
accounting  firm described in paragraph (b) above within two (2) days after such
accounting  firm has  determined  the  Seller's  liability  with respect to such
amounts.  In the event a payment is made  pursuant  to this  paragraph  (c) with
respect to amounts that are in dispute,  such payment will be adjusted following
the resolution of the dispute.

              (c)    All  transfer,  sales and use,  value added,  registration,
documentary,  stamp and similar Taxes (the  "Transfer  Taxes")  arising from the
sale of the Shares  under  Section  2.01(a)  hereof or the deemed sale of assets
under Section 338(h)(10) shall be paid by the Purchaser.

              (d)    To the extent the  Prepaid  Taxes  exceed the Taxes owed by
the Seller for such Straddle  Period (as determined  pursuant to Section 9.01(b)
above)), the Purchaser shall pay the Seller such excess.

              (e)    No member of the Company  Group  shall  carry back  losses,
credits or other Tax Attributes  attributable  to a  Post-Closing  Tax Period to
offset Taxes attributable to any Pre-Closing Tax Period.

              SECTION 9.03 AUDITS AND CONTESTS. (a) The Purchaser shall promptly
notify the Seller in writing upon receipt by the  Purchaser or any  affiliate of
the Purchaser  (including the Company or any member of the Company Group) of any
communication  with  respect  to any Tax Matter (or  pending or  threatened  Tax
Matter) relating to any Tax period beginning on or before the Closing Date or to
the Specified  Leases.  The Purchaser  shall  include with such  notification  a
complete  copy of any written  communication  received by the  Purchaser  or any
affiliate of the Purchaser  (including  the Company or any member of the Company
Group) in respect of such

                                      -56-
<PAGE>


Tax Matter.  The failure of the Purchaser to promptly forward such  notification
in accordance  with the  immediately  preceding  sentence  shall not relieve the
Seller of any  obligation  under this  Agreement,  except to the extent that the
failure to promptly forward such notification actually prejudices the ability of
the Seller to contest such Tax Matter.

              (b)    The Seller (or such member of the Pitney Bowes Group as the
Seller shall  designate) shall have the sole right to represent the interests of
the members of the Pitney Bowes Group and the members of the Company  Group,  to
employ  counsel of its choice at its expense and to make  decisions with respect
to settlements in any Tax Matter relating to (A) any consolidated federal Income
Tax Returns of the Pitney Bowes Consolidated Group, (B) any Combined Tax Return,
(C) any Tax Return of any member of the Pitney Bowes Group,  (D) any Tax Returns
for all members of the Company Group for all taxable years or periods  ending on
or before the Closing Date and (E) the elections  contemplated by this Agreement
under Section 338(h)(10) of the Code or under any analogous  provisions of state
or local law.

              (c)    The  Purchaser  (or such member of the Company Group as the
Purchaser shall  designate) shall have the sole right to represent the interests
of the  members of the  Company  Group,  to employ  counsel of its choice at its
expense and to make  decisions  with  respect to  settlements  in any Tax Matter
relating  to any Tax  Returns of the  Company or its  subsidiaries  relating  to
Post-Closing Taxable Periods (other than Straddle Period Tax Returns); PROVIDED,
HOWEVER,  that, to the extent that such Tax Matter involves any issue that could
materially  affect the amount of Taxes for which any member of the Pitney  Bowes
Group is liable in a Pre-Closing  Tax Period (or for other Taxes with respect to
which the Seller is  required to  indemnify  the  Purchaser  pursuant to Section
9.07(a)),  the  Purchaser  shall (i) keep the Seller  informed  of all  material
developments relating to such Tax Matter; (ii) act in a reasonable manner and in
good  faith in  discussing  such  issue  with the  relevant  tax  authority  and
contesting  such Tax  Matter;  and  (iii)  contest,  and  shall  not  settle  or
compromise  such Tax Matter unless the Purchaser  reasonably  determines in good
faith  that (x)  based on  discussions  with tax  counsel,  such  settlement  or
compromise is an  appropriate  resolution of such Tax Matter taking into account
only the applicable  facts,  applicable law and hazards and costs of controversy
in respect of such Tax Matter  standing  alone and (y) the Purchaser  would find
such  settlement  acceptable if the Purchaser  (and not any member of the Pitney
Bowes Group) were  required to bear the tax  consequences  of the  settlement of
such Tax Matter for all relevant Tax periods.

              (d)    The Seller (or such member of the Pitney Bowes Group as the
Seller shall  designate) shall have the sole right to represent the interests of
the members of the Pitney  Bowes Group and the members of the Company  Group and
to employ counsel of its choice in any Tax Matter related to any Straddle Period
Tax  Return.  The Seller  shall have  absolute  discretion  with  respect to any
decisions to be made,  or the nature of any action to be taken,  with respect to
any Tax  Matter  related  to a  Straddle  Period  Tax  Return  described  in the
preceding sentence;  PROVIDED,  HOWEVER, with respect to Tax Matters that affect
the Company's Tax liability, (i) the Seller shall keep the Purchaser informed of
all material developments and events relating to such matters to the extent they
affect  the  Company's  Tax  liability,  (ii) at its own cost and  expense,  the
Purchaser  shall have the right to  participate  in the  defense of any such tax
claim,  and (iii) neither the Seller nor the Purchaser  shall take any action in
respect of such  claim  without  the  consent of the other  party  hereto,  such
consent not to be unreasonably withheld, conditioned or delayed.

                                      -57-
<PAGE>


              SECTION  9.04  THIRD  PARTY  INDEMNITIES.  (a) If a member  of the
Company  Group has the right to receive (or actually  receives) a payment from a
Person  that  is not a  member  of the  Company  Group  (whether  by  reason  of
indemnity,  reimbursement  agreement  or  otherwise)  with  respect to (or items
related to) (i) Pre-Closing Taxes of a member of the Company Group or (ii) Taxes
of a member of the Pitney  Bowes  Group in each case,  other than such Taxes for
which the  Purchaser is liable under this  Agreement,  such payment shall be for
the account of the Seller and the  Purchaser  shall pay to the Seller the amount
of any such  payment  within ten (10) days after a member of the  Company  Group
receives such payment.  The Purchaser shall use all reasonable efforts to obtain
any payment described in the preceding  sentence;  PROVIDED,  HOWEVER,  that the
Seller  shall pay or promptly  reimburse  the  Purchaser  for all  Out-of-Pocket
Expenses  incurred in such attempt.  To the extent it is legally permitted to do
so, the Purchaser  shall cause the Company to assign to the Seller all rights to
receive such  payment,  including  any rights to enforce such payment (and shall
take all actions to facilitate such  assignment,  such as providing any required
notice to any Person and executing any  documents) so long as the Seller pays or
promptly  reimburses  the  Purchaser  for  all  Out-of-Pocket  Expenses  related
thereto.  If the  Purchaser  is unable to cause the Company to assign all of its
rights to such  payment,  the  Purchaser  shall permit the Seller to control all
aspects of the  enforcement  of such rights and shall  cooperate with the Seller
consistent  with the  principles set forth in Section 9.05 hereof so long as the
Seller pays or promptly reimburses the Purchaser for all Out-of-Pocket  Expenses
related thereto.

              (b)    If a member of the Pitney  Bowes  Group has the right to
receive (or  actually  receives) a payment from a Person that is not a member of
the Pitney Bowes Group (whether by reason of indemnity,  reimbursement agreement
or  otherwise)  with  respect to (or items  related to) Taxes of a member of the
Company  Group for any  Post-Closing  Tax Period other than such Taxes for which
the Seller is liable under this Agreement, such payment shall be for the account
of the Company and the Seller shall pay to the  Purchaser the amount of any such
payment  within ten (10) days after a member of the Pitney Bowes Group  receives
such payment.  The Seller shall use all reasonable efforts to obtain any payment
described in the preceding sentence; PROVIDED, HOWEVER, that the Purchaser shall
pay or promptly reimburse the Seller for all Out-of-Pocket  Expenses incurred in
such attempt.  To the extent it is legally  permitted to do so, the Seller shall
assign (or cause to be  assigned)  to the  Company  all  rights to receive  such
payment,  including  any  rights to  enforce  such  payment  (and shall take all
actions to facilitate such assignment,  such as providing any required notice to
any  Person  and  executing  any  documents)  so long as the  Purchaser  pays or
promptly  reimburses the Seller for all Out-of-Pocket  Expenses related thereto.
If the Seller is unable to assign all of its rights to such payment,  the Seller
shall  permit the  Purchaser to control all aspects of the  enforcement  of such
rights and shall cooperate with the Purchaser consistent with the principles set
forth  in  Section  9.05  hereof  so long  as the  Purchaser  pays  or  promptly
reimburses the Seller for all Out-of-Pocket Expenses related thereto.

              SECTION 9.05 COOPERATION.  (a) Beginning on the Closing Date, each
of the Seller  and the  Purchaser,  on behalf of itself  and each  member of the
Pitney Bowes Group and the Company Group, respectively, agrees to use good faith
efforts to provide the other party hereto with such  cooperation  or information
as such other party  hereto  reasonably  shall  request in  connection  with the
determination of any payment or any calculations described in this

                                      -58-
<PAGE>


Agreement,  the preparation or filing of any  Pre-Closing  Tax Return,  Straddle
Period Tax  Return,  Tax Return  related to any Tax period  beginning  after the
Closing  Date or claim  for  refund,  or the  conduct  of any Tax  Matter.  Such
cooperation  and information  shall include,  without  limitation  preparing and
submitting to the Seller (in a time frame consistent with past practice), at the
Purchaser's  expense,  all information  within the Company's  possession and not
otherwise  reasonably  available to the Seller that the Seller shall  reasonably
request,  in such form as the Seller  shall  reasonably  request,  to enable the
Seller to prepare any Tax Returns required to be filed by the Seller pursuant to
Section 9.01.

              (b)    Any request for  information or documents  pursuant to this
Section 9.05 shall be made by the requesting  party in writing.  The other party
hereto shall promptly (and in no event later than thirty (30) days after receipt
of the request) provide the requested information.  Except as otherwise provided
in paragraph (a), the requesting  party shall  indemnify the other party for any
Out-of-Pocket  Expenses  incurred by such party in connection with providing any
information  or  documentation  pursuant to this Section 9.05.  Upon  reasonable
notice,  each of the Seller and the Purchaser shall make its, or shall cause the
members of the Pitney Bowes Group or the Company Group,  as applicable,  to make
their,  employees and  facilities  available on a mutually  convenient  basis to
provide  explanation of any documents or  information  provided  hereunder.  Any
information obtained under this Section 9.05 shall be kept confidential,  except
as otherwise  reasonably  may be necessary in connection  with the filing of Tax
Returns or claims for refund or in conducting any Tax Matter.

              SECTION 9.06  RETENTION  OF RECORDS AND RETURNS.  (a) For at least
seven (7) years  following the Closing Date,  each party hereto will retain such
records,  documents,  accounting data and other information  (including computer
data) in its possession in the ordinary course of business reasonably  necessary
for (i) the  preparation  and filing of all Pre-Closing Tax Returns and Straddle
Period Tax  Returns  required  to be filed by, on behalf of, or with  respect to
another party hereto,  and (ii) any Tax Matters relating to such Pre-Closing Tax
Returns, Straddle Period Tax Returns, or to any Pre-Closing Taxes payable by, on
behalf of, or with respect to, another party hereto.

              (b)    The parties hereto shall,  from and after the Closing Date,
preserve all Tax Materials for such seven (7) year period, and, thereafter,  not
destroy  or  dispose  of or allow the  destruction  or  disposition  of such Tax
Materials  without first having offered in writing to deliver such Tax Materials
to the other party hereto at such other party's  hereto  expense.  If such party
fails to request such Tax Materials within ninety (90) days after receipt of the
notice described in the preceding  sentence,  the other party hereto may dispose
of such Tax Materials.

              SECTION 9.07  INDEMNIFICATION  FOR TAXES.  (a) The Seller shall be
liable for and shall  indemnify,  defend and hold  harmless the  Purchaser on an
after-tax basis against (i) all Pre-Closing  Taxes of the Company and members of
the  Company  Group,  and (ii) all Income  Taxes  incurred  by or imposed on the
Company or the Company  Group solely as a result of the  provisions  of Treasury
Regulations  Section  1.1502-6 or the  similar or  analogous  provisions  of any
state,  local or foreign law with respect to any period  during which the Seller
and the Company filed a Combined Tax Return.

                                      -59-
<PAGE>


              (b)    The  Purchaser  shall be liable  for and  shall  indemnify,
defend and hold  harmless the Seller and members of the Pitney Bowes Group on an
after-tax  basis  against,  (i) all Transfer  Taxes arising from the sale of the
Shares under Section  2.01(a)  hereof or the deemed sale of assets under Section
338(h)(10)  of the Code,  (ii) all  Post-Closing  Taxes that are  incurred by or
imposed on the Company Group and (iii) any Taxes resulting from the Purchaser or
an Affiliate of the Purchaser  making an election  under  Section  338(g) of the
Code  other  than  a  deemed   election  under  Treasury   Regulations   Section
1.338(h)(10)-1(c)(4).

              (c)    The Purchaser shall have no right to  indemnification  from
the Seller for any Losses  incurred  by the  Purchaser  in  connection  with any
restructuring  involving  PBG Holdings  Inc.  ("PBG  HOLDINGS") or its direct or
indirect  shareholders  that results in PBG  Holdings  becoming a member for the
Pitney Bowes  Consolidated  Group (the "PBG  RESTRUCTURING") or as a result of a
Section 338 election for PBG Holdings not being  effective.  The Purchaser shall
be liable  for and shall  indemnify,  defend  and hold  harmless  the Seller and
members of the Pitney Bowes Group for any Tax or liability  (including any costs
and expenses incurred by the Seller in connection with defending any third party
claims)  resulting  from  (i) the PBG  Restructuring,  or (ii)  the  sale of PBG
Holdings failing to be eligible for an election under Section  338(h)(10) of the
Code;  PROVIDED,  that the maximum aggregate liability of the Purchaser pursuant
to this Section  9.07(c)  shall be Seven Million Five Hundred  Thousand  Dollars
($7,500,000.00).

ARTICLE X

                                  MISCELLANEOUS

              SECTION 10.01.  SURVIVAL. The representations and warranties given
by the  parties in Article III and  Article IV and the  indemnities  provided in
Sections  8.01(a)(i)(iii)  and  8.01(a)(iv)  shall survive the Closing until the
first  anniversary of the Closing Date, at which time such  representations  and
warranties and indemnities will terminate,  PROVIDED,  that the  representations
and warranties contained in Section 3.09 (Employee Benefit Plans),  Section 3.15
(Environmental  Matters)  and  Section  3.17  (Taxes)  shall  survive  until the
expiration of the applicable statute of limitations and, PROVIDED, FURTHER, that
the  representations and warranties  contained in Sections 3.01  (Organizational
and  Standing),  3.02(a)  (Ownership  of Shares),  Section 3.03  (Authorization;
Enforceability),   Section   3.04  (No   Violation;   Consents),   Section  3.18
(Financing), Section 4.01 (Organization; Authorization; Enforceability), Section
4.03  (Purchase  for  Investment),  Section 4.04 (No  Violation;  Consents)  and
Section  4.07  (Antitrust)   shall  survive   indefinitely  and  not  terminate.
Notwithstanding the foregoing, (i) those agreements and covenants of the parties
contained in Sections 2.01,  2.02 and 2.03,  Article V, Article VI, Article VIII
(except the indemnities in Sections  8.01(a)(iii)  and  8.01(a)(iv)  which shall
only  survive  until the first  anniversary  of the  Closing  Date as  described
above),  Article IX and this Article X and expressly requiring performance after
the Closing Date shall survive the Closing Date and (ii) Sections 10.02,  10.04,
10.05,  10.06,  10.07,  10.11,  10.12,  10.13, 10.14 and 10.16 shall survive the
Closing Date. The  Confidentiality  Agreement and Section 6.04 shall survive any
termination of this Agreement.

                                      -60-
<PAGE>


              SECTION 10.02. NOTICES. All notices, demands, requests,  consents,
approvals or other communications required or permitted to be given hereunder or
which are given with respect to this Agreement  shall be in writing and shall be
personally  served,  delivered  by  reputable  air courier  service with charges
prepaid,  or  transmitted  by  hand  delivery,  telegram,  telex  or  facsimile,
addressed as set forth below,  or to such other address as such party shall have
specified most recently by written  notice.  Notice shall be deemed given on the
date of service or transmission if personally served or transmitted by telegram,
telex or facsimile.  Notice  otherwise  sent as provided  herein shall be deemed
given on the next Business Day following  delivery of such notice to a reputable
air courier service.

              To the Seller:

                     Pitney Bowes Inc.
                     One Elmcroft Road
                     Stamford, CT  06926
                     Attn:  Michele Mayes
                     Telephone:  (203) 351-7924
                     Fax:  (203) 351-7984

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

                     White & Case LLP
                     1155 Avenue of the Americas
                     New York, New York 10036
                     Attn:  Mark L. Mandel, Esq.
                     Telephone:  (212) 819-8200
                     Fax:  (212) 354-8113

              To the Purchaser:

                     JCC Management LLC
                     c/o Cerberus Capital Management, L.P.
                     299 Park Avenue
                     New York, NY  10171
                     Attention:  W. Brett Ingersoll
                     Telephone:  (212) 891-2100
                     Fax:  (212) 891-1540

                                      -61-
<PAGE>


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

                     Schulte Roth & Zabel LLP
                     919 Third Avenue
                     New York, New York 10022
                     Attn:  Robert R. Kiesel, Esq.
                     Telephone:  (212) 756-2000
                     Fax:  (212) 593-5955

              and to

                     Watson Farley and Williams
                     100 Park Avenue
                     New York, NY 10017
                     Attn. Stephen Millman, Esq.
                     Telephone: (212) 922-2205
                     Fax: (212) 864-1396


              SECTION 10.03. TERMINATION. (a) This Agreement may be terminated:

              (i)    at  any  time  prior  to  the  Closing  by  mutual  written
       agreement of the Seller and the Purchaser;

              (ii)   by either the Seller or the Purchaser, if the Closing shall
       not have occurred on or prior to July 14, 2006 (the "TERMINATION  DATE");
       PROVIDED  that the  Seller  shall  not have the right to  terminate  this
       Agreement  under  this  Section  10.03(a)(ii)  until  the  later  of  the
       Termination  Date and the  expiration  of the fifteen  (15)  calendar day
       period after delivery of the Update Notice, if any;  notwithstanding  the
       foregoing  or  anything  else herein to the  contrary,  if (i) all of the
       conditions set forth in Section 7.02 have been  satisfied  other than (x)
       the  condition set forth in Section  7.02(g) and (y) any other  condition
       set  forth in  Section  7.02 to the  extent  that such  condition  is not
       satisfied  due to the failure of the  Internal  Restructuring,  the PBGFS
       Contribution,  the Company  Contribution and the PBGFS Distribution to be
       consummated, and (ii) the Seller shall have delivered to the Purchaser on
       or prior to the Termination Date a certificate from an executive  officer
       of the Seller  certifying  that all such  conditions have been satisfied,
       the Seller shall have the option,  in its sole  discretion (the "SELLER'S
       OPTION"),  to extend  the  Termination  Date until  August 28,  2006 (the
       "EXTENDED  TERMINATION DATE") in order to satisfy the condition set forth
       in Sections 7.01(e) and 7.02(g) hereof, in which case the Purchaser shall
       not have  the  right to  terminate  this  Agreement  under  this  Section
       10.03(a)(ii) until the Extended Termination Date;

              (iii)  by either the Seller or the Purchaser,  if any Governmental
       Authority  shall  have  issued a  nonappealable  Order or taken any other
       action  having  the  effect  of  permanently  restraining,  enjoining  or
       otherwise  prohibiting  the Closing or the  transactions  contemplated by
       this Agreement;

                                      -62-
<PAGE>


              (iv)   by the  Seller  if a third  party,  including  any group of
       Persons, shall have made a Superior Proposal and the Seller has taken any
       of the actions referred to in clauses (i) or (ii) of Section 5.05(c) (but
       only  after  complying  with  the  requirements  of  clauses  (x) and (y)
       thereof)  prior  to any  termination  of this  Agreement;  PROVIDED  that
       simultaneously with exercising its rights hereunder the Seller shall have
       paid, and the Purchaser shall have received, the Termination Payment;

              (v)    by the  Purchaser if a third party,  including any group of
       Persons, shall have made a Superior Proposal and the Seller has taken any
       of the  actions  referred  to in clauses  (i) or (ii) of Section  5.05(c)
       prior to termination of this Agreement;

              (vi)   by the Seller upon a material  breach or  violation  of any
       representation,  warranty,  covenant  or  agreement  on the  part  of the
       Purchaser set forth in this  Agreement,  which breach or violation  would
       result in the failure to (A) satisfy the conditions set forth in Sections
       7.01 (except for the  condition in Sections  7.01(d),  which are provided
       for in other  applicable  provisions  of this  Section  10.03(a))  or (B)
       consummate the  Transactions  except that, if such breach or violation is
       curable  by the  Purchaser  through  the  exercise  of  its  commercially
       reasonable  efforts,  then,  for a period of up to thirty  (30)  calendar
       days, but only as long as the Purchaser continues to use its commercially
       reasonable  efforts to cure such breach or violation (the "PURCHASER CURE
       PERIOD"),   such   termination   shall   not  be   effective,   and  such
       termination shall become effective only if the breach or violation is not
       cured within the Purchaser Cure Period;

              (vii)  by the Purchaser upon a material breach or violation of any
       representation, warranty, covenant or agreement on the part of the Seller
       set forth in this  Agreement,  which breach or violation  would result in
       the  failure to (A)  satisfy the  conditions  set forth in Sections  7.02
       (except for the conditions in Sections 7.02(d), which are provided for in
       other applicable  provisions of this Section  10.03(a)) or (B) consummate
       the  Transactions  except that, if such breach or violation is curable by
       the Seller through the exercise of its commercially  reasonable  efforts,
       then,  for a period of up to thirty (30) calendar  days, but only as long
       as the Seller  continues to use its  commercially  reasonable  efforts to
       cure  such  breach  or  violation  (the  "SELLER  CURE   PERIOD"),   such
       termination  shall not be effective,  and such  termination  shall become
       effective  only if the breach or violation is not cured within the Seller
       Cure Period; or

       (b)    In the event this Agreement is duly terminated:

              (i)    by (A) the  Purchaser  or the  Seller  at a time  when such
       party is entitled to terminate this Agreement in accordance  with Section
       10.03(a)(ii)  or (B) the  Purchaser  when the  Purchaser  is  entitled to
       terminate this Agreement in accordance with Section  10.03(a)(vii),  then
       the Seller shall pay in cash to the Purchaser,  within three (3) Business
       Days  following the later of (x) the date of such  termination or (y) the
       receipt by the Seller of invoices  evidencing such expenses,  such amount
       of actual  expenses  incurred by the  Purchaser in  connection  with this
       Agreement and the Transactions in an amount not to exceed  $12,500,000.00
       (the "EXPENSE REIMBURSEMENT");

                                      -63-
<PAGE>


              (ii)   (A) by the Purchaser in accordance with Section 10.03(a)(v)
       or (B) the  Seller in  accordance  with  Section  10.03(a)(iv),  then the
       Seller shall pay an amount equal to the sum of the Expense  Reimbursement
       plus $7,500,000.00  (the "TERMINATION  PAYMENT") in cash to the Purchaser
       simultaneously  with the  termination  of this Agreement by such party as
       contemplated hereby;

              (iii)  by the Purchaser or the Seller in  accordance  with Section
       10.03(a)(ii),  then if, within twelve (12) months after this Agreement is
       terminated  in  accordance  with  Section  10.03(a)(ii)  on or after  the
       Termination  Date in the event the Seller's Option is not exercised,  the
       Seller  enters  into  an  agreement  with  respect  to a  sale  of all or
       substantially  all  of the  Business  in a  transaction  or a  series  of
       transactions,  the Seller shall pay in cash to the  Purchaser,  not later
       than the date on which such sale is consummated, the Termination Payment;
       or

              (iv)   by the Purchaser or the Seller in  accordance  with Section
       10.03(a)(ii),  then if, within twelve (12) months after this Agreement is
       terminated  in  accordance  with  Section  10.03(a)(ii)  on or after  the
       Extended  Termination Date in the event the Seller's Option is exercised,
       the Seller  enters  into an  agreement  with  respect to a sale of all or
       substantially  all  of the  Business  in a  transaction  or a  series  of
       transactions,  the Seller shall pay in cash to the  Purchaser,  not later
       than  the  date on  which  such  agreement  is  executed  by the  Seller,
       $8,500,000.00.

       As used in this Section 10.03(b),  a "sale of all or substantially all of
       the  Business"  shall  mean a sale of 51% or more  of the  assets  of the
       Business  in a  transaction  or a series of  transactions  whether or not
       related.

              SECTION 10.04. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY,
INTERPRETED UNDER, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK,  REGARDLESS  OF THE LAWS THAT  MIGHT  OTHERWISE  GOVERN  UNDER  APPLICABLE
PRINCIPLES OF CONFLICTS OF LAW THEREOF.

              SECTION 10.05.  WAIVER OF JURY TRIAL.  EACH PARTY HEREBY WAIVES TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY IN RESPECT TO ANY  LITIGATION  DIRECTLY  OR  INDIRECTLY  ARISING OUT OF,
UNDER OR IN CONNECTION  WITH THIS  AGREEMENT,  ANY OTHER EQUITY  DOCUMENT OR ANY
TRANSACTION  CONTEMPLATED  HEREBY OR THEREBY.  EACH PARTY (A) CERTIFIES  THAT NO
REPRESENTATIVE OF ANY OTHER PARTY HAS REPRESENTED,  EXPRESSLY OR OTHERWISE, THAT
SUCH OTHER  PARTY  WOULD NOT,  IN THE EVENT OF  LITIGATION,  SEEK TO ENFORCE THE
FOREGOING WAIVER AND (B) ACKNOWLEDGES  THAT IT AND THE OTHER PARTIES HERETO HAVE
BEEN INDUCED TO ENTER INTO THIS  AGREEMENT  AND THE OTHER EQUITY  DOCUMENTS  BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 10.05.

                                      -64-
<PAGE>


              SECTION 10.06.  ATTORNEY FEES. A party in breach of this Agreement
shall,  on demand,  indemnify  and hold harmless the other party for and against
all reasonable out-of-pocket expenses, including reasonable legal fees, incurred
by such other party by reason of the  enforcement  and  protection of its rights
under this  Agreement.  The payment of such expenses is in addition to any other
relief to which such other party may be entitled.

              SECTION 10.07.  ENTIRE  AGREEMENT.  This Agreement  (including all
agreements  entered into pursuant  thereto and all  certificates and instruments
delivered  pursuant  thereto)  constitute  the entire  agreement  of the parties
hereto with respect to the subject matter hereof and supersede and terminate all
prior   and   contemporaneous   agreements,   representations,   understandings,
negotiations  and  discussions  between  the  parties  hereto,  whether  oral or
written,  with  respect  to  the  subject  matter  hereof,  including,   without
limitation,  that certain Subscription Agreement, dated as of March 31, 2005 (as
the same may have been amended from time to time, the "SUBSCRIPTION AGREEMENT"),
by and between the Company and the Purchaser,  and the Purchaser, the Seller and
the Company agree and acknowledge  that the Purchaser and the Company shall have
no rights,  claims,  remedies,  interests or  obligations  of any kind under the
Subscription Agreement. The Purchaser hereby fully releases,  acquits, satisfies
and  forever  discharges  the  Company  and  the  Seller  and  their  respective
Representatives,  and each of the Company and the Seller hereby fully  releases,
acquits, satisfies and forever discharges the Purchaser and its Representatives,
of and from all manner of action and actions, cause and causes of action, suits,
debts, dues, sums of money,  accounts,  reckonings,  bonds, bills,  specialties,
covenants,   contracts,   controversies,    agreements,   promises,   variances,
trespasses,  damages,  judgments,  executions,  claims,  demands and liabilities
whatsoever,  in law or in  equity,  resulting  from,  or  arising  out  of,  the
Subscription Agreement, which from the beginning of the world to the date hereof
such Person ever had, now has, or shall or may have in the future.

              SECTION 10.08.  MODIFICATIONS  AND  AMENDMENTS.  (a) No amendment,
modification  or termination  of this Agreement  shall be binding upon any party
unless executed in writing by the parties hereto intending to be bound thereby.

              SECTION 10.09. WAIVERS AND EXTENSIONS. Subject to Section 3.25(c),
any party to this  Agreement may waive any condition,  right,  breach or default
that such party has the right to waive;  PROVIDED,  that such waiver will not be
effective  against the waiving party unless it is in writing,  is signed by such
party, and specifically refers to this Agreement. Waivers may be made in advance
or after the right  waived  has  arisen or the  breach  or  default  waived  has
occurred. Subject to Section 3.25(c), any waiver may be conditional.  Subject to
Section 3.25(c), no waiver of any breach of any agreement or provision contained
herein shall be deemed a waiver of either of any preceding or succeeding  breach
thereof or of any other agreement or provision  herein  contained.  No waiver or
extension of time for  performance of any  obligations or acts shall be deemed a
waiver or  extension of the time for  performance  of any other  obligations  or
acts.

              SECTION 10.10.  EXHIBITS AND  SCHEDULES.  Each of the exhibits and
schedules  ("Schedules")  referred to herein and attached  hereto is an integral
part of this Agreement and is incorporated herein by reference.

              SECTION  10.11.  EXPENSES;  BROKERS.  (a)  Except as  provided  in
Section  10.06  and  Section  10.11(b),  all  costs  and  expenses  incurred  in
connection  with this Agreement or the

                                      -65-
<PAGE>


Transactions  shall be paid by the party  incurring  such  costs  and  expenses,
whether or not the  Transactions  shall be  consummated,  including all fees and
expenses of its legal counsel, financial advisors and accountants.

              (b)    Other  than  the use of  JPMorgan  Securities  Inc.  by the
Seller and Lehman  Brothers and IXIS Capital  Markets by the Purchaser,  each of
the parties  represents  to the other that neither it nor any of its  Affiliates
has used a broker or other  intermediary in connection with the Transactions for
whose fees or expenses any other party will be liable.

              (c)    The   parties   acknowledge   that  each  of  the   Expense
Reimbursement and the Termination Payment provided for in Section 10.03(b) is an
integral  part of the  Transactions  and not a penalty,  and that,  without  the
Expense  Reimbursement  and  Termination  Payment the  Purchaser  would not have
entered into this Agreement.

              (d)    Nothing in this Section  10.11 shall be deemed to limit any
liability of any party for any breach in any material  respect of any provisions
of this Agreement that remain in effect after the termination of this Agreement.
The Seller shall indemnify the Purchaser,  and the Purchaser shall indemnify the
Seller,  against,  and each of them  agrees to hold the  other of them  harmless
from,  all losses,  liabilities  and  expenses  (including,  but not limited to,
reasonable fees and expenses of counsel and costs of investigation)  incurred as
a result of any claim by anyone for compensation as a broker, a finder or in any
similar  capacity by reason of services  allegedly  rendered to the indemnifying
party in connection with the Transactions.

              SECTION 10.12. PRESS RELEASES AND PUBLIC ANNOUNCEMENTS. All public
announcements or public disclosures relating to the Transactions or the Internal
Restructuring  shall be made only if mutually  agreed upon by the Seller and the
Purchaser,  except to the extent such  disclosure is required by law or by stock
exchange regulation;  PROVIDED, that (a) to the extent reasonably practicable, a
party hereto shall provide the other party hereto with a reasonable  opportunity
to review any public announcement prior to its release, (b) no such announcement
or disclosure (except as required by law or by stock exchange  regulation) shall
identify the Purchaser without the Purchaser's prior consent.

              SECTION 10.13. ASSIGNMENT; NO THIRD PARTY BENEFICIARIES.  (a) This
Agreement and the rights,  duties and obligations  hereunder may not be assigned
or delegated, in whole or in part, by any party hereto without the prior written
consent of the other party hereto; PROVIDED,  HOWEVER, that, subject to the last
sentence of this Section  10.13(a),  the Purchaser may assign this Agreement and
its rights,  duties and obligations  hereunder to any of its Affiliates  without
the prior written consent of the Seller;  PROVIDED  FURTHER,  that the Purchaser
may, without the prior written consent of the Seller,  grant Liens in respect of
its rights and  interests  hereunder  to its  lenders,  and the  parties  hereto
consent to any  exercise  by such  lenders of their  rights  and  remedies  with
respect to such collateral; PROVIDED FURTHER that any such grant of Liens to the
Purchaser's  lenders  pursuant to the  preceding  proviso  shall not relieve the
Purchaser of its duties or obligations hereunder. Each assignee (pursuant to the
terms and conditions of this Section 10.13) must agree in writing to be bound by
the terms of this Agreement and each of the Purchaser Transaction Documents,  if
applicable,  to the same extent, and in the same manner, as the Purchaser or the
transferring  assignee  prior to the  assignment or  delegation,  in whole or in
part, of this Agreement and the rights, duties and obligations hereunder to such
assignee. Any

                                      -66-
<PAGE>


purported  assignment or delegation of rights,  duties or obligations  hereunder
made in violation of this Section 10.13(a) shall be void and of no effect.

              (b)    This Agreement and the  provisions  hereof shall be binding
upon and shall  inure to the  benefit  of each of the  parties  hereto and their
respective  successors.  This  Agreement is not intended to confer any rights or
benefits on any Persons other than as expressly set forth in this Section 10.13,
Article VIII or Article IX hereof.

              SECTION  10.14.  SEVERABILITY.  This  Agreement  shall  be  deemed
severable,  and the  invalidity  or  unenforceability  of any term or  provision
hereof shall not affect the validity or  enforceability  of this Agreement or of
any other term or provision hereof.  Furthermore, in lieu of any such invalid or
unenforceable  term or provision,  the parties hereto intend that there shall be
added  as a part of this  Agreement  a  provision  as  similar  in terms to such
invalid  or  unenforceable  provision  as  may be  possible  and  be  valid  and
enforceable.

              SECTION  10.15.  COUNTERPARTS.  This  Agreement may be executed in
counterparts,  each of which shall be deemed an original, but all of which taken
together shall constitute one and the same instrument.

              SECTION 10.16. REMEDIES; SPECIFIC PERFORMANCE. Notwithstanding any
other  provision of this  Agreement  that may provide for a remedy,  each of the
Seller  and the  Purchaser  acknowledges  that  money  damages  would  not be an
adequate  remedy under any  Applicable Law if a party hereto fails to perform in
any  material  respect  any of its  obligations  hereunder  (including,  without
limitation,  any and all  obligations  under  Section 5.06 or Section  6.03) and
accordingly  agree that each party  hereto (in  addition to any other  remedy to
which it may be entitled under Applicable Law or in equity) shall be entitled to
seek to compel specific performance of the obligations of the other party hereto
under this  Agreement,  without the posting of any bond, in accordance  with the
terms and conditions of this  Agreement,  and if any action should be brought in
equity to enforce any of the provisions of this Agreement, no party hereto shall
raise the defense that there is an adequate remedy under Applicable Law.

              SECTION 10.17. TRANSITION SERVICES AGREEMENT.  For a period of ten
(10) calendar days  following the date hereof (the  "NEGOTIATION  PERIOD"),  the
Purchaser  and the Seller shall jointly (i) review the scope of the Services (as
such term is defined in the Transition Services Agreement)  described and listed
on the  schedules  of the  Transition  Services  Agreement  to  determine  which
Services can be deleted from such schedules and (ii) negotiate in good faith the
term for which such  Services  shall be  provided  by the Seller  following  the
Closing; PROVIDED, that in no event shall the term of any Service to be provided
pursuant to the Transition Services Agreement exceed a period of nine (9) months
commencing on the Closing Date.  All other terms and  conditions  for transition
services shall be as set forth in the  Transition  Services  Agreement  attached
hereto as  EXHIBIT  B and are not  subject  to  further  negotiation.  If by the
expiration of the Negotiation Period the Purchaser and the Seller cannot resolve
any  differences  that they may have  with  respect  to the scope of  transition
services  to be  provided  and term  thereof,  the term for all  Services  to be
provided pursuant to the Transition  Services Agreement shall be for a term of 6
months and the Transition  Services Agreement attached hereto as EXHIBIT B shall
be modified  accordingly and thereafter shall be deemed final, and delivery of a
fully  executed  copy of such  agreement to the  Purchaser by the Seller and the
Company at or prior to

                                      -67-
<PAGE>


Closing  shall satisfy in full  Seller's  obligation  to deliver the  Transition
Services Agreement pursuant to Sections 2.02(b) and 7.02 hereof.




                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]


                                      -68-
<PAGE>


       IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.

                                      PITNEY BOWES INC.



                                      By  /s/ Bruce P. Nolop
                                          --------------------------------
                                          Name:  Bruce P. Nolop
                                          Title: Executive Vice President and
                                                 Chief Financial Officer

                                      JCC MANAGEMENT LLC



                                      By  /s/ W. Brett Ingersoll
                                          --------------------------------
                                          Name: W. Brett Ingersoll
                                          Title: Managing Director

<PAGE>


                                      FOR PURPOSES OF SECTION 10.07 HEREOF ONLY:

                                      PITNEY BOWES CREDIT CORPORATION



                                      By  /s/ David Kleinman
                                          --------------------------------
                                          Name: David Kleinman
                                          Title: Senior Vice President

                                      -2-