Document:

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                                                                    EXHIBIT 10.1

[Note: The following agreement and plan of merger is attached to provide you
with information regarding its terms and conditions. It contains mutual
representations and warranties of the parties, which are qualified by
confidential disclosure schedules that the parties exchanged in connection with
the signing of the agreement. These representations and warranties were
exchanged for the purpose of allocating risk among the parties and are not for
the purpose of providing disclosures to investors concerning Art Technology
Group, Inc. or eStara, Inc., and should not be relied upon for that purpose.
Information about Art Technology Group, Inc. can be found in the other public
filings Art Technology Group, Inc. makes with the Securities and Exchange
Commission, which are available without charge at www.sec.gov.]

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                                                               EXECUTION VERSION

                          AGREEMENT AND PLAN OF MERGER

                                  BY AND AMONG

                           ART TECHNOLOGY GROUP, INC.,

                          ARLINGTON ACQUISITION CORP.,

                           STORROW ACQUISITION CORP.,

                                  ESTARA, INC.,

                             BURTON E. MCGILLIVRAY,

                       AS STOCKHOLDER REPRESENTATIVE, AND

               THE PRINCIPAL STOCKHOLDERS IDENTIFIED ON SCHEDULE I

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                                TABLE OF CONTENTS

<TABLE>
<S>                                                                          <C>
ARTICLE 1 The Merger......................................................     1
   1.1   The Merger.......................................................     1
   1.2   Effective Time; Closing..........................................     2
   1.3   Effect of the Merger and the Second Step Merger..................     2
   1.4   Articles of Incorporation; Bylaws................................     2
   1.5   Directors and Officers...........................................     3
   1.6   Effect on Capital Stock..........................................     3
   1.7   Adjustments to Base Consideration Based on Company Balance
            Sheet.........................................................     8
   1.8   Adjusted Working Capital; Determination..........................     8
   1.9   Determination of Adjusted Working Capital........................     9
   1.10  Escrow Agreement.................................................    11
   1.11  Stockholder Representative.......................................    11
   1.12  Delivery of Merger Consideration.................................    14
   1.13  No Further Ownership Rights in Company Capital Stock.............    15
   1.14  Restricted Stock.................................................    16
   1.15  Tax Consequences.................................................    16
   1.16  Taking of Necessary Action; Further Action.......................    16
   1.17  Dissenters' Rights...............................................    16
   1.18  Cross References.................................................    17
   1.19  Certain Definitions..............................................    20

ARTICLE 2 Representations and Warranties of the Company...................    25
   2.1   Organization; Subsidiaries.......................................    25
   2.2   Company Capitalization...........................................    26
   2.3   Obligations With Respect to Capital Stock........................    27
   2.4   Authority; Non-Contravention.....................................    28
   2.5   Financial Statements.............................................    29
   2.6   No Undisclosed Liabilities.......................................    29
   2.7   Absence of Certain Changes or Events.............................    30
   2.8   Taxes............................................................    30
   2.9   Title to Properties..............................................    32
   2.10  Intellectual Property............................................    33
   2.11  Compliance with Laws.............................................    38
   2.12  Litigation.......................................................    39
   2.13  Employee Benefit Plans...........................................    39
   2.14  Employment Matters...............................................    41
   2.15  Environmental Matters............................................    42
   2.16  Certain Contracts................................................    42
   2.17  Related-Party Matters............................................    44
   2.18  Brokers' and Finders' Fees.......................................    44
   2.19  Insurance........................................................    44
   2.20  Customers; Accounts Receivable...................................    45
   2.21  Board Approval...................................................    45
</TABLE>

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<TABLE>
<S>                                                                          <C>
   2.22  Minutes and Stock Records........................................    45
   2.23  Accounting System................................................    46
   2.24  Corrupt Practices................................................    46
   2.25  Disclosure.......................................................    46
   2.26  Taxes............................................................    46

ARTICLE 3 Representations and Warranties of Principal Stockholders........    46
   3.1   Organization.....................................................    46
   3.2   Authority; Non-Contravention.....................................    47
   3.3   Title to Company Stock; Status as Company Stockholder............    48
   3.4   Waiver of Appraisal Rights.......................................    48
   3.5   Agreements with the Company......................................    48
   3.6   Brokers' and Finders' Fees.......................................    48
   3.7   Accredited Investor Questionnaire................................    48

ARTICLE 3A Representations and Warranties of Specified Holders............    48
   3A.1  Authority........................................................    48
   3A.2  Title to Company Stock; Status as Company Stockholder............    49
   3A.3  Waiver of Appraisal Rights.......................................    49
   3A.4  Brokers' and Finders' Fees.......................................    49
   3A.5  Accredited Investor Questionnaire................................    49

ARTICLE 4 Representations and Warranties of Parent and Merger Subs........    49
   4.1   Organization of Parent and Merger Subs...........................    49
   4.2   Parent and Merger Sub Capitalization.............................    50
   4.3   Authority; Non-Contravention.....................................    50
   4.4   SEC Filings......................................................    51
   4.5   Litigation.......................................................    51
   4.6   Brokers' and Finders' Fees.......................................    51
   4.7   SEC Documents; Parent Financial Statements.......................    51
   4.8   Taxes............................................................    52
   4.9   Non-Affiliate....................................................    53

ARTICLE 5 Conduct Prior to the Effective Time.............................    53
   5.1   Conduct of Business by the Company...............................    53
   5.2   Covenant of Parent...............................................    56

ARTICLE 6 Additional Agreements...........................................    56
   6.1   Registration for Resale..........................................    56
   6.2   Restrictive Legend; Lock-Up Agreement............................    58
   6.3   Antitrust and Other Filings......................................    59
   6.4   Information Statement; Company Stockholder Meeting...............    59
   6.5   Tax Matters......................................................    60
   6.6   Confidentiality..................................................    62
   6.7   Access to Information............................................    62
</TABLE>

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<TABLE>
<S>                                                                          <C>
   6.8   No Solicitation..................................................    62
   6.9   Public Disclosure................................................    63
   6.10  Reasonable Efforts; Notification.................................    63
   6.11  Third Party Consents.............................................    64
   6.12  Rights Agreement; Takeover Statutes..............................    64
   6.13  Certain Employee Benefits........................................    65
   6.14  Transaction Bonuses; Earn-Out Bonus..............................    65

ARTICLE 7 Survival of Representations; Indemnification....................    67
   7.1   Indemnification by Company Stockholders..........................    67
   7.2   Indemnification by Parent and Merger Subs........................    67
   7.3   Survival of Representations......................................    68
   7.4   Process of Indemnification for Parent Claims and Stockholder
            Claims........................................................    68

ARTICLE 8 Conditions to the Merger........................................    73
   8.1   Conditions to Obligations of Each Party to Effect the Merger.....    73
   8.2   Additional Conditions to Obligations of the Company..............    73
   8.3   Additional Conditions to the Obligations of Parent and Merger
         Sub 1............................................................    74

ARTICLE 9 Termination, Amendment and Waiver...............................    75
   9.1   Termination......................................................    75
   9.2   Notice of Termination; Effect of Termination.....................    76
   9.3   Fees and Expenses................................................    76
   9.4   Amendment........................................................    77
   9.5   Extension; Waiver................................................    77

ARTICLE 10 General Provisions.............................................    77
   10.1  Notices..........................................................    77
   10.2  Interpretation...................................................    78
   10.3  Counterparts; Facsimile..........................................    79
   10.4  Entire Agreement; Third Party Beneficiaries......................    79
   10.5  Severability.....................................................    79
   10.6  Other Remedies; Specific Performance; Fees.......................    79
   10.7  Governing Law....................................................    80
   10.8  Rules of Construction............................................    80
   10.9  Assignment.......................................................    80
   10.10 Waiver of Jury Trial.............................................    80
</TABLE>

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                          AGREEMENT AND PLAN OF MERGER

     This AGREEMENT AND PLAN OF MERGER (this "AGREEMENT") is made and entered
into as of September 18, 2006, among Art Technology Group, Inc., a Delaware
corporation ("PARENT"), Arlington Acquisition Corp., a Maryland corporation and
a wholly owned subsidiary of Parent ("MERGER SUB 1"), Storrow Acquisition Corp.,
a Maryland corporation and a wholly owned subsidiary of Parent ("MERGER SUB
2"and, with Merger Sub 1, each a "MERGER SUB"), eStara, Inc., a Maryland
corporation (the "COMPANY"), Burton E. McGillivray, as the representative of the
Company Stockholders (together with his replacement, the "STOCKHOLDER
REPRESENTATIVE"), and the Company Stockholders listed on Schedule I hereto
holding not less than (i) a majority of the outstanding Common Stock of the
Company and (ii) 60% of the issued and outstanding Series C Preferred Stock of
the Company (the "PRINCIPAL STOCKHOLDERS").

                                    RECITALS

     A. The respective Boards of Directors of Parent, Merger Sub 1, Merger Sub 2
and the Company have approved this Agreement, and declared advisable the merger
of Merger Sub 1 with and into the Company (the "MERGER") upon the terms and
subject to the conditions of this Agreement and in accordance with the Maryland
General Corporation Law (the "MGCL"), and the other transactions contemplated by
this Agreement.

     B. Immediately after the Effective Time, the Company, as a wholly owned
subsidiary of Parent, will be merged (the "SECOND STEP MERGER") with and into
Merger Sub 2, with Merger Sub 2 as the surviving corporation.

     C. For federal income tax purposes, it is intended that the Merger and the
Second Step Merger, considered together, constitute a reorganization under the
provisions of Section 368 of the Internal Revenue Code of 1986, as amended (the
"CODE"), and that each of the Parent and the Company will be a "party to a
reorganization" within the meaning of Section 368 of the Code.

     D. Concurrently with the execution of this Agreement, and as a condition
and inducement to Parent's willingness to enter into this Agreement, the
Principal Stockholders are entering into Voting Agreements with Parent in the
form of Exhibit A (the "VOTING AGREEMENTS").

     In consideration of the foregoing and the representations, warranties,
covenants and agreements set forth in this Agreement, the parties agree as
follows:

                                    ARTICLE 1
                                   THE MERGER

     1.1 THE MERGER. Upon the terms and subject to the conditions of this
Agreement and the applicable provisions of the MGCL, at the Effective Time (as
defined below), Merger Sub 1 shall be merged with and into the Company, the
separate corporate existence of Merger Sub 1 shall cease, and the Company shall
continue as the surviving corporation of the Merger (the "INITIALLY SURVIVING
CORPORATION").

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     1.2 EFFECTIVE TIME; CLOSING. (a) Subject to the provisions of this
Agreement, the parties hereto shall cause the Merger to be consummated by filing
articles of merger consistent with this Agreement with the Secretary of State of
the State of Maryland in accordance with the relevant provisions of the MGCL
(the "ARTICLES OF MERGER") (the time of such filing (or such later time as may
be agreed in writing by the Company and Parent and specified in the Articles of
Merger) being the "EFFECTIVE TIME") as soon as practicable on or after the
Closing Date (as defined below).

          (b) Immediately following the Effective Time, the Parent shall cause
the Company, as the surviving corporation of the Merger and a wholly owned
subsidiary of the Parent, to be merged with and into Merger Sub 2 in the Second
Step Merger pursuant to an agreement of merger entered into by and among the
Company and Merger Sub 2 (the "SECOND STEP AGREEMENT OF MERGER"), by filing
articles of merger consistent with this Agreement with the Secretary of State of
the State of Maryland in accordance with the relevant provisions of the MGCL
(the "SECOND ARTICLES OF MERGER"). There will be no conditions to the closing of
the Second Step Merger other than the closing of the Merger.

          (c) The closing of the Merger and the Second Step Merger (the
"CLOSING") shall take place at the offices of Foley Hoag LLP, Seaport World
Trade Center West, 155 Seaport Boulevard, Boston, Massachusetts, at a time and
date to be specified by the parties, which shall be no later than the second
business day after the satisfaction or waiver of the conditions set forth in
Article 8 (other than those that by their nature will be satisfied at the
Closing) or at such other time, date and location as the parties hereto agree in
writing (the "CLOSING DATE").

     1.3 EFFECT OF THE MERGER AND THE SECOND STEP MERGER.

          (a) At the Effective Time, the effect of the Merger shall be as
provided in this Agreement and the applicable provisions of the MGCL. Without
limiting the generality of the foregoing, at the Effective Time, all the
property, rights, privileges, powers and franchises of the Company and Merger
Sub 1 shall vest in the Initially Surviving Corporation, and all debts,
liabilities and duties of the Company and Merger Sub 1 shall become the debts,
liabilities and duties of the Initially Surviving Corporation.

          (b) Following the Second Step Merger, the separate existence of the
Company as the Initially Surviving Corporation will cease and Merger Sub 2 will
continue as the surviving corporation of the Second Step Merger (the "SURVIVING
CORPORATION") under the name "eStara, Inc." Upon the consummation of the Second
Step Merger, all property, rights, powers, privileges, and franchises of the
Company and Merger Sub 2 will vest in the Surviving Corporation, and all
liabilities and duties of the Company and Merger Sub 2 will become the
liabilities and duties of the Surviving Corporation.

     1.4 ARTICLES OF INCORPORATION; BYLAWS.

          (a) The Articles of Merger shall provide that, at the Effective Time,
the Articles of Incorporation of the Initially Surviving Corporation shall be in
the form of the Articles of Incorporation of the Merger Sub 1 as in effect
immediately prior to the Effective

                                      -2-

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Time; provided, however, that as of the Effective Time, Article I of the
Articles of Incorporation of the Initially Surviving Corporation shall read:
"The name of the corporation is eStara, Inc."

          (b) At the Effective Time, the Bylaws of Merger Sub 1, as in effect
immediately prior to the Effective Time, shall become the Bylaws of the
Initially Surviving Corporation until thereafter amended.

          (c) Upon the consummation of the Second Step Merger, the Articles of
Incorporation of Merger Sub 2, as in effect immediately prior to the
consummation of the Second Step Merger, shall be the Articles of Incorporation
of the Surviving Corporation until thereafter amended; provided, however, that
as of the Effective Time, Article I of the Articles of Incorporation of the
Surviving Corporation shall read: "The name of the corporation is eStara, Inc."

          (d) Upon the consummation of the Second Step Merger, Bylaws of Merger
Sub 2, as in effect immediately prior to the consummation of the Second Step
Merger, shall be the Bylaws of the Surviving Corporation until thereafter
amended.

     1.5 DIRECTORS AND OFFICERS. At the Effective Time, the directors of Merger
Sub 1, serving in such capacity immediately prior to the Effective Time, shall
be the directors of the Initially Surviving Corporation. Upon the consummation
of the Second Step Merger, the directors of Merger Sub 2 shall be the directors
of the Surviving Corporation, until their respective successors are duly elected
or appointed and qualified. At the Effective Time, the officers of Merger Sub 1,
holding office immediately prior to the Effective Time, shall be the officers of
the Initially Surviving Corporation, until their respective successors are duly
elected or appointed and qualified. Upon consummation of the Second Step Merger,
the officers of Merger Sub 2 shall be the officers of the Surviving Corporation,
until their respective successors are duly elected or appointed and qualified.

     1.6 EFFECT ON CAPITAL STOCK. Subject to the terms and conditions of this
Agreement, at the Effective Time, by virtue of the Merger and without any action
on the part of Merger Sub 1, the Company or the holders of any of the Company
Capital Stock (as defined below):

          (a) CONVERSION OF COMPANY CAPITAL STOCK. Each share of Company Capital
Stock issued and outstanding immediately prior to the Effective Time, other than
any shares of Company Capital Stock to be canceled pursuant to Section 1.6(d)
and any Dissenting Shares (as defined, and to the extent provided in Section
1.17(a)), will be canceled and extinguished and automatically converted into the
right to receive the applicable Per Share Merger Consideration (as defined in
Section 1.6(b) below) upon surrender by the holder thereof of the certificate
representing such share of Company Capital Stock in the manner provided in
Section 1.12, including, with respect to each whole share of Parent Common Stock
to be received, the right to receive one Right (as defined in the Rights
Agreement, dated as of September 26, 2001, between Parent and EquiServe Trust
Company, N.A., as Rights Agent (the "RIGHTS AGREEMENT")). No fraction of a share
of Parent Common Stock will be issued by virtue of the Merger, but in lieu
thereof, a cash payment shall be made pursuant to Section 1.12(c).

          (b) For purposes of this Agreement:

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               (i) The "MERGER CONSIDERATION" shall consist of the Base
     Consideration and the Earn-Out Consideration, each determined, and payable,
     as set forth below.

               (ii) The "PER SHARE MERGER CONSIDERATION" shall be the amount, if
     any, of the Merger Consideration payable (A) with respect to each share of
     each respective class or series of Company Capital Stock outstanding
     immediately prior to the Effective Time, or (B) to the holder of each
     Company Warrant to acquire a share of Common Stock of the Company that is
     outstanding immediately prior to the Effective Time, that is assumed by
     Parent pursuant to this Agreement, and that is exercised in accordance with
     its terms after the Effective Time. The Per Share Merger Consideration
     shall be determined in accordance with the Articles of Incorporation of the
     Company as in effect as of the Effective Time, and is more fully set forth
     on Schedule II attached hereto and incorporated by reference herein.
     Between the date hereof and the Effective Time, Schedule II may be updated
     by the Company as necessary to reflect (i) the exercise or cancellation of
     any Company Option or Company Warrant that is outstanding on the date of
     this Agreement, (ii) the payment of cash to Ineligible Stockholders and
     Ineligible Recipients, and (iii) any election by Parent to increase the
     Base Cash pursuant to Section 1.6(b)(vi); provided, that any such update
     shall be consistent with the Articles of Incorporation of the Company and
     with the terms of this Agreement, and shall be delivered by the Company to
     Parent prior to the Effective Time. The Per Share Merger Consideration, if
     any, may vary for each Company Stockholder based upon the class or series,
     and dates of issuance, of the Company Capital Stock held by each Company
     Stockholder immediately prior to the Effective Time. The calculation of the
     Per Share Merger Consideration payable in respect of the Common Stock of
     the Company shall be based on total Common Share Equivalents as of the
     Effective Time.

               (iii) The "BASE CONSIDERATION" shall consist of the Base Parent
     Shares and the Base Cash, each as adjusted pursuant to Section 1.7 below.

               (iv) An "INELIGIBLE STOCKHOLDER" is any Company Stockholder that
     is determined by Parent, in its reasonable judgment, exercised in good
     faith, not to be an "accredited investor" as to Parent, within the meaning
     of Rule 501(a) under the Securities Act of 1933, as amended (the
     "SECURITIES ACT"), or otherwise ineligible to acquire shares of Parent
     Common Stock in a private placement pursuant to Rule 506 under the
     Securities Act.

               (v) The "BASE PARENT SHARES" shall consist of 17,857,000 shares
     of Parent Common Stock, provided that the number of Base Parent Shares
     shall be (A) reduced by the quotient of the aggregate amount of the
     Transaction Bonuses divided by $2.80, (B) reduced by the quotient of the
     Base Cash, if any, divided by $2.80, (C) reduced pursuant to the terms of
     Subsection 1.6(b)(x) and (D) adjusted pursuant to Section 1.7 hereof.

               (vi) The "BASE CASH" shall be the sum of (A) $2,000,000 plus, (B)
     such additional aggregate amount in cash as Parent may, in its sole
     discretion, elect by written notice to the Company, given not less than two
     business days prior to the Closing,

                                      -4-

<PAGE>

     but in no event more than (I) $3,000,000, or (II) if necessary to avoid
     disqualification of the Merger as a reorganization under Section 368(a) of
     the Code, such lesser amount as would not result in such disqualification.

               (vii) The "COMPANY CAPITAL STOCK" shall consist of all
     outstanding capital stock of the Company, including the Company Common
     Stock, Company Series A Preferred Stock, Company Series C-1 Preferred
     Stock, Company Series C-2 Preferred Stock, Company Series D Preferred
     Stock, and Company Series E Preferred Stock (each as defined in Section
     2.2(a)).

               (viii) The "COMPANY CONVERTIBLE SECURITIES" shall consist of each
     outstanding stock option, warrant, or other convertible security to acquire
     shares of each respective class or series of Company Capital Stock.

               (ix) The "COMPANY STOCKHOLDERS" shall consist of the holders of
     outstanding shares of Company Capital Stock and the holders of outstanding
     Company Convertible Securities.

               (x) Anything to the contrary in the foregoing notwithstanding, in
     the event that Parent shall determine, in its reasonable discretion,
     exercised in good faith, that any Company Stockholder is an Ineligible
     Stockholder, then in lieu of the Base Parent Shares otherwise included in
     the Merger Consideration allocated to such Ineligible Stockholder, each
     such Ineligible Stockholder shall be entitled to receive, an amount in cash
     equal to the sum of (A) the product of (I) the number of shares of Parent
     Common Stock such Ineligible Stockholder would have otherwise received,
     multiplied by (II) $2.80, plus (B) such amount, if any, as is payable to
     such Ineligible Stockholder pursuant to Section 1.6(c) below.

          (c) EARN-OUT CONSIDERATION. In addition to the Base Consideration, the
Company Stockholders will be eligible to receive additional merger consideration
in the aggregate amount of up to $3,107,349 (the "EARN-OUT CONSIDERATION"),
provided that the ESTARA REVENUE, as defined below, is equal to or greater than
$25,000,000, as follows:

               (i) If the eStara Revenue is equal to or greater than $25,000,000
     but less than $30,000,000, the aggregate Earn-Out Consideration shall be
     equal to $621,470.

               (ii) If the eStara Revenue is equal to or greater than
     $30,000,000, the Earn-Out Consideration shall be equal to $3,107,349.

               (iii) The aggregate Earn-Out Consideration will be payable on or
     before March 14, 2008 (the "EARN-OUT PAYMENT DATE") to the Company
     Stockholders based on the applicable Per Share Merger Consideration
     attributable to the Earn-Out Consideration, as set forth on Schedule II.
     The Earn-Out Consideration may be paid, in the sole discretion of Parent,
     in the form of cash or in shares of Parent Common Stock, the valuation of
     which is based upon the 20-day volume weighted average price of the Parent
     Common Stock for the period ending two days before the Earn-Out Payment
     Date, or in a combination thereof; provided that all Company Stockholders
     (except Ineligible Stockholders, who may receive all cash), shall receive
     cash and Parent Common Stock in

                                      -5-

<PAGE>

     the same proportion; and, provided, further, that in no event shall Parent
     elect to pay the Earn-Out Consideration (x) in shares of Parent Common
     Stock if that would require that Parent's stockholders would be or would
     have been required to approve this transaction under the applicable rules
     of the Nasdaq Stock Market, Inc. or other exchange rules or securities
     laws, unless prior to the Earn-Out Payment Date, Parent receives such
     stockholder approval in compliance with such applicable rules of the Nasdaq
     Stock Market, Inc. or other exchange rules or securities laws, or (y) in
     the form of cash, if such payment would result in the Merger not qualifying
     as a reorganization under Section 368(a) of the Code.

               (iv) For purposes of this subsection:

                    (A) "ESTARA SERVICES" shall mean the Company's Click to
     Call, Click to Chat and Call Tracking service offerings and related
     services, and any improvement, enhancement or extension to any such service
     that is developed by the Company and made available to customers of the
     Company after the date of this Agreement; and

                    (B) "ESTARA REVENUE" shall mean the consolidated revenue
     recognized by Parent, in accordance with United States generally accepted
     accounting principles ("GAAP"), consistently applied, consistent with past
     practice and in accordance with Parent's revenue recognition policies in
     its audited financial statements for the year ended December 31, 2007 (the
     "MEASUREMENT PERIOD"), that is attributable to the sale or license of
     eStara Services. Notwithstanding the foregoing, (I) any revenues recognized
     by Parent from any source during the Measurement Period from the sale or
     license of any products or services that are derivative of any eStara
     Services will be considered eStara Revenue, and (II) in the event of any
     sale or license of any bundled or integrated products or services that
     include any eStara Services or products or services that are derivative of
     any eStara Services, then the eStara Revenue shall be deemed to include a
     proportionate share of the revenue recognized by Parent from the sale or
     license of such bundled services, determined by comparing the average
     selling price computed for the most recent twelve calendar months, on a
     stand-alone basis, for the eStara Services that are included in such
     bundled products and services, as set forth on Schedule III attached
     hereto, to Parent's published list price on a stand-alone basis for the ATG
     products and services that are included in such bundled products and
     services. For purposes of this paragraph, a product or service shall be
     "derivative" of an eStara Service if, in the absence of this Agreement, it
     could not be sold or licensed by Parent without infringing Intellectual
     Property Rights (as defined in Section 2.10 below but excluding any
     Commercially Available Software) that is owned by or licensed to eStara.

               (v) Promptly after filing its Quarterly Report on Form 10-Q for
     each of the first three fiscal quarters of Parent in 2007, Parent shall
     provide the Stockholder Representative with a report specifying the eStara
     Revenue for the year through the end of the such fiscal quarter.

               (vi) If, following the Earn-Out Payment Date, the maximum amount
     of Earn-Out Consideration provided for hereunder was not achieved and paid,
     the

                                      -6-

<PAGE>

     Stockholder Representative shall have the right, upon reasonable notice to
     Parent at the Stockholder Representative's expense, to have an independent
     accountant access the books and records of Parent as relevant or necessary
     to verify Parent's determination of the eStara Revenue as determined in
     accordance with GAAP. As a condition to such access, such independent
     accountant shall agree with Parent not to disclose any Confidential
     Information of Parent (other than its determination of the eStara Revenue,
     and its basis for determining such amount, which may only be disclosed to
     the Stockholder Representative and his advisors). If the Stockholder
     Representative disagrees with Parent's determination of the Earn-Out
     Consideration, the Stockholder Representative will promptly (but in any
     event no later than 60 days following the Earn-Out Payment Date) notify
     Parent in writing and the parties shall negotiate in good faith to attempt
     to resolve any such disagreement within 30 days following such notice. If
     the parties fail to resolve their disagreement within this 30-day period,
     the disagreement shall be resolved by an Accounting Arbitrator, using the
     same procedures as are set forth in Sections 1.9(b)(iii) and 1.9(b)(iv).

          (d) CANCELLATION OF COMPANY-OWNED AND PARENT-OWNED STOCK. Each share
of Company Common Stock held by the Company or owned by Merger Sub 1, Parent or
any direct or indirect wholly owned subsidiary of the Company or of Parent
immediately prior to the Effective Time shall be canceled and extinguished
without any conversion thereof.

          (e) EFFECT OF MERGER ON STOCK OPTIONS AND WARRANTS.

               (i) The Board of Directors of the Company shall take appropriate
     action pursuant to each Company Option Plan such that each outstanding
     Company Option shall be accelerated so as to be exercisable in full
     immediately prior to the Effective Time, and, to the extent not exercised
     prior to the Effective Time, shall be terminated.

               (ii) As of the Effective Time, (A) each outstanding Company
     Warrant shall automatically be converted into a warrant to acquire, upon
     the exercise thereof, the aggregate Per Share Merger Consideration that
     would have been payable to the holder if such Company Warrant had been
     exercised immediately prior to the Effective Time, (B) all references to
     the Company in each Company Warrant shall be deemed to refer to Parent,
     where appropriate, and (C) Parent shall assume the obligations of the
     Company under the Company Warrant.

          (f) CAPITAL STOCK OF MERGER SUB 1 AND MERGER SUB 2. Each share of
common stock, par value $0.01 per share, of Merger Sub 1 ("MERGER SUB 1 COMMON
STOCK"), issued and outstanding immediately prior to the Effective Time shall be
converted into one validly issued, fully paid and nonassessable share of common
stock, $0.01 par value per share, of the Initially Surviving Corporation.
Following the Second Step Merger, each certificate evidencing ownership of
shares of Merger Sub 2 common stock shall remain outstanding and evidence
ownership of such shares of capital stock of the Surviving Corporation.

                                      -7-

<PAGE>

     1.7 ADJUSTMENTS TO BASE CONSIDERATION BASED ON COMPANY BALANCE SHEET. If as
of the Closing Date, the Company's Adjusted Working Capital is greater or less
than $2,500,000, then the amount of the Base Consideration shall be increased or
decreased, as follows.

          (a) If the Adjusted Working Capital exceeds $2,500,000, then for
purposes of determining the amount of the Base Consideration payable to any
Company Stockholder the number of Base Parent Shares shall be increased by a
number determined by dividing (i) the positive amount of such excess by (ii)
$2.80.

          (b) If the Adjusted Working Capital is less than $2,500,000, then for
purposes of determining the amount of the Base Consideration payable to any
Company Stockholder the number of Base Parent Shares shall be decreased by a
number determined by dividing (i) the absolute value of such deficiency by (ii)
$2.80.

     1.8 ADJUSTED WORKING CAPITAL; DETERMINATION. For purposes of Section 1.7,
the following terms shall have the meanings set forth below:

          (a) "ADJUSTED WORKING CAPITAL" shall mean an amount equal to the sum
of (i) the current assets of the Company (excluding any deferred income tax
asset), minus (ii) the current liabilities of the Company, including, without
limitation, payment of or an accrual for (A) Transaction Expenses (but excluding
any accrual for the Transaction Bonuses described below), and (B) any and all
Taxes as of the Effective Time, including any applicable sales and
telecommunications Taxes, each determined as of the Closing Date in accordance
with GAAP, in a manner consistent with past practices of the Company; plus or
minus (iii) any other adjustments agreed upon on in writing by Parent and the
Company; provided that in no event shall any Excluded Adjustment be taken into
account for purposes of determining the Adjusted Working Capital.

          (b) "EXCLUDED ADJUSTMENT" shall mean any change in a current asset or
a current liability as compared with its amount at July 31, 2006 that is:

               (i) the result of a change in estimate by the Company (whether
     effected by way of reversal or omission of a previously accrued liability
     or in any other manner) which change in estimate is not made in response to
     any of the following occurring after July 31, 2006: (A) a bona fide
     transaction entered into by the Company, (B) a payment made or received by
     the Company (C) action of an unaffiliated third party or (D) an event or
     change of circumstances external to the Company, or

               (ii) the result of any transaction or action by the Company that
     would constitute a breach of the Company's obligations under Section 5.1
     below.

          (c) "TRANSACTION EXPENSE" shall mean any expense directly attributable
to the negotiation and consummation of the transactions contemplated by this
Agreement, including, but not limited to, severance payments, bonus payments
(other than the Transaction Bonuses) and retention payments that become due by
reason of the consummation of the Merger, fees and disbursements of DLA Piper US
LLP, counsel to the Company, fees and disbursements of counsel employed by the
Company to defend any claim, suit, action or proceeding commenced or threatened
against the Company that seeks to restrain or enjoin the consummation of the

                                      -8-

<PAGE>

transactions contemplated by this Agreement, and of Argy, Wiltse & Robinson,
P.C., the Company's independent public accountants, and amounts payable to
Pagemill Partners, LLC, the Company's financial advisor, or to the Stockholder
Representative.

          (d) "TRANSACTION BONUSES" shall mean bonuses in the aggregate amount
of $5,064,866 awarded by the Company to those employees of the Company in the
amounts set forth on Schedule II, contingent upon the Closing and payable
following the Effective Time as more fully set forth in Section 6.14 below.

     1.9 DETERMINATION OF ADJUSTED WORKING CAPITAL.

          (a) On or before the third business day preceding the date fixed for
the Closing (as defined in Section 1.2), the Company shall deliver to Parent a
certificate, in reasonable detail reasonably satisfactory to Parent, setting
forth its estimate of the Adjusted Working Capital of the Company as of the
Closing Date determined in accordance with Section 1.8 (the "CLOSING
CERTIFICATE").

          (b) On or before the 30th day following the Closing, Parent shall
notify the Stockholder Representative in writing whether it accepts or disputes
the accuracy of the Company's determination of the Adjusted Working Capital as
set forth on the Closing Certificate.

               (i) If Parent accepts the Company's determination of the Adjusted
     Working Capital, or if it fails within such 30 day period to notify the
     Company of any dispute with respect thereto, then the Closing Certificate
     shall be deemed final and conclusive and binding upon all parties.

               (ii) If Parent disputes the accuracy of the Closing Certificate
     and the Company's determination of the Adjusted Working Capital, Parent
     shall within the 30-day period referred to above provide written notice to
     the Stockholder Representative (the "DISPUTE NOTICE"), setting forth in
     reasonable detail those items that Parent disputes, the amounts of any
     adjustments that are necessary in its judgment for the computation of the
     Adjusted Working Capital to conform to the requirements of this Agreement,
     and the basis for its suggested adjustments. During the 30 day period
     following delivery of a Dispute Notice, Parent and the Stockholder
     Representative will meet and negotiate in good faith with a view to
     resolving their disagreements over the disputed items. During such 30 day
     period and until the final determination of the Working Capital Adjustment,
     if any, the Stockholder Representative will be provided with such access to
     the financial books and records of the Business and, subject to access
     procedures acceptable to Parent's independent public accounts (the "PARENT
     AUDITORS"), the workpapers of the Parent Auditors, as it may reasonably
     request to enable it to respond to any Dispute Notice. If the parties
     resolve their differences over the disputed items in accordance with the
     foregoing procedure, the Working Capital Adjustment shall be the amount
     agreed upon by them.

               (iii) If the parties fail to resolve their differences over the
     disputed items with such 30 day period, then Parent and the Stockholder
     Representative shall

                                      -9-

<PAGE>

     forthwith jointly request that the Accounting Arbitrator make a binding
     determination as to the disputed items in accordance with this Agreement.
     The "ACCOUNTING ARBITRATOR" shall mean such national or regional firm of
     independent accountants as may be agreed upon by Parent and the Stockholder
     Representative. Within 10 days following the delivery of a Dispute Notice,
     each of Parent and the Stockholder Representative shall propose to the
     other in writing at least two such firms acceptable to it to act as
     Accounting Arbitrator. Any firm currently engaged as the independent public
     accounting firm for a party shall be ineligible to be proposed by such
     party serve as an arbitrator without the consent of the other party. If the
     parties have not, by the end of the 30-day period referred to above, agreed
     upon an Accounting Arbitrator, then the Accounting Arbitrator shall be
     selected by one party, drawn by lot, from the list of firms proposed by the
     other party.

               (iv) The Accounting Arbitrator will under the terms of its
     engagement have no more than 75 days from the date of referral and no more
     than 15 days from the final submission of information and testimony by the
     Parent and the Stockholder Representative within which to render its
     written decision with respect to the disputed items, which decision shall
     be final and binding upon the parties and enforceable by any court of
     competent jurisdiction. The Accounting Arbitrator shall review such
     submissions and base its determination solely on such submissions. In
     resolving any disputed item, the Accounting Arbitrator may not assign a
     value to any item greater than the greatest value for such item claimed by
     either party or less than the smallest value for such item claimed by
     either party. Parent and the Company Stockholders (by way of the Indemnity
     Escrow) shall each bear the costs and expenses of the Accounting Arbitrator
     based on the percentage which the portion of the contested adjustment
     amount not awarded to each party bears to the amount actually contested by
     such party (e.g., if Parent makes an adjustment claim for $1,000,000 and
     the Stockholder Representative only contests $500,000 of the amount claimed
     by Parent, and if the Accounting Arbitrator resolves the dispute by
     awarding Parent $300,000 of the $500,000 contested, then the Accounting
     Arbitrator's costs and expenses will be allocated 60% to the Company
     Stockholders and 40% to Parent).

               (v) If the Adjusted Working Capital, determined as set forth
     above, is greater than $2,500,000, then the amount of Base Consideration,
     whether in the form of Parent Common Stock or cash, to which each Company
     Stockholder is otherwise entitled shall be increased as set forth in
     Section 1.7(a) above, and Parent shall promptly, and in any event within
     five business days after such determination, (i) deliver to each Company
     Stockholder such additional Base Consideration, consisting of cash, or
     Parent Common Stock, or both, as would have been deliverable to such
     Company Stockholder if the final determination of the Adjusted Working
     Capital had been made immediately prior to the Effective Time, and (ii)
     direct the Escrow Agent (as defined below) to release to the Company
     Stockholders, as their interests may appear, any property then held for
     their accounts in the Working Capital Escrow (as defined below).

               (vi) If the Adjusted Working Capital, determined as set forth
     above, is less than $2,500,000, then the amount of Base Consideration,
     whether in the form of Parent Common Stock or cash, to which each Company
     Stockholder is otherwise entitled

                                      -10-

<PAGE>

     shall be reduced as set forth in Section 1.7(b) below, and Parent shall be
     entitled to direct that the Escrow Agent deliver to Parent from the Working
     Capital Escrow (and, in the event that the Working Capital Escrow is
     insufficient, from the Indemnity Escrow, as defined below)), for the
     account of each Company Stockholder, that portion of the Base Consideration
     delivered to the Escrow Agent for the account of each Company Stockholder
     as would not have been payable to such Company Stockholder if the final
     determination of the Adjusted Working Capital had been made immediately
     prior to the Effective Time. If, after such delivery to Parent, any
     property shall remain in the Working Capital Escrow, Parent will promptly
     instruct the Escrow Agent to release the balance of such property to the
     Company Stockholders, as their interests may appear.

     1.10 ESCROW AGREEMENT. At the Closing, Parent will deliver to Computershare
Trust Company, Inc., as escrow agent (the "ESCROW AGENT"), pursuant to an escrow
agreement (the "ESCROW AGREEMENT") in substantially the form attached as Exhibit
B hereto, the following:

          (a) shares of Parent Common Stock and, if applicable, cash
constituting ten percent (10%) of the Base Consideration payable to each Company
Stockholder, determined without regard to any adjustment pursuant to Section
1.6(b)(v)(A) or Section 1.7 (collectively, the "INDEMNITY ESCROW"); and

          (b) shares of Parent Common Stock and, if applicable, cash
constituting an additional five percent (5%) of the Base Consideration payable
to each Company Stockholder determined without regard to any adjustment pursuant
to Section 1.6(b)(v)(A) or Section 1.7 (collectively, the "WORKING CAPITAL
ESCROW").

     The Escrow Agreement will provide, among other things, for the
establishment of subaccounts whereby the Base Consideration delivered to and
disbursed by the Escrow Agent for the account of each Company Stockholder shall
be separately accounted for, and shall further provide that on the first
anniversary of the Closing the Indemnity Escrow (less the amount of any claims
paid and pending claims asserted by Parent in good faith of which the Escrow
Agent has received notice) will be released from the escrow account and
distributed to the Company Stockholders, and that six months after the Closing
Date (or such lesser period as is necessary to finally determine the Adjusted
Working Capital under Section 1.9(b) above) the Working Capital Escrow (less the
amount of any claims paid and pending claims asserted by Parent in good faith of
which the Escrow Agent has received written notice) will be released from the
escrow account and distributed to the Company Stockholders.

     1.11 STOCKHOLDER REPRESENTATIVE.

          (a) Each Principal Stockholder hereby appoints, and by operation of
the merger each other Company Stockholder shall be deemed to have appointed,
Burton E. McGillivray (including any replacement for him as designated herein,
the "STOCKHOLDER REPRESENTATIVE") the attorney-in-fact of such person, with full
power and authority, including power of substitution, acting in the name of and
for and on behalf of such person with respect to this Agreement and any of the
other Transaction Documents, including to (i) deliver to Parent at the Closing
the certificates representing the outstanding Company Capital Stock; (ii)
execute and deliver to Parent at the Closing all certificates and documents to
be delivered to Parent by the

                                      -11-
<PAGE>

Company Stockholders pursuant to this Agreement and the other Transaction
Documents, including, without limitation, the Escrow Agreement; (iii) incur
expenses on behalf of the Company Stockholders in connection with this
Agreement, the other Transaction Documents and the transactions contemplated
hereby and thereby as the Stockholder Representative may deem appropriate; (iv)
during the time that property remains in escrow pursuant to the Escrow
Agreement, to give and receive all notices required to be given under this
Agreement and the other agreements contemplated hereby to which all of the
Company Stockholders are a party, including the Escrow Agreement; and (v) take
such action on behalf of the Company Stockholders as the Stockholder
Representative may deem appropriate in respect of: (1) waiving any inaccuracies
in the representations or warranties of Parent or either Merger Sub contained in
this Agreement or the other Transaction Documents; (2) amending or waiving any
provision of this Agreement or the other Transaction Documents; (3) taking such
other action as any Company Stockholder is authorized to take under this
Agreement or the other Transaction Documents; (4) receiving all documents or
certificates and making all determinations, on behalf of any Company
Stockholder, required under this Agreement or the other Transaction Documents;
(5) resolving any dispute with Parent over any aspect of this Agreement or the
other Transaction Documents, including the calculation of Adjusted Working
Capital, the Earn-Out Consideration and claims for indemnification hereunder;
(6) all such other matters as the Stockholder Representative may deem necessary
or appropriate to consummate the transactions contemplated by this Agreement or
the other Transaction Documents; (7) taking all such action as may be necessary
after the Closing Date to carry out any of the transactions contemplated by this
Agreement or the other Transaction Documents; and (8) entering into any
agreement to effectuate any of the foregoing which shall have the effect of
binding any Company Stockholder as if such person had personally entered into
such agreement. This appointment and power of attorney shall be deemed as
coupled with an interest and all authority conferred hereby shall be irrevocable
whether by the death or incapacity of any such person or the occurrence of any
other event or events. The Parent shall be entitled to rely upon any
communication or writings given by or to, or executed by, the Stockholder
Representative and all actions, decisions and instructions of the Stockholder
Representative shall be conclusive and binding upon all of the Company
Stockholders. To the extent that the terms of this Agreement or any of the
documents executed in connection herewith require Parent or either Merger Sub to
obtain the consent of any Company Stockholder, such consent may be made or given
by the Stockholder Representative. Notwithstanding the foregoing, notices which
are to be given under this Agreement to the Company Stockholders shall only be
effective if given to each Company Stockholder, in accordance with Section 10.1
hereof.

          (b) In the event that the Stockholder Representative dies, becomes
unable to perform his responsibilities hereunder or resigns from such position,
the remaining Company Stockholders shall, by election of the Company
Stockholders (or, if applicable, their respective heirs, legal representatives,
successors and assigns) who held a majority of the shares of Common Share
Equivalents issued and outstanding immediately prior to the Effective Time,
select another representative to fill such vacancy and such substituted
representative shall be deemed to be the Stockholder Representative for all
purposes of this Agreement.

          (c) In the performance of his duties hereunder, the Stockholder
Representative shall be entitled to rely upon any document or instrument
reasonably believed by him to be genuine and accurate. The Stockholder
Representative may assume that any person purporting

                                      -12-

<PAGE>

to give any notice in accordance with the provisions hereof has been duly
authorized to do so. In the absence of proven gross negligence or willful
misconduct, (i) the Stockholder Representative shall not be liable to the
Company Stockholders with respect to his performance of the functions specified
in this Agreement, and (ii) no Company Stockholder shall commence, prosecute or
maintain any actions or proceedings against the Stockholder Representative with
respect to his performance of the functions specified in this Agreement, except
in cases of gross negligence or willful misconduct. In determining the
occurrence of any fact, event or contingency, the Stockholder Representative may
request from any of the Company Stockholders or any other person such reasonable
additional evidence as the Stockholder Representative in his sole discretion may
deem necessary, and may at any time inquire of and consult with others,
including any of the Company Stockholders, and shall not be liable to any
Company Stockholder for any damages resulting from any delay in acting hereunder
pending receipt and examination of additional evidence requested. The
Stockholder Representative shall be entitled to be indemnified and held harmless
by each Company Stockholder against any damages incurred without gross
negligence or willful misconduct on the part of the Stockholder Representative
and arising out of or in connection with the acceptance or administration of his
duties hereunder with each Company Stockholder being, severally and not jointly,
liable for such Company Stockholder's pro rata share (based on their respective
interests in the Base Consideration), of any such claim for indemnification by
the Stockholder Representative.

          (d) By their execution of this Agreement, the Principal Stockholders
agree and by operation of the merger each other Company Stockholder shall be
deemed to have agreed, that:

               (i) Parent and each Merger Sub shall be able to rely conclusively
     on the instructions and decisions of the Stockholder Representative as to
     the determination and payment of the Adjusted Working Capital and the
     Earn-Out Consideration and the defense and/or settlement of any Claims for
     which the Company Stockholders may be required to indemnify Parent pursuant
     to Article 7 hereof, and no party hereunder shall have any cause of action
     against Parent or either Merger Sub for any action taken in reliance upon
     the instructions or decisions of the Stockholder Representative;

               (ii) all actions, decisions and instructions of the Stockholder
     Representative shall be conclusive and binding upon all of the Company
     Stockholders and no Company Stockholder shall have any cause of action
     against the Stockholder Representative for any action taken or not taken,
     decision made or instruction given by the Stockholder Representative under
     this Agreement, except for fraud or willful breach of this Agreement by the
     Stockholder Representative;

               (iii) the provisions of this Section 1.11 are independent and
     severable, are irrevocable and coupled with an interest and shall be
     enforceable notwithstanding any rights or remedies that any Company
     Stockholder may have in connection with the transactions contemplated by
     this Agreement; and

               (iv) the provisions of this Section 1.11 shall be binding upon
     the heirs, legal representatives, successors and assigns of each Company
     Stockholder, and any references in this Agreement to a Company Stockholder
     or the Company Stockholders

                                      -13-

<PAGE>

     shall mean and include the successors to the Company Stockholder rights
     hereunder, whether pursuant to testamentary disposition, the laws of
     descent and distribution or otherwise.

          (e) Following the Closing and subject to the terms of Section 6.7
hereof, Parent shall provide the Stockholder Representative with reasonable
access to such information about the Company as the Stockholder Representative
may reasonably request for purposes of performing his duties and exercising the
rights of the Company Stockholders hereunder.

          (f) Any fees and expenses incurred by the Stockholder Representative
in connection with actions taken pursuant to the terms of this Agreement,
including reasonable, actual expenses incurred or paid to counsel or other third
parties in investigating, negotiating, arbitrating or settling any claim
hereunder will be paid by the Company Stockholders in proportion to their
respective pro rata interest in the Base Consideration and may, on request of
the Stockholder Representative, be paid from amounts deposited in the Working
Capital Escrow or Indemnity Escrow that are released from escrow and
distributable to the Company Stockholders as provided in the Escrow Agreement.
At any time prior to the Indemnity Escrow Termination Date, the Stockholder
Representative may by written notice to the Escrow Agent make a claim for
reimbursement of Transaction Expenses incurred through the date of such notice
as well as an additional amount of up to $250,000 for future Transaction
Expenses to the extent reasonably budgeted in good faith by the Stockholder
Representative for resolution of any disputes between members of the Parent
Group and the Company Stockholders under this Agreement or any Transaction
Document as provided in this Section 1.11. Upon the release of the Working
Capital Escrow or the Indemnity Escrow to the Company Stockholders, the Escrow
Agent shall pay to the Stockholder Representative, out of amounts otherwise
payable to the Company Stockholders from either the Working Capital Escrow or
the Indemnity Escrow, any unpaid Expense Claims (as defined in, and in
accordance with the terms of, the Escrow Agreement). Any amounts held by the
Stockholder Representative for the payment of Transaction Expenses shall be
released to the Company Stockholders on the earlier of (i) such date when the
Stockholder Representative determines in good faith that no additional
Transaction Expenses will be incurred, and (ii) the second anniversary of the
Indemnity Escrow Release Date.

     1.12 DELIVERY OF MERGER CONSIDERATION.

          (a) At the Closing or as soon as practicable thereafter, each Company
Stockholder shall deliver to Parent (i) all certificates which immediately prior
to the Effective Time represented issued and outstanding shares of Company
Capital Stock (individually, a "CERTIFICATE" and collectively, the
"CERTIFICATES") or an affidavit of lost certificate and an indemnity with
respect to such lost certificate in form and substance reasonably satisfactory
to Parent (the "AFFIDAVIT") and (ii) an executed Letter of Transmittal and
Certificate in the form of Exhibit C hereto (the "TRANSMITTAL CERTIFICATE").
Each Company Stockholder shall be entitled to receive in exchange therefor the
applicable Merger Consideration allocable to such Company Stockholder, including
a certificate or certificates representing the shares of Parent Common Stock
included therein (excluding the Indemnification Escrow and the Working Capital
Escrow). The total amount of Merger Consideration issuable to each Company
Stockholder in exchange for his or its shares shall be listed on Schedule II
hereto, as updated as of the Effective Time by

                                      -14-

<PAGE>

the Company and delivered to Parent at the Closing. If any certificate for
shares of Parent Common Stock is to be issued in a name other than that in which
the certificate surrendered in exchange therefor is registered, it will be a
condition of the issuance thereof that Parent be satisfied that (i) such
transfer complies with all applicable state and federal securities laws, and
(ii) the certificate so surrendered is properly endorsed and otherwise in proper
form for transfer.

          (b) Until surrendered, each Certificate shall, after the Effective
Time, represent only the right to receive the Merger Consideration into which
the shares of Company Capital Stock formerly represented thereby shall have been
converted pursuant to Section 1.6 hereof. Any dividends or other distribution
declared after the Effective Time with respect to the Parent Common Stock
issuable as part of such Merger Consideration shall be paid to the holder of any
Certificate when the holder thereof surrenders such Certificate or an Affidavit
in lieu thereof. At and after the Effective Time, the holders of any Company
Capital Stock shall cease to have any rights as Company Stockholders, except for
the right to surrender Certificates pursuant to Section 1.12(a). As of the
Closing, the stock transfer books of the Company shall be closed, and after the
Closing there shall be no transfers on such stock transfer books.

          (c) FRACTIONAL SHARES. No fraction of a share of Parent Common Stock
will be issued by virtue of the Merger, but in lieu thereof each holder of
shares of Company Common Stock who would otherwise be entitled to a fraction of
a share of Parent Common Stock (after aggregating all fractional shares of
Parent Common Stock to be received by such holder) shall receive from Parent an
amount of cash (rounded to the nearest whole cent) equal to the product of (i)
such fraction, multiplied by (ii) $2.80.

          (d) REQUIRED WITHHOLDING. Each of Parent, the Initially Surviving
Corporation and the Surviving Corporation shall be entitled to deduct and
withhold from any consideration payable or otherwise deliverable pursuant to
this Agreement to any holder or former holder of Company Capital Stock such
amounts as may be required to be deducted or withheld therefrom under the Code
or under any provision of state, local or foreign tax law or under any other
applicable Legal Requirement. To the extent such amounts are so deducted or
withheld, such amounts shall be treated for all purposes under this Agreement as
having been paid to the person to whom such amounts would otherwise have been
paid.

          (e) NO LIABILITY. Notwithstanding anything to the contrary in this
Section 1.12, neither Parent, the Initially Surviving Corporation, the Surviving
Corporation nor any other party hereto shall be liable to a holder of shares of
Parent Common Stock or Company Common Stock for any amount properly paid to a
public official pursuant to any applicable abandoned property, escheat or
similar law.

     1.13 NO FURTHER OWNERSHIP RIGHTS IN COMPANY CAPITAL STOCK. All Merger
Consideration issued in accordance with the terms hereof shall be deemed to have
been issued in full satisfaction of all rights pertaining to such shares of
Company Capital Stock, and there shall be no further registration of transfers
on the records of the Initially Surviving Corporation or the Surviving
Corporation of shares of Company Capital Stock that were outstanding immediately
prior to the Effective Time. If, after the Effective Time, Certificates are
presented to the Initially Surviving Corporation or the Surviving Corporation
for any reason, they shall be canceled and exchanged as provided in this Article
1.

                                      -15-
<PAGE>

     1.14 RESTRICTED STOCK. If any shares of Company Common Stock that are
outstanding immediately prior to the Effective Time are unvested or are subject
to a repurchase option, risk of forfeiture or other condition providing that
such shares ("COMPANY RESTRICTED STOCK") may be forfeited or repurchased by the
Company upon any termination of the shareholders' employment, directorship or
other relationship with the Company (and/or any affiliate of the Company) under
the terms of any restricted stock purchase agreement or other agreement with the
Company that does not by its terms provide that such repurchase option, risk of
forfeiture or other condition fully lapses upon consummation of the Merger, then
(a) the shares of Parent Common Stock issued upon the conversion of such shares
of Company Common Stock in the Merger will, unless otherwise accelerated by
their terms as a result of the Merger, continue to be unvested and subject to
the same repurchase options, risks of forfeiture or other conditions following
the Effective Time, and the certificates representing such shares of Parent
Common Stock may accordingly be marked with appropriate legends noting such
repurchase options, risks of forfeiture or other conditions, and (b) the right
of such holder of Company Restricted Stock to receive consideration in the form
of cash in respect of any shares of Company Common Stock that were unvested at
the Effective Time ("Unvested Cash Consideration") shall continue to be unvested
and subject to the same risks of forfeiture or other conditions following the
Effective Time. Any such Unvested Cash Consideration will be retained by Parent
at the Closing and will be paid by Parent to the former holder of such Company
Restricted Stock upon the vesting of the corresponding installments of Parent
Common Stock that were delivered as merger consideration. The Company shall take
all actions that may be necessary to ensure that, from and after the Effective
Time, Parent is entitled to exercise any such repurchase option or other right
set forth in any such restricted stock purchase agreement or other agreement. A
listing of the holders of Company Restricted Stock, together with the number of
shares and the vesting schedule of Company Restricted Stock held by each, in
each case assuming the Merger has occurred, is set forth in Part 1.14 of the
Company Disclosure Schedule.

     1.15 TAX CONSEQUENCES. It is intended by the parties hereto that the Merger
shall constitute a reorganization described in section 368 of the Code. The
parties hereto adopt this Agreement as a "plan of reorganization" within the
meaning of sections 1.368-2(g) and 1.368-3(a) of the United States Income Tax
Regulations (the "TREASURY REGULATIONS").

     1.16 TAKING OF NECESSARY ACTION; FURTHER ACTION. If, at any time after the
Effective Time, any further action is reasonably necessary or desirable to carry
out the purposes of this Agreement and to vest the Initially Surviving
Corporation and, thereafter, the Surviving Corporation, with full right, title
and possession to all assets, property, rights, privileges, powers and
franchises of the Company, the officers and directors of the Company and each
Merger Sub will take all such lawful and necessary action. Parent shall cause
each Merger Sub to perform all of its obligations relating to this Agreement and
the transactions contemplated hereby.

     1.17 DISSENTERS' RIGHTS.

          (a) Notwithstanding any provision of this Agreement to the contrary
other than Section 1.17(b), any shares of Company Common Stock held by a holder
who has demanded and perfected appraisal rights for such shares in accordance
with Section 3-203 of the MGCL and who, as of the Effective Time, has not
effectively withdrawn or lost such appraisal or dissenters' rights ("DISSENTING
SHARES"), shall not be converted into or represent a right to

                                      -16-

<PAGE>

receive Merger Consideration pursuant to Section 1.6, but instead shall be
converted into the right to receive only such consideration as may be determined
to be due with respect to such Dissenting Shares under the MGCL. From and after
the Effective Time, a holder of Dissenting Shares shall not be entitled to
exercise any of the voting rights or other rights of a shareholder of the
Initially Surviving Corporation or the Surviving Corporation.

          (b) Notwithstanding the provisions of Section 1.6(a), if any holder of
shares of Company Common Stock who demands appraisal of such shares under the
MGCL shall effectively withdraw or lose (through failure to perfect or
otherwise) the right to appraisal, then, as of the later of the Effective Time
and the occurrence of such event, such holder's shares shall no longer be
Dissenting Shares and shall automatically be converted into and represent only
the right to receive Merger Consideration as provided in Section 1.6(a) without
interest thereon, upon surrender of the certificate representing such shares
pursuant to Section 1.12.

          (c) The Company shall give Parent (i) prompt notice of any written
demands for appraisal of any shares of Company Common Stock, withdrawals of such
demands, and any other instruments served pursuant to the MGCL and received by
the Company which relate to any such demand for appraisal and (ii) the
opportunity to participate in all negotiations and proceedings which take place
prior to the Effective Time with respect to demands for appraisal under the
MGCL. The Company shall not, except with the prior written consent of Parent,
voluntarily make any payment with respect to any demands for appraisal of
Company Common Stock or offer to settle or settle any such demands.

     1.18 CROSS REFERENCES.

     The following terms defined elsewhere in this Agreement in the Sections set
forth below shall have the respective meanings therein defined:

<TABLE>
<CAPTION>
                 Term                          Section
                 ----                   --------------------
<S>                                     <C>
Accounting Arbitrator                   Section 1.9(b)(iii)
Adjusted Working Capital                Section 1.8
Affidavit                               Section 1.12(a)
Agreement                               Preamble
Antitrust Filings                       Section 6.3(a)
Articles of Merger                      Section 1.2
Base Cash                               Section 1.6(b)(vi)
Base Consideration                      Section 1.6(b)(iii)
Base Parent Shares                      Section 1.6(b)(v)
Bonus Recipients                        Section 6.14(a)
Certificates                            Section 1.12(a)
Claims                                  Section 7.4(g)(i)
Closing                                 Section 1.2(a)
Closing Certificate                     Section 1.9(a)
Closing Date                            Section 1.2(a)
Code                                    Recitals
Company                                 Preamble
</TABLE>

                                      -17-

<PAGE>

<TABLE>
<CAPTION>
                 Term                          Section
                 ----                   --------------------
<S>                                     <C>
Company Balance Sheet                   Section 2.5(a)
Company Capital Stock                   Section 1.6(b)(vii)
Company Charter Documents               Section 2.1(c)
Company Common Stock                    Section 2.2(a)
Company Contract                        Section 2.16
Company Convertible Securities          Section 1.6(b)(viii)
Company Copyrights                      Section 2.10(a)
Company Disclosure Schedule             Article 2
Company Financial Statements            Section 2.5(a)
Company Marks                           Section 2.10(a)
Company Patents                         Section 2.10(a)
Company Permits                         Section 2.11(b)
Company Restricted Stock                Section 1.14
Company Secret Information              Section 2.10(a)
Company Series A Preferred Stock        Section 2.2(a)
Company Series B-1 Preferred Stock      Section 2.2(a)
Company Series C-1 Preferred Stock      Section 2.2(a)
Company Series C-2 Preferred Stock      Section 2.2(a)
Company Series D Preferred Stock        Section 2.2(a)
Company Series E Preferred Stock        Section 2.2(a)
Company Stockholders                    Section 1.6(b)(ix)
Confidentiality Agreement               Section 6.6
Damages                                 Section 7.1
Dispute Notice                          Section 1.9(b)(ii)
Dissenting Shares                       Section 1.17(a)
Earn-Out Bonus                          Section 6.14(b)
Earn-Out Consideration                  Section 1.6(c)
Earn-Out Payment Date                   Section 1.6(c)(iii)
Effective Time                          Section 1.2
Escrow Agent                            Section 1.10
Escrow Agreement                        Section 1.10
Escrow Value                            Section 7.4(g)(ii)
eStara Services                         Section 1.6(c)
eStara Revenue                          Section 1.6(c)
Excluded Adjustment                     Section 1.8(b)
Exclusively licensed                    Section 2.10(a)
GAAP                                    Section 2.5(a)
Holder                                  Section 6.1(a)
Indemnified Party                       Section 7.4(a)
Indemnifying Party                      Section 7.4(a)
Indemnity Escrow                        Section 1.10(a)
Ineligible Stockholder                  Section 1.6(b)(iv)
Ineligible Recipient                    Section 6.14(a)
Information Statement                   Section 6.4
Initially Surviving Corporation         Section 1.1
</TABLE>

                                      -18-

<PAGE>

<TABLE>
<CAPTION>
                 Term                          Section
                 ----                   --------------------
<S>                                     <C>
Intellectual Property Rights            Section 2.10(a)
Investor Questionnaire                  Section 3.7
Key Employee                            Section 8.3(j)
Leased Real Property                    Section 2.9(a)
Lock-Up Agreement                       Section 6.2(a)
Merger                                  Recitals
Merger Consideration                    Section 1.6(b)(i)
Merger Sub                              Preamble
Merger Sub 1                            Preamble
Merger Sub 2                            Preamble
Merger Sub 1 Common Stock               Section 1.6(f)
MGCL                                    Recitals
Open Source Materials                   Section 2.10(n)
Other Filings                           Section 6.3(a)
Parent                                  Preamble
Parent Charter Documents                Section 4.1(b)
Parent Claim                            Section 7.3(b)
Parent Common Stock                     Section 4.2(a)
Parent Disclosure Schedule              Article 4
Parent Financial Statements             Section 4.7
Parent Group                            Section 7.1
Parent SEC Documents                    Section 4.7
Per Share Merger Consideration          Section 1.6(b)(ii)
Specified Holder Permitted Transferee   Section 6.2(a)
Pre-Closing Tax Period                  Section 6.5(b)(i)
Principal Stockholders                  Preamble
Program Code                            Section 2.10(n)
Registrable Securities                  Section 6.1(a)
Registration Statement                  Section 6.1(b)
Rights Agreement                        Section 1.6(a)
SBA                                     Section 10.4
Second Articles of Merger               Section 1.2(a)
Second Step Agreement of Merger         Section 1.2(a)
Second Step Merger                      Recitals
Sell                                    Section 6.2(a)
Software                                Section 2.10(a)
Special Meeting                         Section 6.4
Specified Holder                        Article 3A
Stockholder Claim                       Section 7.3(b)
Stockholder Representative              Section 1.11
Stockholders Group                      Section 7.2
Straddle Period                         Section 6.5(b)(ii)
Survival Period                         Section 7.3
Surviving Corporation                   Section 1.3(b)
Third-Party Claims                      Section 7.4(d)
</TABLE>

                                      -19-

<PAGE>

<TABLE>
<CAPTION>
                 Term                          Section
                 ----                   --------------------
<S>                                     <C>
Threshold                               Section 7.4(g)(i)
Transaction Bonuses                     Section 1.8(d)
Transaction Expense                     Section 1.8(c)
Transmittal Certificate                 Section 1.12(a)
Treasury Regulations                    Section 1.15
Voting Agreements                       Recitals
Working Capital Escrow                  Section 1.10(b)
</TABLE>

     1.19 CERTAIN DEFINITIONS. As used herein, the following terms shall have
the following meanings:

          (a) "ACQUISITION PROPOSAL" shall mean any offer or proposal (other
than an offer or proposal by Parent or either Merger Sub) relating to or
involving: (i) any acquisition or purchase by any Person or "group" (as defined
under Section 13(d) of the Exchange Act and the rules and regulations
thereunder) of beneficial ownership (as defined in Rule 13d-3 under the Exchange
Act) of more than 15% of the total number of outstanding voting securities of
any Target Company; (ii) any tender offer or exchange offer that if consummated
would result in any Person or "group" (as defined under Section 13(d) of the
Exchange Act and the rules and regulations thereunder) having beneficial
ownership (as defined in Rule 13d-3 under the Exchange Act) of more than 15% of
the total number of outstanding voting securities of any Target Company; (iii)
any merger, consolidation, business combination or similar transaction involving
any Target Company pursuant to which the stockholders of the Company or such
Subsidiary immediately preceding such transaction hold less than 85% of the
equity interests in the surviving or resulting entity of such transaction; (iv)
any sale, lease, exchange, transfer, license (other than in the ordinary course
of business), acquisition, or disposition of any material assets of any Target
Company; or (v) any liquidation or dissolution of any Target Company.

          (b) "AFFILIATE" of a specified Person shall mean each other Person who
controls, is controlled by, or is under common control with the specified
Person.

          (c) "COBRA" shall mean the Consolidated Omnibus Budget Reconciliation
Act of 1985, as amended.

          (d) "COMMERCIALLY AVAILABLE SOFTWARE" shall mean any commercially
available third-party "off-the-shelf" software licensed to the Company on a
non-exclusive basis.

          (e) "COMMON SHARE EQUIVALENT" shall mean each share of Company Common
Stock (i) outstanding immediately prior to the Effective Time or (ii) into or
for which each share of Company Capital Stock or Company Convertible Securities
is convertible or exercisable as of the Effective Time.

          (f) "COMPANY AGREEMENTS" shall mean (i) the Second Amended and
Restated Stockholders Agreement dated as July 27, 2001, as amended by the
Amendment No. 1 to Second Amended and Restated Stockholders Agreement dated as
of February 28, 2006, and (ii) the Second Amended and Restated Registration
Rights Agreement dated as of July 27, 2001, as

                                      -20-

<PAGE>

amended by the First Amendment to Second Amended and Restated Registration
Rights Agreement dated as of October 10, 2001.

          (g) "COMPANY EMPLOYEE PLAN" shall mean any program, policy, practice,
trust, Contract or other plan providing for compensation, severance, termination
pay, performance awards, stock or stock-related awards, fringe benefits or other
benefits or remuneration of any kind, whether written or unwritten, funded or
unfunded, which is or has been maintained, contributed to, or required to be
contributed to, by any Target Company for the benefit of any Employee or any
relative or dependent of any Employee, including (i) each "employee benefit
plan" within the meaning of Section 3(3) of ERISA, (ii) any stock, stock option,
stock appreciation right, stock purchase, bonus, deferred compensation, pension,
profit-sharing, commission, retirement, severance, retention, change of control,
or similar plan or Contract, and (iii) any provision in any staff handbook or
written employment policies for any Target Company.

          (h) "COMPANY MATERIAL ADVERSE EFFECT" means any change, event,
circumstance or effect (whether or not such change, event, circumstance or
effect constitutes a breach of a representation, warranty or covenant regarding
the Company in this Agreement) that is, or is reasonably likely to be,
materially adverse to the business, assets (including intangible assets),
capitalization, financial condition, operations or results of operations of the
Target Companies, taken as a whole, exclusive of any effect arising from or
related to: (i) any general condition affecting the industry in which the
Company is engaged and that do not affect the Company disproportionately, as
compared to other companies in such industry; (ii) the announcement or pendency
of this Agreement or any of the transactions contemplated hereby, or the
disclosure of the identity of Parent as the acquiror of the Company; (iii) any
action taken by Company Stockholders or the Company at Parent's or either Merger
Sub's request or pursuant to a requirement in the Transaction Documents; (iv)
acts of war or terrorism; (v) general economic, political and financial market
changes that do not affect the Company disproportionately; or (vi) any action
(or failure to take any action) by Parent or either Merger Sub, except as
required or contemplated by this Agreement.

          (i) "COMPANY OPTION" shall mean each outstanding unexercised option to
purchase Company Stock, whether or not vested or fully exercisable, granted
under any Company Option Plan.

          (j) "COMPANY OPTION PLAN(S)" shall mean the Company's 2002 Equity
Incentive Plan.

          (k) "COMPANY WARRANT" shall mean each of those certain warrants to
purchase Common Stock of the Company originally issued (i) on or about October
6, 2000 to Acon Venture Partners, L.P. and (ii) on or about July 24, 2002 to
persons that currently are the holders of the Company's Series E Preferred
Stock.

          (l) "CONFIDENTIAL INFORMATION" shall mean any information concerning
the business and affairs of Parent and its Subsidiaries or the Target Companies,
as the case may be, that is not already generally available to the public, other
than (i) information which becomes generally available to the public other than
as a result of a disclosure in violation of this

                                      -21-

<PAGE>

Agreement, and (ii) information which becomes available to the applicable Party
on a non-confidential basis from a Person who is not known or reasonably
suspected (in each case after reasonable inquiry) by such Party to be bound not
to disclose the information. All information concerning the business and affairs
of Parent and its Subsidiaries and the Target Companies (including the
information contained in the Company Disclosure Schedule) shall be presumed to
be Confidential Information, and the applicable Party who receives such
Confidential Information shall have the burden of proving that any such
information is not Confidential Information.

          (m) "CONTRACT" shall mean any contract, agreement, instrument,
license, lease, mortgage, note, bond, debenture, indenture, guarantee, permit,
franchise, concession, plan, option, warranty, purchase order, insurance policy,
obligation, covenant, undertaking, arrangement or other legally binding
commitment or of any nature, whether written or oral.

          (n) "EMPLOYEE" shall mean any current, former or retired employee,
officer, director of the Company or any ERISA Affiliate.

          (o) "EMPLOYEE AGREEMENT" shall mean each management, employment,
retention, severance, change-of-control, consulting, indemnification,
relocation, repatriation, expatriation, visa, work permit or similar Contract
between the Company or any ERISA Affiliate and any Employee or consultant,
including any offer letter.

          (p) "ENCUMBRANCES" shall mean any lien, pledge, hypothecation, charge,
mortgage, security interest, encumbrance, restrictive covenant, claim,
infringement, interference, option, right of first refusal, preemptive right,
community property interest or restriction of any nature (including any
restriction on the voting of any security, any restriction on the transfer of
any security or other asset, any restriction on the receipt of any income
derived from any asset, any restriction on the use of any asset and any
restriction on the possession, exercise or transfer of any other attribute of
ownership of any asset) and, in the case of leasehold real property, rent and
service charges.

          (q) "ENVIRONMENTAL CLAIM" shall mean any written notice alleging
potential liability (including potential liability for investigatory costs,
cleanup costs, response or remediation costs, natural resources damages,
property damages, personal injuries, fines or penalties) arising out of, based
on or resulting from (a) the presence, or release of any Environmental Material
at any location, whether or not owned by that party or any of its Affiliates or
(b) circumstances forming the basis of any violation, or alleged violation, of
any Environmental Law and which could reasonably be expected to have a Company
Material Adverse Effect.

          (r) "ENVIRONMENTAL LAWS" shall mean any and all statutes, regulations
and ordinances relating to the protection of public health, safety or the
environment.

          (s) "ENVIRONMENTAL MATERIAL" shall mean PCBs, asbestos, petroleum and
its by-products, any substance that has been designated by any Governmental
Entity or by applicable law to be radioactive, toxic, hazardous or otherwise a
danger to public health or the

                                      -22-

<PAGE>

environment, and all other substances or constituents that are regulated by, or
form the basis of liability under, any Environmental Law.

          (t) "ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.

          (u) "ERISA AFFILIATE" shall mean any other Person under common control
with the Company within the meaning of Sections 414(b), (c), (m) or (o) of the
Code and the regulations issued thereunder.

          (v) "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended.

          (w) "FAMILY MEMBER" shall mean any spouse, parent, grandparent, child,
grandchild or sibling or any other person sharing the same household.

          (x) "FMLA" shall mean the Family Medical Leave Act of 1993, as
amended.

          (y) "GOVERNMENTAL ENTITY" shall mean any court or any administrative,
regulatory or governmental body, agency, commission, panel, authority,
organization or instrumentality, whether domestic, foreign or international.

          (z) "IRS" shall mean the Internal Revenue Service.

          (aa) "KNOWLEDGE" with respect to the Company and a particular fact or
matter, shall mean: (i) the actual awareness of such fact or matter by any
officer or director of the Company or any of the following employees of the
Company: John Federman, Joseph Siegrist, and Laurence Stock, (ii) the awareness
that any such officer, director or employee would be expected to obtain in the
course of conducting a reasonably comprehensive investigation of matters within
the scope of such person's responsibilities concerning the existence of such
fact or matter, and (iii) any information contained in the Company's books and
records that any such officer, director or employee would be expected to obtain
in the course of such person's recent review of such books and records, and
"KNOWN" shall have the corresponding meaning.

          (bb) "LEGAL REQUIREMENT" shall mean any federal, state, local,
municipal, provincial, foreign, international or other law, statute,
constitution, treaty, principle of common law, resolution, ordinance, code,
edict, decree, rule, regulation, ruling or requirement issued, enacted, adopted,
promulgated, implemented or otherwise put into effect by or under the authority
of any Governmental Entity.

          (cc) "MULTIEMPLOYER PLAN" shall mean any Pension Plan (as defined
below) which is a "multiemployer plan," as defined in Section 3(37) of ERISA.

          (dd) "PARENT MATERIAL ADVERSE EFFECT" means any change, event,
circumstance or effect (whether or not such change, event, circumstance or
effect constitutes a breach of a representation, warranty or covenant regarding
Parent in this Agreement) that is or is reasonably likely to be materially
adverse to the business, assets (including intangible assets), capitalization,
financial condition, operations, results of operations or prospects of Parent;
provided, however,

                                      -23-

<PAGE>

that fluctuations in the trading price of the Parent Common Stock, in and of
themselves, shall not constitute a Parent Material Adverse Effect, and exclusive
of any effect arising from or related to: (i) any general condition affecting
the industry in which Parent is engaged and that do not affect Parent
disproportionately; (ii) the announcement or pendency of this Agreement or any
of the transactions contemplated hereby; (iii) any action taken by Parent or
either Merger Sub at the Company's request or pursuant to a requirement in the
Transaction Documents; (iv) acts of war or terrorism; (v) general economic,
political and financial market changes that do not affect Parent
disproportionately, or (v) any action or omission by the Company.

          (ee) "PENSION PLAN" shall mean each Company Employee Plan which is an
"employee pension benefit plan," within the meaning of Section 3(2) of ERISA.

          (ff) "PERMITTED TRANSFER" shall mean a transfer as a gift, partnership
distribution or other non-sale related transfer without consideration by a
Holder to a Permitted Transferee.

          (gg) "PERMITTED TRANSFEREE" shall mean (i) with respect to a
partnership, its partners or former partners in accordance with their
partnership interests, (b) with respect to a corporation, its stockholders in
accordance with their interest in the corporation, (c) with respect to a limited
liability company, its members or former members in accordance with their
interest in the limited liability company, and (d) with respect to an individual
party, any Family Member of such party.

          (hh) "PERSON" shall mean any individual, corporation (including any
non-profit corporation), general partnership, limited partnership, limited
liability partnership, joint venture, estate, trust, company (including any
limited liability company or joint stock company), firm or other enterprise,
association, organization, entity or Governmental Entity.

          (ii) "REQUIRED STOCKHOLDER VOTE" shall mean (i) the affirmative vote,
at a meeting of the stockholders of the Company duly called in accordance with
Company Charter Documents and Sections 2-502 and 2-104(b) of the MGCL, of the
holders of a majority of the votes entitled to be cast by the holders of the
outstanding shares of Company Capital Stock (voting together as a single class
on an as-converted to Company Common Stock basis); and (ii) the affirmative vote
or consent, as the case may be, of the holders of at least 60% of the Series C
Preferred Stock, voting as a separate class.

          (jj) "SUBSIDIARY" of a specified entity shall mean any corporation,
partnership, limited liability company, joint stock company, joint venture or
other legal entity of which the specified entity (either alone or through or
together with any other Subsidiary) owns, directly or indirectly, 50% or more of
the stock or other equity, partnership or other ownership interests the holders
of which are generally entitled to vote for the election of the Board of
Directors or other governing body of such corporation or other legal entity.

          (kk) "TARGET COMPANY" shall mean any of the Company and its
Subsidiaries.

          (ll) "TAX" or "TAXES" shall mean any federal, state, local, municipal,
provincial, foreign or international income, gross receipts, license, payroll,
telecommunications, employment, excise, severance, stamp, stamp duty, stamp duty
land tax, occupation, premium,

                                      -24-

<PAGE>

windfall profits, environmental (including taxes under Code Section 59A),
customs duties, capital stock, franchise, profits, withholding, social security
(or similar), unemployment, disability, real property, personal property, sales,
use, transfer, registration, value-added, alternative or add-on minimum,
estimated, or other tax of any kind whatsoever, including any interest, penalty,
or addition thereto, whether disputed or not and including any obligations to
indemnify or otherwise assume or succeed to the Tax liability of any other
Person.

          (mm) "TAX RETURN" shall mean any return (including any land
transaction return), declaration, report, claim for refund, notice, accounting
computations, assessment, election or information return or statement relating
to Taxes, including any schedule or attachment thereto, and including any
amendment thereof.

          (nn) "TRANSACTION DOCUMENTS" shall mean this Agreement, the Second
Step Agreement of Merger, the Voting Agreements, the Escrow Agreement and each
of the other agreements and instruments to be executed and delivered by any
party in connection with the consummation of the transactions contemplated
hereby.

                                    ARTICLE 2
                  REPRESENTATIONS AND WARRANTIES OF THE COMPANY

     As of the date of this Agreement and as of the Closing Date, the Company
represents and warrants to Parent and each Merger Sub as set forth in this
Article 2, subject to any exceptions expressly stated in the disclosure schedule
delivered by the Company to Parent dated as of the date hereof and certified on
behalf of the Company by a duly authorized officer of the Company (the "COMPANY
DISCLOSURE SCHEDULE"). Exceptions on the Company Disclosure Schedule shall
specifically identify the representation to which they relate; provided,
however, that any matter disclosed pursuant to one section or subsection of the
Company Disclosure Schedule is deemed disclosed for such other sections or
subsections of the Company Disclosure Schedule as, and only to the extent that,
it is readily apparent that such matter relates to such other section or
subsection of the Company Disclosure Schedule and the level of particularity and
manner of disclosure of the matter expressly disclosed in one section or
subsection of the Company Disclosure Schedule would make a reasonable person
aware that such disclosure is relevant to such other sections or subsections.

     2.1 ORGANIZATION; SUBSIDIARIES.

          (a) Each Target Company (i) is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction in which it is
organized; (ii) has the requisite corporate or other power and authority to own,
lease and operate its assets and properties and to carry on its business as now
being conducted; and (iii) is duly qualified or licensed to do business in each
jurisdiction where the character of the properties owned, leased or operated by
it or the nature of its activities makes such qualification or licensing
necessary, except where the failure to be so qualified or licensed would not
have a Company Material Adverse Effect. Part 2.1(a) of the Company Disclosure
Schedule lists each Subsidiary of the Company and each jurisdiction where any
Target Company is qualified or licensed to do business. Part 2.1(a) of the
Company Disclosure Schedule indicates the jurisdiction of organization of each
entity listed therein, the capitalization of each such entity (other than the

                                      -25-

<PAGE>

Company), and the ownership of all securities of such entity, including the
direct or indirect equity interest of each Target Company therein (all of which
are held free and clear of all Encumbrances).

          (b) Other than the Subsidiaries identified in Part 2.1(a) of the
Company Disclosure Schedule, no Target Company owns any capital stock of, or any
equity interest of any nature in, any Person. No Target Company has agreed or is
obligated to make, or is bound by any written or oral Contract as in effect as
of the date hereof or as may hereinafter be in effect under which it may become
obligated to make any future investment in or capital contribution to any other
Person. No Target Company has at any time been a general partner of any general
partnership, limited partnership or other Person.

          (c) The Company has delivered or made available to Parent true and
correct copies of the Articles of Incorporation and Bylaws of the Company and
similar governing instruments of each of its Subsidiaries, each as amended to
date (collectively, the "COMPANY CHARTER DOCUMENTS"), and each such instrument
is in full force and effect. No Target Company is in violation of any of the
provisions of the Company Charter Documents. The Company has delivered or made
available to Parent all proposed or considered amendments to the Company Charter
Documents that the Company intends to adopt on or prior to the Closing Date.

          (d) Part 2.1(d) of the Company Disclosure Schedule lists all of the
current directors and officers (or equivalent) of each Target Company.

     2.2 COMPANY CAPITALIZATION.

          (a) The authorized capital stock of the Company consists solely of (i)
80,000,000 shares of Common Stock, par value $0.01 per share (the "COMPANY
COMMON STOCK"), of which 23,485,901 shares are issued and outstanding on the
date of this Agreement and (ii) 30,000,000 shares of Company Preferred Stock, of
which (a) 213,440 are designated Series A Convertible Preferred Stock, par value
$0.01 per share (the "COMPANY SERIES A PREFERRED STOCK"), all of which are
issued and outstanding on the date of this Agreement, (b) 1,409,595 are
designated Series B-1 Convertible Preferred Stock, par value $0.01 per share
(the "COMPANY SERIES B-1 PREFERRED STOCK"), none of which are issued and
outstanding on the date of this Agreement, (c) 1,373,191 are designated Series
C-1 Convertible Preferred Stock, par value $0.01 per share (the "COMPANY SERIES
C-1 PREFERRED STOCK"), all of which are issued and outstanding on the date of
this Agreement, (d) 2,023,097 are designated Series C-2 Convertible Preferred
Stock, par value $0.01 per share (the "COMPANY SERIES C-2 PREFERRED STOCK"), of
which 2,023,091 are issued and outstanding on the date of this Agreement, (e)
1,956,565 are designated Series D Convertible Preferred Stock, par value $0.01
per share (the "COMPANY SERIES D PREFERRED STOCK"), all of which are issued and
outstanding on the date of this Agreement, and (f) 7,000,000 are designated
Series E Convertible Preferred Stock, par value $0.01 per share (the "COMPANY
SERIES E PREFERRED STOCK"), of which 6,890,586 are issued and outstanding on the
date of this Agreement. Except as aforesaid, there are no other authorized,
issued or outstanding shares of capital stock of the Company. The outstanding
shares of Company Capital Stock and Common Share Equivalents are held of record
by the Persons named in Part 2.2(a) of the Company Disclosure Schedule in the
amounts set forth opposite their respective names. All outstanding shares of
Company Stock are duly authorized, validly issued,

                                      -26-

<PAGE>

fully paid and nonassessable and are not subject to preemptive rights created by
statute, the Certificate of Incorporation or Bylaws of the Company or, except as
provided in the Company Agreements (each of which will expire or be terminated
in accordance with its terms at or before the Effective Time), any Contract to
which any Target Company is a party or by which it is bound. There are no shares
of Company Stock held in treasury by the Company.

          (b) The Company Option Plans are the only equity plans of any Target
Company. Part 2.2(b) of the Company Disclosure Schedule sets forth the following
information with respect to each Company Option and Company Warrant outstanding
on the date of this Agreement: (i) the name of the optionee or holder; (ii) the
number and type of shares of Company Stock subject to such Company Option or
Company Warrant; (iii) the exercise price of such Company Option or Company
Warrant; (iv) the date on which such Company Option was granted or assumed; (v)
the date on which such Company Option expires, (vi) if applicable, the Company
Option Plan pursuant to which such Company Option was granted, and (vii) whether
the exercisability of such Company Option will be accelerated in any way by the
transactions contemplated by this Agreement, and indicates the extent of any
such acceleration. The Company has made available to Parent accurate and
complete copies of each Company Option Plan, each Company Warrant and each form
of Contract evidencing any Company Options. Except as set forth in Part 2.2(b)
of the Company Disclosure Schedule, there are no Contracts or arrangements of
any character to which any Target Company is bound obligating any Target Company
to accelerate the vesting of any Company Option as a result of any of the
transactions contemplated hereby. All Company Options may be terminated by the
Company as provided in Section 1.6(e)(i).

          (c) All securities of each Target Company have been issued and granted
in compliance in all material respects with (i) all applicable securities laws
and other applicable Legal Requirements and (ii) all requirements set forth in
applicable Contracts.

          (d) Schedule II accurately sets forth as of the date of this
Agreement, and any updated Schedule II delivered by the Company to Parent at the
Closing will accurately set forth as of the Effective Time, the allocation of
the Merger Consideration and the Escrow Fund to each Company Stockholder
pursuant to the Articles of Incorporation of the Company and this Agreement.

     2.3 OBLIGATIONS WITH RESPECT TO CAPITAL STOCK. Except as set forth in Parts
2.2(b) and 2.3 of the Company Disclosure Schedule, there are no equity
securities, partnership interests or other ownership interests of any class, or
any securities exchangeable or convertible into or exercisable for any of the
foregoing, issued, reserved for issuance or outstanding with respect to the
Company or, except as set forth in Part 2.1(a) of the Company Disclosure
Schedule, with respect to any other Target Company. Except as set forth in Part
2.2(b) or Part 2.3 of the Company Disclosure Schedule, there are no
subscriptions, options, warrants, equity securities, convertible debt,
partnership interests or other ownership interests, calls, rights (including
preemptive rights) or Contracts of any character to which any Target Company is
a party or by which it is bound obligating any Target Company to issue, deliver
or sell, or repurchase, redeem or otherwise acquire, any equity securities,
partnership interests or other ownership interests of any Target Company or
obligating any Target Company to grant, extend, accelerate the vesting of or
enter into any such subscription, option, warrant, equity security, call, right
or Contract.

                                      -27-

<PAGE>

Except as provided in the Company Agreements, there are no registration rights,
and there is no voting trust, proxy, rights agreement, "poison pill"
anti-takeover plan or other Contract to which any Target Company is a party or
by which it is bound with respect to any equity security of any class of the
Company or any equity security, partnership interest or other ownership interest
of any class of any other Target Company.

     2.4 AUTHORITY; NON-CONTRAVENTION.

          (a) The Company has all requisite corporate power and authority to
enter into this Agreement and the Escrow Agreement and to consummate the
transactions contemplated hereby and thereby. The execution and delivery by the
Company of this Agreement and the Escrow Agreement and the consummation by the
Company of the transactions contemplated hereby and thereby have been duly
authorized by all necessary corporate action on the part of the Company, subject
only to obtaining the Required Stockholder Vote for the adoption and approval of
this Agreement and the Merger, and the filing of the Articles of Merger pursuant
to the MGCL. The Required Stockholder Vote is sufficient for the Company's
stockholders to approve and adopt this Agreement and approve the Merger, and no
other approval of any holder of any securities of the Company is required in
connection with the consummation of the transactions contemplated hereby. This
Agreement has been duly executed and delivered by the Company and, assuming the
due authorization, execution and delivery of this Agreement by Parent, each
Merger Sub, the Company Stockholders and the Company Stockholder Representative,
constitutes the valid and binding obligation of the Company, enforceable against
the Company in accordance with its terms, except as enforceability may be
limited by bankruptcy and other similar laws affecting the rights of creditors
generally and general principles of equity. Assuming the due authorization,
execution and delivery of the Escrow Agreement by Parent, each Merger Sub, the
Escrow Agent and the Company Stockholder Representative, the Escrow Agreement,
when executed and delivered by the Company, will constitute the valid and
binding obligation of the Company, enforceable against the Company in accordance
with its terms, except as enforceability may be limited by bankruptcy and other
similar laws affecting the rights of creditors generally and general principles
of equity.

          (b) The execution and delivery by the Company of this Agreement and
the Escrow Agreement do not, and the performance by the Company of this
Agreement and the Escrow Agreement will not, (i) conflict with or violate the
Company Charter Documents, (ii) subject to compliance with the requirements set
forth in Section 2.4(c), conflict with or violate any Legal Requirement
applicable to any Target Company or by which any Target Company or any of its
material properties or assets is bound or affected, or (iii) result in any
material breach of or constitute a material default (or an event that with
notice or lapse of time or both would become a material default) under, or
materially impair a Target Company's rights or alter the rights or obligations
of any third party under, or give to others any rights of termination,
amendment, acceleration or cancellation of, or result in the creation of an
Encumbrance on any of the properties or assets of any Target Company pursuant
to, any material Contract to which any Target Company is a party or by which any
Target Company or its properties or assets are bound or affected. No consent,
waiver or approval of any Person, nor any notice to any Person, is required to
be obtained or made under any Contract to which any Target Company is a party or
by which any Target Company or any of its properties or assets is bound or
affected in connection with the execution and delivery by the Company of this
Agreement or the

                                      -28-

<PAGE>

performance of this Agreement by the Company, except for such consents, waivers,
approvals and notices as have duly been obtained (under the Company Agreements
or otherwise), or the lack of which, individually or in the aggregate, would not
be material to the Company.

          (c) No consent, approval, order or authorization of, or registration,
declaration or filing with any Governmental Entity or other Person, is required
to be obtained or made by the Company in connection with the execution and
delivery of this Agreement or the consummation of the transactions contemplated
hereby, except for the filing of the Articles of Merger with the Secretary of
State of the State of Maryland and appropriate documents with the relevant
authorities of other states in which the Company is qualified or licensed to do
business.

     2.5 FINANCIAL STATEMENTS.

          (a) Part 2.5 of the Company Disclosure Schedule includes complete and
correct copies of (i) the unaudited consolidated balance sheets and statements
of income, stockholders' equity and cash flows of the Company as of July 31,
2006 and for the seven months ended July 31, 2006 and (ii) the audited
consolidated balance sheets and statements of income, stockholders' equity and
cash flows of the Company as of December 31, 2003, 2004 and 2005 and for the
fiscal years ended December 31, 2003, 2004 and 2005. Collectively, the financial
statements referred to in the immediately preceding sentence are sometimes
referred to herein as the "COMPANY FINANCIAL STATEMENTS," and the unaudited
consolidated balance sheet of the Company as of July 31, 2006 is sometimes
referred to herein as the "COMPANY BALANCE SHEET." Each of the Company Financial
Statements (1) was prepared in accordance with GAAP, applied on a consistent
basis throughout the periods involved, and (2) fairly presented the consolidated
financial position of the Target Companies as at the respective dates thereof
and the consolidated results of the Target Companies' operations and cash flows
for the periods indicated, except that the unaudited Company Financial
Statements referred to in clause (i) above may not contain all the footnotes
required by GAAP, and were or are subject to normal and recurring year-end
adjustments that the Company does not reasonably expect to be material,
individually or in the aggregate.

          (b) The Company has not been notified by any accountant that such
accountant is of the view that any of the Company Financial Statements should be
restated or that the Company should modify its accounting for any period.

     2.6 NO UNDISCLOSED LIABILITIES. No Target Company has any material
liabilities (absolute, accrued, contingent or otherwise), except for (a)
liabilities and obligations shown on the Company Balance Sheet, (b) liabilities
and obligations incurred since the date of the Company Balance Sheet in the
ordinary course of business consistent with past practice, and (c) liabilities
and obligations disclosed in this Agreement or the Company Disclosure Schedule.
No Target Company has or will have as of or following the Closing any obligation
or liability for earn-outs or other contingent payments payable to former owners
of assets, stock or other interests acquired by any Target Company or otherwise
arising out of previous transactions by any Target Company. Except as set forth
in Part 2.6 of the Company Disclosure Schedule, the Target Companies do not have
any material off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of
Regulation S-K of the SEC.

                                      -29-

<PAGE>

     2.7 ABSENCE OF CERTAIN CHANGES OR EVENTS.

          (a) Since the date of the Company Balance Sheet, there has not been:
(i) any Company Material Adverse Effect, (ii) any declaration, setting aside or
payment of any dividend on, or other distribution (whether in cash, stock or
property) in respect of, any of any Target Company's capital stock, or any
purchase, redemption or other acquisition by any Target Company of any Target
Company's capital stock or any other securities of any Target Company or any
grant or issuance of any options, warrants, calls or rights to acquire any such
shares or other securities, (iii) any split, combination or reclassification of
any Target Company's capital stock, (iv) any granting by any Target Company of
any increase in compensation or fringe benefits to any directors, officers,
employees or consultants of any Target Company, or any payment by any Target
Company of any bonus to any directors, officers, employees or consultants of any
Target Company, (v) any acquisition, sale or transfer of any material asset by
any Target Company other than software licenses granted by the Company to
customers in the ordinary course of business and consistent with past practice,
(vi) any change by any Target Company in its accounting methods, principles or
practices, except as required by concurrent changes in GAAP, (vii) any material
revaluation by any Target Company of any of its assets, including writing off
notes or accounts receivable, (viii) any granting by any Target Company of any
increase in severance or termination pay, (ix) any cancellation or termination
of any development, licensing, distribution, sales, services or other similar
Contract with respect to any Intellectual Property Rights (as defined in Section
2.10), except by the Company in the ordinary course of business consistent with
past practice, (x) any cancellation, compromise, waiver or release of any right
or claim (or series of rights or claims) involving more than $20,000, (xi) any
material damage, destruction or loss (whether or not covered by insurance) to
any property or assets material to the conduct of the business of any Target
Company; (xii) any creation of any Encumbrance on any of the property or assets
of any Target Company, (xiii) any capital expenditure in excess of $10,000,
(xiv) any creation of any indebtedness for borrowed money in excess of $10,000,
(xv) any entering into, amendment, modification, cancellation or termination of
any material Contract other than in the ordinary course of business consistent
with past practice or (xvi) entering into any Contract to do any of the
foregoing.

     2.8 TAXES.

          (a) Each Target Company has filed all Tax Returns that it was required
to file under applicable Legal Requirements and has complied with all Legal
Requirements in respect of all Taxes. All such Tax Returns were correct and
complete in all material respects and were prepared in substantial compliance
with all applicable Legal Requirements. All Taxes due and owing by any Target
Company (whether or not shown on any Tax Return) have been paid. No Target
Company is currently the beneficiary of any extension of time within which to
file any Tax Return. No claim has ever been made by a Governmental Entity in a
jurisdiction where a Target Company does not file Tax Returns that such Target
Company is or may be subject to taxation by that jurisdiction. There are no
liens for Taxes (other than Taxes not yet due and payable) upon any of the
assets of any Target Company.

          (b) Each Target Company has withheld and paid all Taxes required to
have been withheld and paid in connection with any amounts paid or owing to any
employee, independent contractor, creditor, stockholder, or other third party.

                                      -30-

<PAGE>

          (c) No foreign, federal, state, or local tax audits or administrative
or judicial Tax proceedings are pending or, to the Company's Knowledge, being
conducted with respect to any Target Company. No Target Company has received
from any foreign, federal, state, or local Governmental Entity (including
jurisdictions where such Target Company has not filed Tax Returns) any (i)
written notice indicating an intent to open an audit or other review, (ii)
request for information related to Tax matters, or (iii) notice of deficiency or
proposed adjustment for any amount of Tax proposed, asserted, or assessed by any
Taxing authority against any Target Company. Part 2.8(c) of the Company
Disclosure Schedule lists all foreign, federal, state and local income Tax
Returns filed with respect to any Target Company for taxable periods ended on or
after December 31, 1999, indicates those Tax Returns that have been audited, and
indicates those Tax Returns that currently are the subject of an audit. The
Company has delivered to Parent correct and complete copies of all such Tax
Returns and all examination reports, and statements of deficiencies assessed
against or agreed to by any Target Company since December 31, 1999.

          (d) No Target Company has waived any statute of limitations in respect
of Taxes or agreed to any extension of time with respect to a Tax assessment or
deficiency.

          (e) Part 2.8(e) of the Company Disclosure Schedule sets forth the
Company's good faith estimate of the aggregate amount that will be deemed to be
an "excess parachute payment" within the meaning of Code Section 280G (and any
corresponding provision of state, local or foreign Tax law) if all amounts
payable hereunder are actually paid. Unless the Company Stockholders approve
such payments in accordance with Code Section 280G, such amount will not be
fully deductible as a result of Code Section 162(m) (and any corresponding
provision of state, local or foreign Tax law).

          (f) No Target Company has been a United States real property holding
corporation within the meaning of Code Section 897(c)(2) during the applicable
period specified in Code Section 897(c)(1)(A)(ii). Each Target Company has
disclosed on its federal income Tax Returns all positions taken therein that
could give rise to a substantial understatement of federal income Tax within the
meaning of Code Section 6662. No Target Company is a party to or bound by any
Tax allocation or sharing Contract. No Target Company (A) has been a member of
an affiliated group filing a consolidated federal income Tax Return (other than
a group the common parent of which was the Company) or (B) has any liability for
the Taxes of any Person (other than any Target Company) under Reg. Section
1.1502-6 (or any similar provision of state, local or foreign law), as a
transferee or successor, by contract, or otherwise.

          (g) To the Company's knowledge, Part 2.8(g) of the Company Disclosure
Schedule sets forth the following information with respect to each Target
Company (or, in the case of clause (B) below, with respect to each of the
Company's Subsidiaries) as of the most recent practicable date (but not earlier
than December 31, 2005) (as well as on an estimated pro forma basis as of the
Closing giving effect to the consummation of the transactions contemplated
hereby): (A) the basis of the Target Company in its assets; (B) the basis of the
Company in the stock of each Subsidiary (or the amount of any excess loss
account); (C) the amount of any net operating loss, net capital loss, unused
investment or other credit, unused foreign tax, or excess charitable
contribution allocable to each Target Company; and (D) the amount of any
deferred gain or loss allocable to each Target Company arising out of any
intercompany transaction.

                                      -31-

<PAGE>

          (h) The unpaid Taxes of the Target Companies (A) did not, as of the
date of the Company Balance Sheet, exceed the reserve for Tax liability
(excluding any reserve for deferred Taxes established to reflect timing
differences between book and Tax income) set forth on the face of the Company
Balance Sheet (rather than in any notes thereto) and (B) do not exceed that
reserve as adjusted for the passage of time through the Closing Date in
accordance with the past custom and practice of the Target Companies in filing
their Tax Returns. Since the date of the Company Balance Sheet, no Target
Company has incurred any liability for Taxes arising from extraordinary gains or
losses, as that term is used in GAAP, outside the ordinary course of business
consistent with past custom and practice.

          (i) No Target Company will be required to include any item of income
in, or exclude any item of deduction from, taxable income for any taxable period
(or portion thereof) ending after the Closing Date as a result of any:

               (i) change in method of accounting for a taxable period ending on
     or prior to the Closing Date;

               (ii) "closing agreement" as described in Code Section 7121 (or
     any corresponding or similar provision of state, local or foreign income
     Tax law) executed on or prior to the Closing Date;

               (iii) intercompany transaction or excess loss account described
     in Treasury Regulations under Code Section 1502 (or any corresponding or
     similar provision of state, local or foreign income Tax law);

               (iv) installment sale or open transaction disposition made on or
     prior to the Closing Date; or

               (v) prepaid amount received on or prior to the Closing Date.

          (j) No Target Company has distributed stock of another Person, or has
had its stock distributed by another Person, in a transaction that was purported
or intended to be governed in whole or in part by Code Section 355 or Code
Section 361.

          (k) No Target Company has engaged in any transaction that constitutes
a listed reportable or substantially similar transaction as described under
Section 6011 of the Code and Treasury regulations promulgated thereunder.

     2.9 TITLE TO PROPERTIES.

          (a) No Target Company holds any interest in real property, other than
the leaseholds described in Part 2.9 of the Company Disclosure Schedule (such
property being the "LEASED REAL PROPERTY"). Part 2.9 of the Company Disclosure
Schedule lists all real property leases (including underleases, serviced office
Contracts and any licenses, consents and approvals required from the landlords
and any superior landlords with respect to any such lease) to which any Target
Company is a party and each amendment thereto. All such current leases are in
full force and effect, are valid and effective in accordance with their
respective terms, and there is not, under any of such leases, any existing
default or event of default (or event which with notice

                                      -32-

<PAGE>

or lapse of time, or both, would constitute a default) that would give rise to a
claim against any Target Company in excess of $10,000. Such leases permit the
current occupation and use of such real property by the Target Companies. The
Leased Real Property comprises all the real property occupied or otherwise used
by the Target Companies.

          (b) Each Target Company has good and marketable title to, or, in the
case of leased properties and assets, valid leasehold interests in, all of its
material tangible properties and assets, real, personal and mixed, used or held
for use in its business, free and clear of any Encumbrances except for liens for
Taxes not yet due and payable and such Encumbrances, if any, which are not,
individually or in the aggregate, material in character, amount or extent. The
Leased Real Property is free of any tenancy, sub-tenancy, license or other
Contract entitling a person other than the Target Companies to occupy the whole
or any part. There are no outstanding actions, disputes, claims or demands
between any Target Company and any third party affecting the Leased Real
Property or any neighboring property or any boundary walls and fences, or with
respect to any easement, right or means of access to the Leased Real Property.
To the Knowledge of the Company, there is no resolution, proposal, scheme or
order, whether or not formally adopted, that would materially interfere with the
use or occupation of, or access to, the Leased Real Property by the Target
Companies.

          (c) All of the tangible properties and assets of the Target Companies
are in adequate operating condition to conduct the operations of the Target
Companies in substantially the same manner as currently conducted.

          (d) Except as set forth in the leases set forth in Part 2.9 of the
Company Disclosure Schedule, no Target Company has any material liability,
actual or contingent, arising directly or indirectly out of any Contract,
underlease, tenancy, conveyance, transfer or any other deed or document relating
to real property or to any estate or interest in real property entered into by
any Target Company including any actual or contingent liability arising directly
or indirectly out of (i) any estate or interest held by any Target Company as
original lessee or underlessee; (ii) any guarantee given by any Target Company
in relation to a lease or underlease; or (iii) any other covenant made by any
Target Company in favor of any lessor or head lessor.

     2.10 INTELLECTUAL PROPERTY.

          (a) For purposes of this Agreement, "INTELLECTUAL PROPERTY RIGHTS"
shall mean all intellectual property rights anywhere in the world held or used
(whether or not owned) by any Target Company in the conduct of its business,
including: (i) all trademarks, service marks, trade names, Internet domain
names, trade dress, and the goodwill associated therewith, and all registrations
or applications for registration thereof (collectively, the "COMPANY MARKS");
(ii) all patents, patent applications and continuations, industrial design
registrations and applications therefor (collectively, the "COMPANY PATENTS");
(iii) all copyrights, database rights and moral rights in both published works
and unpublished works, including all such rights in software, user and training
manuals, marketing and promotional materials, websites, internal reports,
business plans and any other expressions, mask works, firmware and videos,
whether registered or unregistered, and all registrations or applications for
registration thereof (collectively, the "COMPANY COPYRIGHTS"); and (iv) trade
secret and confidential information, including such rights in inventions
(whether or not reduced to practice), know-how, customer

                                      -33-

<PAGE>

lists, technical information, proprietary information, technologies, processes,
formulae, software, data, plans, drawings and blue prints, whether tangible or
intangible and whether stored, compiled, or memorialized physically,
electronically, photographically or otherwise (collectively, the "COMPANY SECRET
INFORMATION"). For purposes of this Section 2.10, "SOFTWARE" shall mean any and
all: (w) computer programs and applications, including any and all software
implementations of algorithms, models and methodologies, whether in source code
or object code, (x) databases and compilations, including any and all data and
collections of data, whether machine readable or otherwise, (y) descriptions,
flow-charts, library functions, algorithms, architecture, structure, display
screens and development tools, and other information, work product or tools used
to design, plan, organize or develop any of the foregoing and (z) all
documentation, including user manuals and training materials, relating to any of
the foregoing. For purposes of this Section 2.10, "EXCLUSIVELY LICENSED" shall
mean licensed or entitled to use pursuant to a Contract that imposes any
restriction (whether by territory, field, market, period of time or other
criterion) on the licensor's right to use, or grant licenses to third parties
with respect to, any Intellectual Property Right in connection with the
Contract.

          (b) Part 2.10(b) of the Company Disclosure Schedule contains a true,
complete and correct list of all the software that any Target Company licenses
or has licensed or otherwise makes or has made available to customers, including
all modules, components, add-ons and other options, and separately identifies
(i) each item of third-party software that constitutes or has constituted an
element of any of the foregoing and (ii) each license or other Contract with
respect to each such item of third-party software. Part 2.10(b) of the Company
Disclosure Schedule contains a true, complete and correct list of all other
third-party software used by any Target Company (other than Commercially
Available Software) and indicates each license or other Contract with respect to
such third-party software (other than Commercially Available Software).

          (c) The Company or another Target Company: (i) owns all right, title
and interest in and to the Intellectual Property Rights, free and clear of all
Encumbrances (other than licenses to customers of any Target Company required to
be disclosed (or specifically exempted from disclosure) pursuant to Section
2.16(e) and distribution and reseller Contracts required to be disclosed (or
specifically exempted from disclosure) pursuant to Section 2.16(f)), or (ii) is
licensed to use, or otherwise possesses legally valid and enforceable rights to
use, the Intellectual Property Rights that it does not so own; provided that, in
the case of Intellectual Property Rights consisting of patents and patent
applications, such representation is made to the Company's Knowledge. With
respect to (i) each registered Company Mark, (ii) each material unregistered
Company Mark, (iii) each Company Patent and (iv) each registered Company
Copyright, Part 2.10(c) of the Company Disclosure Schedule sets forth (A) a
complete and correct list of each of the foregoing which is owned by the Company
or another Target Company (which list identifies the owner thereof), (B) a
complete and correct list of each of the foregoing which is exclusively licensed
to the Company or another Target Company (which list identifies the applicable
license or other Contract and the licensee or entitlement holder), and (C) a
complete and correct list of each of the foregoing which is material to any
product, service or operation of the Company and which the Company or another
Target Company is licensed or otherwise entitled to use (which list identifies
the applicable license or other Contract and the licensee or entitlement
holder). The Target Companies have made all necessary filings, recordations and
payments to maintain their interests in the Intellectual Property Rights owned
or licensed (but only to the extent that

                                      -34-

<PAGE>

such filing, recordation or payment obligations are imposed by the license or
other Contract therefor) by any Target Company, except where the omission to
make such a filing or recordation (but not payment) can be cured without undue
effort or expense, except to the extent that the Company has made a business
judgment prior to the date of this Agreement not to continue to register or
maintain (or prosecute applications for) patents, registered copyrights,
registered trademarks or registered service marks which are not currently used
by any Target Company. None of the products, services or technology developed,
used, sold, offered for sale or licensed or proposed for development, use, sale,
offer for sale or license by any Target Company infringes, violates, passes off
on or otherwise misuses or has infringed, violated, passed off on or otherwise
misused any intellectual property rights of any Person; provided, in the case of
intellectual property rights of any third person consisting of patents and
patent applications, such representation is made to the Company's Knowledge.
Except as set forth in Part 2.10(c) of the Company Disclosure Schedule, the
Company has received no written notice of any claim that any of the products,
services or technology developed, used, sold, offered for sale or licensed or
proposed for development, use, sale, offer for sale or license by any Target
Company infringes, violates, passes off on or otherwise misuses or has
infringed, violated, passed off on or otherwise misused any intellectual
property rights of any third party. Except as set forth in Parts 2.10(c) or
2.10(n) of the Company Disclosure Schedule, no Target Company requires or has
required any additional intellectual property rights of any third party in order
to develop, use, sell, offer for sale or license its products or services or in
relation to the processes employed by the Target Companies in connection with
the operation of their respective businesses, other than commercially available
intellectual property rights that are not material in amount or expense.

          (d) All the issued Company Patents owned by or exclusively licensed to
any Target Company are subsisting and, to the Company's Knowledge, are valid. To
the Company's Knowledge, (i) all the material issued Company Patents not owned
by or exclusively licensed to any Target Company are valid and subsisting, (ii)
if and when the Company Patents owned by any Target Company that have not been
issued are so issued, such Company Patents will be valid and subsisting, (iii)
none of the issued Company Patents owned by or exclusively licensed to any
Target Company is being or has been infringed, (iv) none of the material issued
Company Patents not owned by or exclusively licensed to any Target Company is
being or has been infringed, (v) none of the Company Patents owned by or
exclusively licensed to any Target Company that have not been issued would have
been infringed had they been issued, and (vi) neither the validity nor the
enforceability of any of the foregoing has been challenged by any Person.

          (e) All the Company Marks owned by or exclusively licensed to any
Target Company are subsisting and, to the Company's Knowledge, are valid. To the
Company's Knowledge, (i) all of the material Company Marks not owned by or
exclusively licensed to any Target Company are valid and subsisting, (ii) none
of the Company Marks owned by or exclusively licensed to any Target Company is
being or has been infringed, violated, passed off on or otherwise misused or
diluted, (iii) none of the material Company Marks not owned by or exclusively
licensed to any Target Company is being or has been infringed, violated, passed
off on or otherwise misused or diluted, (iv) none of the Company Marks is being
or has been opposed or challenged, and (v) no proceeding has been commenced or
threatened or is

                                      -35-

<PAGE>

reasonably anticipated that would seek to prevent the use by any Target Company
of any such Company Mark.

          (f) To the Company's Knowledge, all the Company Copyrights, whether or
not registered, owned by or exclusively licensed to any Target Company are valid
and, once registered, enforceable. To the Company's Knowledge, (i) all the
material Company Copyrights, whether or not registered, not owned by or
exclusively licensed to any Target Company, are valid and, once registered,
enforceable, (ii) none of the Company Copyrights owned by or exclusively
licensed to any Target Company is being or has been infringed, and the validity
of such Company Copyrights is not being and has not been challenged or
threatened in any way, (iii) none of the material Company Copyrights not owned
by or exclusively licensed to any Target Company is being or has been infringed,
and the validity of such Company Copyrights is not being and has not been
challenged or threatened in any way, and (iv) no proceeding has been commenced
or threatened or is reasonably anticipated that would seek to prevent the use by
any Target Company of any such Company Copyright. No Person has any moral rights
in any of the Intellectual Property Rights owned by any Target Company.

          (g) The Target Companies have taken commercially reasonable measures
to protect the secrecy, confidentiality and value of the Company Secret
Information, consistent with prevailing practices in the software industry
sector in which the Target Companies operate. To the Company's Knowledge, no
Company Secret Information has been used, divulged or appropriated for the
benefit of any Person (other than any Target Company) or otherwise
misappropriated.

          (h) No Intellectual Property Right is subject to any outstanding
order, proceeding (other than pending proceedings pertaining to uncontested
applications for patent, trademark or copyright registration) or stipulation
that restricts in any manner the licensing thereof by any Target Company;
provided that, in the case of Intellectual Property Rights licensed to the
Company, such representation is made to the Company's Knowledge.

          (i) To the Company's Knowledge, none of the present or former
employees or consultants engaged in the development of Intellectual Property
Rights (including software) or in performing sales and marketing functions on
behalf of any Target Company is or was obligated under any Contract with any
third party which conflicts or did conflict with such employee's or consultant's
rights to develop Intellectual Property Rights (including software) or engage in
such sales and marketing functions on behalf of any Target Company.

          (j) Except as set forth in Part 2.10(j) of the Company Disclosure
Schedule, all present and former contractors, agents and consultants of each
Target Company who are or were involved in the creation of any of the
Intellectual Property Rights on behalf of a Target Company, and all present and
former employees of each Target Company, have executed an assignment of
inventions agreement to vest in the Company or its Subsidiary, as appropriate,
exclusive ownership of the Intellectual Property Rights so created by them, and
such assignment includes a complete, perpetual and irrevocable waiver of moral
rights by all authors of any applicable Company Copyrights, to the extent
allowed by applicable law. All present and former contractors, agents and
consultants of each Target Company who have or have had access to Company Secret
Information, and all present and former employees of any Target Company,

                                      -36-

<PAGE>

have executed nondisclosure agreements to protect the confidentiality of Company
Secret Information.

          (k) Without limiting the generality of the foregoing, all the software
that any Target Company licenses or licensed or otherwise makes or made
available to customers was: (i) developed by employees of a Target Company
within the scope of their employment and subject to their obligation to assign
inventions and patents therein; or (ii) developed by independent contractors or
consultants who assigned all of their right, title and interest in and to that
software to the Company; or (iii) otherwise acquired or licensed by the Company
from a third party by a Contract that is disclosed in Part 2.10(c) of the
Company Disclosure Schedule or under an Open Source license listed in Part
2.10(n) of the Company Disclosure Schedule, and in each case under clauses (i)
and (ii) complete, perpetual and irrevocable waivers of moral rights were
obtained from all authors of such software, to the extent allowed by applicable
law.

          (l) No funding or grant provided to any Target Company by any third
party has affected or will affect, in any manner, the Intellectual Property
Rights, and no such third party has any right, title or interest in the
Intellectual Property Rights.

          (m) All material Contracts relating to the Intellectual Property
Rights to which a Target Company is a party are in full force and effect, except
such as have expired naturally at the end of their terms and are not material to
the Company. The consummation of the transactions contemplated by this Agreement
will neither violate nor result in the breach, modification, cancellation,
termination, or suspension of any such Contract. Each Target Company is in
material compliance with, and has not materially breached any term of any of
such Contracts, and, to the Company's Knowledge, all other parties to such
Contracts are in compliance in all material respects with, and have not
materially breached any term of, such Contracts. Following the Closing Date, the
Surviving Corporation and its Subsidiaries will be permitted to exercise all of
the rights of the Target Companies under such Contracts to the same extent the
Target Companies would have been able to had the transactions contemplated by
this Agreement not occurred and without the payment of any additional amounts or
consideration other than ongoing fees, royalties or payments which the Target
Companies would otherwise have been required to pay.

          (n) Part 2.10(n) of the Company Disclosure Schedule lists all Open
Source Materials (as defined below) used by any Target Company in any way, and
describes the manner in which such Open Source Materials have been or are
currently used. Such description includes whether (and, if so, how) the Open
Source Materials were embedded, linked (including dynamic linking), modified
and/or distributed by any Target Company and whether and the extent to which
each of the Open Source Materials was used to develop, distribute or design any
Target Company products to link with (including dynamic linking at runtime) or
access in any way (whether by calls, execution branching, interprocess control
or other technique of any kind whatsoever) any Open Source Materials. Except as
set forth in Part 2.10(n) of the Company Disclosure Schedule, the Target
Companies have not (i) incorporated Open Source Materials into, or combined Open
Source Materials with, any Intellectual Property Rights or any Target Company
products, (ii) distributed Open Source Materials in conjunction with any
Intellectual Property Rights or any Target Company products or (iii) used Open
Source Materials that create, or purport to create, obligations for any Target
Company with respect to Intellectual Property

                                      -37-

<PAGE>

Rights or any Target Company products or grant, or purport to grant, to any
third party, any rights or immunities under Intellectual Property Rights
(including using any Open Source Materials that require, as a condition of use,
modification and/or distribution of such Open Source Materials that other
software incorporated into, derived from or distributed with such Open Source
Materials be (A) made available or distributed in source code form; (B) licensed
for the purpose of making derivative works; (C) licensed under terms that allow
reverse engineering, reverse assembly or disassembly of any kind; or (D)
redistributable at no charge). No Intellectual Property Right or Company product
is subject to the terms of license of any such Open Source Materials. Except as
set forth in Part 2.10(n) of the Company Disclosure Schedule, no Target Company
has used Program Code (as defined below) that includes the Linux kernel version
2.4 or any later version. "OPEN SOURCE MATERIALS" means any software, library,
utility, tool or other computer or program code (collectively, "PROGRAM CODE")
that is licensed or distributed as "free software", "freeware", "open source
software" or under any terms or conditions that impose any requirement that any
software using, linked with, incorporating, distributed with, based on, derived
from or accessing Program Code: (i) be made available or distributed in source
code form; (ii) be licensed for the purpose of making derivative works; (iii) be
licensed under terms that allow reverse engineering, reverse assembly or
disassembly of any kind; or (iv) be redistributable at no charge. Open Source
Materials shall include any Program Code licensed or distributed under any of
the following licenses or distribution models or similar licenses or
distribution models: the GNU General Public License (GPL), GNU Lesser General
Public License or GNU Library General Public License (LGPL), Mozilla Public
License (MPL), BSD licenses, the Artistic License, the Netscape Public License,
the Sun Community Source License, (SCSL), the Sun Industry Standards License
(SISL) and the Apache License.

          (o) Part 2.10(o) of the Company Disclosure Schedule lists each item of
Commercially Available Software used by the Company for which the aggregate fees
have exceeded, or are reasonably expected to exceed, $2,500 per year or $10,000
for a perpetual license (regardless of the number of sites, users, seats,
installed CPUs or other measurement criteria).

     2.11 COMPLIANCE WITH LAWS.

          (a) Since January 1, 2000, no Target Company has been in conflict
with, or in default or violation of (i) any material Legal Requirement
applicable to such Target Company or by which such Target Company or any of its
properties or assets was or is bound or affected, or (ii) any material Contract
to which such Target Company was or is a party or by which such Target Company
or any of its properties or assets was or is bound or affected. No investigation
or review by any Governmental Entity is pending or, to the Company's Knowledge,
has been threatened or is reasonably anticipated against any Target Company,
nor, to the Company's Knowledge, has any Governmental Entity indicated an
intention to conduct an investigation of any Target Company. There is no
Contract, judgment, injunction, order or decree binding upon any Target Company
which has or could reasonably be expected to have the effect of prohibiting or
materially impairing any business practice of any Target Company, any
acquisition of material property by any Target Company or the conduct of
business by any Target Company as currently conducted.

                                      -38-

<PAGE>

          (b) The Target Companies hold all permits, licenses, variances,
exemptions, orders and approvals from Governmental Entities that are material to
or required for the operation of the business of the Target Companies as
currently conducted (collectively, the "COMPANY PERMITS"). The Target Companies
are in compliance, in all material respects, with the terms of the Company
Permits.

     2.12 LITIGATION. Except as disclosed in Part 2.12 of the Company Disclosure
Schedule, there are no claims, suits, actions or proceedings pending or, to the
Company's Knowledge, threatened against, relating to or affecting any Target
Company, before any Governmental Entity or any arbitrator. No Governmental
Entity has at any time challenged or questioned in a writing delivered to any
Target Company the legal right of any Target Company to design, offer or sell
any of its products or services in the present manner or style thereof or
otherwise to conduct its business as currently conducted or that otherwise has
had or is reasonably likely to have a Company Material Adverse Effect. To the
Company's Knowledge, no event has occurred, and no claim, dispute or other
condition or circumstance exists, that will, or that would reasonably be
expected to, cause or provide a bona fide basis for a director or executive
officer of any Target Company to seek indemnification from any Target Company.

     2.13 EMPLOYEE BENEFIT PLANS.

          (a) Part 2.13(a) of the Company Disclosure Schedule contains an
accurate and complete list of each Company Employee Plan and each Employee
Agreement, including a list of each document comprising or embodying any
material part thereof or relating thereto, and each staff handbook or written
employment policies for each Target Company. Except as disclosed in Part 2.13(a)
of the Company Disclosure Schedule, no Target Company is paying compensation or
other payment to any former Employee (or relative or dependent) or former
consultant.

          (b) The Company has made available to Parent accurate and complete
copies of the plan documents and summary plan descriptions, the most recent
determination letter received from the IRS, the most recent annual report (Form
5500, with all applicable attachments), and all related trust, insurance and
other funding Contracts that implement each Company Employee Plan (to the extent
applicable), and all documents embodying each Employee Agreement.

          (c) Each of the Company and its ERISA Affiliates has performed in all
material respects all obligations required to be performed by it under, is not
in default or violation of, and the Company has no Knowledge of any default or
violation by any other party to, each Company Employee Plan or Employee
Agreement, and each Company Employee Plan has been maintained, funded and
administered in all material respects in accordance with its terms and in
compliance in form and in operation with all applicable Legal Requirements
(including ERISA and the Code), including the maintenance of reasonably accurate
records. Each Company Employee Plan that is intended to meet the requirements of
a "qualified plan" under Section 401(a) of the Code has received a written
determination, advisory or opinion letter from the IRS that such Company
Employee Plan is so qualified, and nothing has occurred since the date of such
determination or letter that could reasonably be expected to adversely affect
the qualified status of such plan; (iii) no "prohibited transaction," within the
meaning of Section

                                      -39-

<PAGE>

4975 of the Code or Sections 406 and 407 of ERISA, and not otherwise exempt
under Section 408 of ERISA, has occurred with respect to any Company Employee
Plan. There are no actions, suits, claims, proceedings or investigations
pending, or, to the Company's Knowledge, threatened or reasonably anticipated
(other than routine claims for benefits) against any Company Employee Plan and,
to the Knowledge of the Company, there are no facts or circumstances which may
give rise to any such action, suit, claim, proceeding or investigation. Each
Company Employee Plan can be amended, terminated or otherwise discontinued
either before or after the Effective Time in accordance with its terms, without
liability to Parent, the Surviving Corporation, the Company or any of their
ERISA Affiliates (other than ordinary administration expenses typically incurred
in a termination event and payment of benefits pursuant to such Company Employee
Plan). Except as set forth in Part 2.13(c) of the Company Disclosure Schedule,
all contributions due from the Company or any ERISA Affiliate with respect to
any of the Company Employee Plans have been made as required under ERISA or have
been accrued on the Company Balance Sheet and no further contributions will be
due or will have accrued thereunder as of the Closing Date.

          (d) Neither any Target Company nor any ERISA Affiliate contributes to,
has any obligation to contribute to, or has any liability under or with respect
to any Pension Plan which is subject to Title IV of ERISA or Section 412 of the
Code.

          (e) Neither any Target Company nor any ERISA Affiliate contributes to,
has any obligation to contribute to, or has any liability (including withdrawal
liability as defined in ERISA Section 4201) under or with respect to any
Multiemployer Plan.

          (f) No Company Employee Plan or Employee Agreement provides, or has
any liability to provide, retiree life insurance, retiree health or other
retiree employee welfare benefits to any Person for any reason, except as may be
required by COBRA, Part 6 of Title I of ERISA or other applicable statute.

          (g) Neither the Company nor any ERISA Affiliate has in any material
respect violated any of the health care continuation requirements of COBRA, the
requirements of FMLA or any similar provisions of law applicable to any
Employees.

          (h) The execution of this Agreement and the consummation of the
transactions contemplated hereby will not (either alone or upon the occurrence
of any additional or subsequent events) constitute an event under any Company
Employee Plan, Employee Agreement, trust or loan that will or may result in any
payment (whether of severance pay or otherwise), acceleration, forgiveness of
indebtedness, loss of rights, vesting, distribution, increase in benefits or
obligation to fund benefits with respect to any Employee.

          (i) Each Company Employee Plan required to be listed in Part 2.13(a)
of the Company Disclosure Schedule that is a "nonqualified deferred compensation
plan" (as defined in Section 409A(d)(1) of the Code) and was in existence prior
to October 3, 2004, has not been "materially modified" (within the meaning of
Section 885(d)(2)(B) of the American Jobs Creation Act of 2004 and any
applicable guidance issued thereunder) since October 3, 2004, in a manner which
would cause amounts deferred in taxable years beginning before January 1, 2005,
under such plan to be subject to Section 409A of the Code. Each Company Employee
Plan

                                      -40-

<PAGE>

required to be listed in Part 2.13(a) of the Company Disclosure Schedule that is
a "nonqualified deferred compensation plan" (as defined in Section 409A(d)(1) of
the Internal Revenue Code) and which has not been terminated has been operated
since January 1, 2005 in good faith compliance with the provisions of Section
409A of the Code, Notice 2005-1 and the proposed regulations issued under
Section 409A.

     2.14 EMPLOYMENT MATTERS.

          (a) Each Target Company: (i) is in compliance in all material respects
with all applicable Legal Requirements respecting employment, employment
practices, immigration, terms and conditions of employment and wages and hours;
(ii) has withheld all amounts required by any Legal Requirement or by Contract
to be withheld from the wages, salaries and other payments to Employees; (iii)
has properly classified independent contractors for purposes of all applicable
Legal Requirements; (iv) is not liable for any arrears of wages or any Taxes
(other than wages (and Taxes thereon) which have accrued in the ordinary course
of business but which are not yet payable) or any penalty for failure to comply
with any of the foregoing; and (v) is not liable for any payment to any trust or
other fund or to any Governmental Entity, with respect to unemployment
compensation benefits, social security, withholdings or remittances applicable
to employee wages, or other benefits or obligations for Employees (other than
routine payments to be made in the normal course of business and consistent with
past practice). There are no pending, or, to the Company's Knowledge, threatened
actions, suits, claims or proceedings against any Target Company under any
workers' compensation policy or long-term disability policy. To the Company's
Knowledge, no Employee or consultant of any Target Company has violated any
employment, consulting, non-disclosure, non-competition, non-solicitation or
other Contract by which such Employee is bound (nor any Legal Requirement
relating to unfair competition, trade secrets or proprietary information) as a
result of providing services to any Target Company or disclosing or using any
information in connection with such services. There are no controversies pending
or, to the Company's Knowledge, threatened between any Target Company and any
Employee that would be reasonably likely to be material to any Target Company.
Except as set forth on Part 2.14(a) of the Company Disclosure Schedule, no
Target Company has any Employee Agreement currently in effect that is not
terminable at will by a Target Company without any payment pursuant thereto or
in connection therewith (other than agreements for the sole purpose of providing
for the confidentiality of proprietary information or assignment of inventions).
No Target Company will have any liability to any Employee or to any other Person
as a result of the termination of any employee leasing Contract.

          (b) No work stoppage, labor strike, slowdown, lockout or other labor
dispute against any Target Company is pending or, to the Company's Knowledge,
threatened. No Employee of any Target Company is represented by any union or
other labor organization. The Company has no Knowledge of any activities or
proceedings of any labor union to organize any Employees. There are no actions,
suits, claims, labor disputes or grievances pending, or, to the Company's
Knowledge, threatened relating to any labor, safety or discrimination matters
involving any Employee, including charges of unfair labor practices or
discrimination complaints. No Target Company has engaged in any unfair labor
practices within the meaning of the National Labor Relations Act. No Target
Company is or has been a party to, or bound by, any collective bargaining or
union Contract with respect to Employees, and no collective bargaining or union
Contract is being negotiated by any Target Company.

                                      -41-

<PAGE>

          (c) No Target Company has taken any action that could constitute a
mass layoff, group termination, mass termination, or plant closing which may
trigger notice requirements or liability under any Legal Requirement, including
collective dismissal laws.

     2.15 ENVIRONMENTAL MATTERS.

          (a) Each Target Company is in compliance in all material respects with
all applicable Environmental Laws. No Target Company has received any written
communication that alleges that any Target Company is not in compliance with
applicable Environmental Laws. To the Knowledge of the Company, there are no
circumstances that may prevent or interfere with compliance by any Target
Company with all applicable Environmental Laws. All Company Permits and other
governmental authorizations currently held by any Target Company pursuant to any
Environmental Law are in full force and effect, the Target Companies are in
compliance in all material respects with all of the terms of such Company
Permits and authorizations, and no other Company Permits or authorizations are
required by any Target Company for the conduct of their respective businesses.
The management, handling, storage, transportation, treatment and disposal by the
Target Companies of all Environmental Materials have been in compliance in all
material respects with all applicable Environmental Laws.

          (b) There is no Environmental Claim pending or, to the Company's
Knowledge, threatened or reasonably anticipated against or involving any Target
Company or, to the Company's Knowledge, against any Person whose liability for
any Environmental Claim any Target Company has or may have retained or assumed
either contractually or by operation of law, nor, to the Company's Knowledge, is
there any circumstance that might form the basis for any Environmental Claim.

     2.16 CERTAIN CONTRACTS. Except as otherwise set forth in the applicable
lettered subsection of Part 2.16 of the Company Disclosure Schedule, no Target
Company is a party to or is bound by any:

          (a) Contract any of the benefits of which will be increased, or the
vesting of benefits of which will be accelerated, by the occurrence of any of
the transactions contemplated by this Agreement or the value of any of the
benefits of which will be calculated on the basis of any of the transactions
contemplated by this Agreement;

          (b) Contract of indemnification (other than licenses to customers of
any Target Company required to be disclosed (or specifically exempted from
disclosure) pursuant to Section 2.16(e)), any guaranty by a Target Company or
any instrument evidencing indebtedness by way of direct loan, sale of debt
securities, purchase money obligation, conditional sale, or otherwise;

          (c) Contract containing covenants purporting to limit or which
effectively limit any Target Company's freedom to compete in any line of
business or in any geographic area or which would so limit Parent, the Company
or the Surviving Corporation or any of their respective Subsidiaries after the
Effective Time or granting any exclusive distribution or other exclusive rights;

                                      -42-

<PAGE>

          (d) Contract relating to the disposition or acquisition by any Target
Company of assets not in the ordinary course of business, including by means of
any merger, consolidation or the like;

          (e) Contract with any customer with continuing obligations, including,
without limitation, any requirements to provide professional services or to do
customization or provide platform transfer rights, involving more than $20,000
in any twelve-month period in any individual case;

          (f) development, licensing, distribution, resale or other Contract
with regard to the development, acquisition, licensing, distribution or resale
of any Intellectual Property Rights, other than (i) licenses to customers of any
Target Company required to be disclosed (or specifically exempted from
disclosure) pursuant to Section 2.16(e), (ii) Contracts required to be disclosed
pursuant to Section 2.10, and (iii) Contracts under which a Target Company
licenses Commercially Available Software from a third party;

          (g) Contract to forgive any indebtedness in excess of $10,000 of any
Person to any Target Company;

          (h) loan Contract, promissory note or other evidence of indebtedness
for borrowed money;

          (i) Contract (other than Contracts disclosed pursuant to Section 2.10)
pursuant to which any Target Company (A) uses any intellectual property of any
third party that is material to the operation of its business (other than
Commercially Available Software), (B) incorporates any third-party intellectual
property in any of its products; or (C) has granted to any third party an
exclusive license of any Intellectual Property Rights owned by any Target
Company or any license of source code (including customary source code escrow
Contracts entered into in the ordinary course of business);

          (j) Contract (other than Contracts disclosed pursuant to Section 2.10)
which may obligate any Target Company to make aggregate payments in excess of
$25,000 to any third party during the period from the date of this Agreement to
December 31, 2008;

          (k) Contract (other than Contracts disclosed pursuant to Section 2.10)
pursuant to which any Target Company (A) reasonably expects to receive aggregate
payments in excess of $50,000 during the period from the date of this Agreement
to December 31, 2007 or (B) reasonably expects to recognize revenue in such
aggregate amount during such period;

          (l) Contract currently in force providing for capital expenditures by
any Target Company in excess of $10,000;

          (m) power of attorney or agency Contract;

          (n) other Contract that cannot be terminated by the Target Company
party thereto within 30 days without any liability or obligation in excess of
$20,000;

                                      -43-

<PAGE>

          (o) other Contract entered into outside the ordinary course of
business or at other than arm's length; or

          (p) other Contract currently in effect that is material to any Target
Company's business as presently conducted or proposed to be conducted.

     Each Contract that is required to be disclosed in the Company Disclosure
Schedule pursuant to this Section 2.16 or otherwise shall be referred to herein
as a "COMPANY CONTRACT." Each Company Contract is valid and in full force and
effect in accordance with its terms. No Target Company, nor to the Company's
Knowledge, any other party thereto, is in breach, violation or default under,
and no Target Company has received written notice alleging that it has breached,
violated or defaulted under, any of the terms or conditions of any Company
Contract in such a manner as would permit any other party thereto to cancel or
terminate any such Company Contract, or would permit any other party to seek
material damages or other remedies for any or all such alleged breaches,
violations, or defaults.

     2.17 RELATED-PARTY MATTERS. No stockholder, director, officer or employee
of any Target Company (nor, to the Knowledge of the Company, any Person
affiliated or associated with any of the foregoing or in which any of the
foregoing has any interest, nor any Family Member of any of the foregoing) (i)
has any interest, direct or indirect, in (A) any customer, supplier or
competitor of any Target Company, (B) any other Person with whom any Target
Company has a material business relationship (other than any interest arising
solely from the ownership of less than 1% of the publicly traded securities of
any Person), or (C) any Intellectual Property Rights or any other assets or
property, real or personal, tangible or intangible, used in or pertaining to the
business of the Target Companies (other than any interest arising solely through
the ownership of any Company Stock) or (ii) is or was a party to or has or had
any interest, direct or indirect, in any Contract or other transaction with any
Target Company (other than (W) compensation paid to any employee who is not a
director or officer of any Target Company, (X) benefits available generally on
the same terms to all employees of the Target Companies, (Y) grants of options
disclosed in Part 2.2(b) of the Company Disclosure Schedule, and (Z)
reimbursement for reasonable expenses incurred on behalf of any Target Company).

     2.18 BROKERS' AND FINDERS' FEES. Other than as set forth in Part 2.18 of
the Company Disclosure Schedule, there are no Transaction Expenses and no Target
Company has incurred, nor will any of them incur, directly or indirectly, any
liability for brokerage or finders' fees or agents' commissions or any similar
charges in connection with this Agreement or any transaction contemplated
hereby.

     2.19 INSURANCE. Part 2.19 of the Company Disclosure Schedule sets forth a
description of each insurance policy or bond which provides coverage for any
Target Company. Each Target Company has provided notice to its insurers in
accordance with the applicable insurance policies or bonds of all potential
claims of which such Target Company has Knowledge, and there is no material
claim pending under any of such policies or bonds as to which coverage has been
questioned, denied or disputed by the underwriters of such policies or bonds.
All premiums due and payable under all such policies have been paid, and each
Target Company is otherwise in compliance in all material respects with the
terms of such policies and bonds. To the Knowledge of the Company, there has
been no threatened or reasonably

                                      -44-

<PAGE>

anticipated termination of, or material premium increase with respect to, any of
such policies. No Target Company has incurred any material uninsured loss or
casualty, nor does the Company have Knowledge of any circumstance or occurrence
that could result in a material uninsured loss or casualty for any Target
Company. No Target Company has made any knowing or intentional misrepresentation
of, or knowingly or intentionally omitted to disclose, any material fact to any
of its insurers that might justify denial by such insurer of any coverage under
any such policy or bond.

     2.20 CUSTOMERS; ACCOUNTS RECEIVABLE.

          (a) Part 2.20 of the Company Disclosure Schedule lists each customer
of each Target Company from which the Company derived revenue since January 1,
2003. No current customer has indicated to any Target Company that it will or
may stop buying, discontinue services, or materially decrease the rate of buying
services or products of any Target Company in comparison with that contained in
its current agreement with the Company.

          (b) The receivables shown on the Company Balance Sheet arose in the
ordinary course of business, consistent with past practice, and have been
collected or are collectible in the book amounts thereof, less the allowance for
doubtful accounts provided for on the Company Balance Sheet. The Company's
allowances for doubtful accounts and warranty returns are reasonable and have
been prepared in accordance with GAAP consistently applied and in accordance
with the Company's past practices. The Target Companies' receivables arising
after the date of the Company Balance Sheet and prior to the Closing Date arose
in the ordinary course of business. To the Company's Knowledge, none of the
Target Companies' receivables is subject to any material claim of setoff,
recoupment or counterclaim, and it has no Knowledge of any specific facts or
circumstances (whether asserted or unasserted) that could give rise to any such
claim. No receivables are contingent upon the performance by any Target Company
of any obligation or other Contract other than normal warranty repair and
replacement. No Person has any Encumbrance on any of such receivables, and no
Contract for deduction or discount has been made with respect to any of such
receivables.

     2.21 BOARD APPROVAL. The Board of Directors of the Company has unanimously
approved this Agreement and declared the advisability of this Agreement and the
Merger and recommended that the stockholders of the Company approve and adopt
this Agreement and approve the Merger. Relying in part upon the representation
of Parent in Section 4.9, Section 3-602 of the MGCL applicable to a "business
combination" (as defined therein) will not apply to the execution, delivery or
performance of this Agreement or the consummation of the Merger or the other
transactions contemplated by this Agreement.

     2.22 MINUTES AND STOCK RECORDS. The minute books of each Target Company
contain records that are accurate in all material respects of all meetings and
consents in lieu of meetings of its Board of Directors (or equivalent) and any
committees thereof (whether permanent or temporary), and of its stockholders (or
equivalent) since inception, and such records accurately reflect all
transactions referred to in such minutes and consents. The stock books (or
equivalent) of each Target Company accurately reflect the ownership of the
capital stock (or equivalent) of such Target Company. The Company has made
available to Parent true,

                                      -45-

<PAGE>

correct and complete copies of the minutes, consents and stock books (and
equivalents) of each Target Company.

     2.23 ACCOUNTING SYSTEM. The books of account of the Company are adequate to
enable the Company to prepare its Financial Statements in accordance with GAAP.
The books and records of the Company accurately reflect, in all material
respects, its income, expenses, assets and liabilities and the Company maintains
internal accounting controls which provide reasonable assurance that
transactions are recorded as necessary to permit preparation of financial
statements in accordance with GAAP.

     2.24 CORRUPT PRACTICES. No Target Company has taken any action which would
cause it to be in violation of the Foreign Corrupt Practices Act of 1977, as
amended, or any rules and regulations thereunder. No Target Company has paid any
commission or made any payment whether to secure business or otherwise to any
Person which in the hands of such Person would in accordance with the relevant
Legal Requirement be regarded as illegal or improper. No director, officer,
employee, agent or other Person acting on behalf of any Target Company has been
a party to the use of any assets of any Target Company for unlawful
contributions, gifts, entertainment or other unlawful expenses relating to any
activity, including any political activity, or to the establishment or
maintenance of any unlawful or unrecorded fund of monies or other assets, or to
the making of any false or fictitious entries in the books or records of any
Target Company, or to the making of any unlawful payment.

     2.25 DISCLOSURE. No representation or warranty of the Company or of any
Principal Stockholder in this Agreement, as modified by the Company Disclosure
Schedule, or in any other Transaction Document contains any untrue statement of
a material fact, or omits or omits to state any material fact required to be
stated in order to make the statements contained herein or therein not
misleading in light of the circumstances under which they were made. There is no
fact Known to the Company and not disclosed to Parent in writing that is
reasonably likely to give rise to a Company Material Adverse Effect or to have
the effect of preventing, materially delaying, making illegal or otherwise
interfering with the Merger and the other transactions contemplated by this
Agreement.

     2.26 TAXES. The Company has not taken or agreed to take any action that
could reasonably be expected to prevent the Merger from constituting a
"reorganization" under section 368(a) of the Code, and is not aware of any
agreement, plan or other circumstance that could reasonably be expected to
prevent the Merger from so qualifying.

                                    ARTICLE 3
            REPRESENTATIONS AND WARRANTIES OF PRINCIPAL STOCKHOLDERS

     Each Principal Stockholder, other than each Specified Holder (as defined in
Article 3A), severally and not jointly, represents and warrants to Parent and
each Merger Sub as set forth in this Article 3.

     3.1 ORGANIZATION. The Principal Stockholder (if not a natural person) is
duly organized, validly existing and in good standing under the laws of the
jurisdiction in which it is organized.

                                      -46-

<PAGE>

     3.2 AUTHORITY; NON-CONTRAVENTION.

          (a) The Principal Stockholder has all requisite power and authority
(including all requisite power and authority as a corporation or other entity)
to enter into this Agreement and the Escrow Agreement and to consummate the
transactions contemplated hereby and thereby. If the Principal Stockholder is
not a natural person, the execution and delivery of this Agreement and the
Escrow Agreement and the consummation of the transactions contemplated hereby
and thereby have been duly authorized by all necessary action on the part of the
Principal Stockholder (including authorization by the board of directors or
other managing body and by the stockholders or other securityholders of the
Principal Stockholder). This Agreement has been duly executed and delivered by
the Principal Stockholder and, assuming the due authorization, execution and
delivery of this Agreement by Parent, each Merger Sub, the Company, the
Stockholder Representative and the other Principal Stockholders, constitutes the
valid and binding obligation of the Principal Stockholder, enforceable against
the Principal Stockholder in accordance with its terms, except as enforceability
may be limited by bankruptcy and other similar laws affecting the rights of
creditors generally and general principles of equity. Assuming the due
authorization, execution and delivery of the Escrow Agreement by Parent, each
Merger Sub, the Stockholder Representative and the Escrow Agent, the Escrow
Agreement, when executed and delivered by the Stockholder Representative on
behalf of the Principal Stockholder, will constitute the valid and binding
obligation of the Principal Stockholder, enforceable against the Principal
Stockholder in accordance with its terms, except as enforceability may be
limited by bankruptcy and other similar laws affecting the rights of creditors
generally and general principles of equity.

          (b) The execution and delivery of this Agreement and the Escrow
Agreement by or on behalf of the Principal Stockholder does not, and the
performance of this Agreement and the Escrow Agreement by or on behalf of the
Principal Stockholder will not, (i) if the Principal Stockholder is not a
natural person, conflict with or violate the certificate of incorporation,
by-laws or other organizational documents of the Principal Stockholder, (ii)
conflict with or violate any Legal Requirement applicable to the Principal
Stockholder or by which the Principal Stockholder or any of its properties or
assets is bound or affected, or (iii) result in any breach of or constitute a
default (or an event that with notice or lapse of time or both would become a
default) under, or result in the creation of an Encumbrance on any of the
securities of any Target Company pursuant to, any Contract to which the
Principal Stockholder is a party or by which the Principal Stockholder or any of
its properties or assets is bound or affected. No consent, waiver or approval of
any Person, nor any notice to any Person, is required to be obtained or made
under any Contract to which the Principal Stockholder is a party or by which the
Principal Stockholder or any of its properties or assets is bound or affected in
connection with the execution and delivery by or on behalf of the Principal
Stockholder of this Agreement or the Escrow Agreement or the performance of this
Agreement or the Escrow Agreement by or on behalf of the Principal Stockholder.

          (c) No consent, approval, order or authorization of, or registration,
declaration or filing with any Governmental Entity or other Person, is required
to be obtained or made by the Principal Stockholder in connection with the
execution and delivery by or on behalf of the Principal Stockholder of this
Agreement or the Escrow Agreement or the performance of this Agreement or the
Escrow Agreement by or on behalf of the Principal Stockholder.

                                      -47-

<PAGE>

     3.3 TITLE TO COMPANY STOCK; STATUS AS COMPANY STOCKHOLDER. The Principal
Stockholder holds of record and owns the number of shares of Company Stock set
forth next to the name of the Principal Stockholder on Part 2.2(a) of the
Company Disclosure Schedule, free and clear of any Encumbrances. The Principal
Stockholder agrees to be bound be all provisions of this Agreement and to be
subject to all obligations imposed on the Principal Stockholder as a Company
Stockholder hereunder.

     3.4 WAIVER OF APPRAISAL RIGHTS. The Principal Stockholder acknowledges that
he, she or it (a) has received a copy of Sections 3-201 through 3-213 of the
MGCL, and (b) will not exercise any right pursuant to Sections 3-201 through
3-213 of the MGCL (or otherwise) to dissent from the Merger or to demand an
appraisal of the fair value of the shares of Company Capital Stock held by the
Principal Stockholder.

     3.5 AGREEMENTS WITH THE COMPANY. Except to the extent the Company
Disclosure Schedule specifically names the Principal Stockholder as a party
thereto, neither the Principal Stockholder nor any of its properties or assets
is a party or otherwise subject to any Contract to which any Target Company is a
party or by which any Target Company or any of its properties or assets is bound
or affected.

     3.6 BROKERS' AND FINDERS' FEES. The Principal Stockholder has not incurred,
nor will it incur, directly or indirectly, any liability for brokerage or
finders' fees or agents' commissions or any similar charges in connection with
this Agreement or any transaction contemplated hereby.

     3.7 ACCREDITED INVESTOR QUESTIONNAIRE. The Principal Stockholder has, on or
prior to the date hereof, completed and returned to the Company an executed
Investor Questionnaire in the Form of Exhibit D hereto ("INVESTOR
QUESTIONNAIRE"), and the information provided in such Investor Questionnaire is
true and correct in all respects.

                                   ARTICLE 3A
               REPRESENTATIONS AND WARRANTIES OF SPECIFIED HOLDERS

     Trinity SBIC, L.P. (the "SPECIFIED HOLDER"), severally and not jointly,
represents and warrants to Parent and each Merger Sub as set forth in this
Article 3A.

     3A.1 AUTHORITY. The execution and delivery of this Agreement and the Escrow
Agreement and the consummation of the transactions contemplated hereby and
thereby have been duly authorized by all necessary action on the part of the
Specified Holder (including, if required, authorization by the board of
directors or other managing body and by the stockholders or other
securityholders of the Specified Holder). This Agreement has been duly executed
and delivered by the Specified Holder and, assuming the due authorization,
execution and delivery of this Agreement by Parent, each Merger Sub, the
Company, the Stockholder Representative and the other Principal Stockholders,
constitutes the valid and binding obligation of the Specified Holder,
enforceable against the Specified Holder in accordance with its terms, except as
enforceability may be limited by bankruptcy and other similar laws affecting the
rights of creditors generally and general principles of equity. Assuming the due
authorization, execution and delivery of the Escrow Agreement by Parent, each
Merger Sub, the Stockholder

                                      -48-

<PAGE>

Representative and the Escrow Agent, the Escrow Agreement, when executed and
delivered by the Stockholder Representative on behalf of the Specified Holder,
will constitute the valid and binding obligation of the Specified Holder,
enforceable against the Specified Holder in accordance with its terms, except as
enforceability may be limited by bankruptcy and other similar laws affecting the
rights of creditors generally and general principles of equity.

     3A.2 TITLE TO COMPANY STOCK; STATUS AS COMPANY STOCKHOLDER. The Specified
Holder holds of record and owns the number of shares of Company Stock set forth
next to the name of the Specified Holder on Part 2.2(a) of the Company
Disclosure Schedule, free and clear of any Encumbrances. The Specified Holder
agrees to be bound be all provisions of this Agreement and to be subject to all
obligations imposed on the Specified Holder as a Company Stockholder hereunder.

     3A.3 WAIVER OF APPRAISAL RIGHTS. The Specified Holder acknowledges that he,
she or it (a) has received a copy of Sections 3-201 through 3-213 of the MGCL,
and (b) will not exercise any right pursuant to Sections 3-201 through 3-213 of
the MGCL (or otherwise) to dissent from the Merger or to demand an appraisal of
the fair value of the shares of Company Capital Stock held by the Specified
Holder.

     3A.4 BROKERS' AND FINDERS' FEES. The Specified Holder has not incurred, nor
will it incur, directly or indirectly, any liability for brokerage or finders'
fees or agents' commissions or any similar charges in connection with this
Agreement or any transaction contemplated hereby.

     3A.5 ACCREDITED INVESTOR QUESTIONNAIRE. The Specified Holder has, on or
prior to the date hereof, completed and returned to the Company an executed
Investor Questionnaire, and the information provided in such Investor
Questionnaire is true and correct in all respects.

                                    ARTICLE 4
            REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUBS

     As of the date of this Agreement and as of the Closing Date, Parent and
each Merger Sub, jointly and severally, represent and warrant to the Company and
the Company Stockholders as set forth in this Article 4, subject to any
exceptions expressly stated in the disclosure schedule delivered by Parent to
the Company dated as of the date hereof and certified by a duly authorized
officer of Parent (the "PARENT DISCLOSURE SCHEDULE"). Exceptions on the Parent
Disclosure Schedule shall specifically identify the representation to which they
relate; provided, however, that any matter disclosed pursuant to one section or
subsection of the Parent Disclosure Schedule is deemed disclosed for such other
sections or subsections of the Parent Disclosure Schedule as, and only to the
extent that, it is reasonably apparent that such matter relates to such other
section or subsection of the Parent Disclosure Schedule and the level of
particularity and manner of disclosure of the matter expressly disclosed in one
section or subsection of the Parent Disclosure Schedule would make a reasonable
person aware that such disclosure is relevant to such other sections or
subsections.

     4.1 ORGANIZATION OF PARENT AND MERGER SUBS.

          (a) Each of Parent and each Merger Sub (i) is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction in which it is organized;

                                      -49-

<PAGE>

(ii) has the corporate or other power and authority to own, lease and operate
its assets and property and to carry on its business as now being conducted; and
(iii) except as would not be material to Parent, is duly qualified or licensed
to do business in each jurisdiction where the character of the properties owned,
leased or operated by it or the nature of its activities makes such
qualification or licensing necessary.

          (b) Parent has delivered or made available to Company a true and
correct copy of the Certificate of Incorporation and Bylaws of Parent and each
Merger Sub, each as amended to date (collectively, the "PARENT CHARTER
DOCUMENTS"), and each such instrument is in full force and effect. Neither
Parent nor either Merger Sub is in violation of any of the provisions of the
Parent Charter Documents. Parent has delivered or made available to Company all
proposed or considered amendments to the Parent Charter Documents.

     4.2 PARENT AND MERGER SUB CAPITALIZATION.

          (a) The authorized capital stock of Parent consists of 200,000,000
shares of common stock, par value $0.01 per share (the "PARENT COMMON STOCK"),
of which there were 111,920,390 shares issued and outstanding as of the close of
business on August 31, 2006 and 10,000,000 shares of preferred stock, par value
$0.01 per share, of which no shares are issued or outstanding. All outstanding
shares of Parent Common Stock are duly authorized, validly issued, fully paid
and nonassessable.

          (b) The authorized capital stock of each Merger Sub consists of 1,000
shares of common stock, all of which, as of the date hereof, are issued and
outstanding and are held by Parent. All of the outstanding shares of each Merger
Sub's common stock have been duly authorized and validly issued, and are fully
paid and nonassessable. Each Merger Sub was formed for the purpose of
consummating the Merger and has no material assets or liabilities except as
necessary for such purpose.

          (c) The Parent Common Stock to be issued in the Merger, when issued in
accordance with the provisions of this Agreement, will be validly issued, fully
paid and nonassessable.

     4.3 AUTHORITY; NON-CONTRAVENTION.

          (a) Parent and each Merger Sub have all requisite corporate power and
authority to enter into this Agreement and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly authorized
by all necessary corporate action on the part of Parent and each Merger Sub,
subject only to the filing of the Articles of Merger and the Second Articles of
Merger pursuant to the MGCL. This Agreement has been duly executed and delivered
by Parent and each Merger Sub and, assuming the due authorization, execution and
delivery by the Company, constitutes the valid and binding obligations of Parent
and each Merger Sub, enforceable against Parent and such Merger Sub in
accordance with its terms, except as enforceability may be limited by bankruptcy
and other similar laws affecting the rights of creditors generally and general
principles of equity.

                                      -50-

<PAGE>

          (b) The execution and delivery of this Agreement by Parent and each
Merger Sub does not, and the performance of this Agreement by Parent and each
Merger Sub will not (i) conflict with or violate the Parent Charter Documents or
(ii) subject to compliance with the requirements set forth in Section 4.3(c)
below, conflict with or violate any material law, rule, regulation, order,
judgment or decree applicable to Parent or either Merger Sub or by which any of
their respective material properties is bound or affected.

          (c) No consent, approval, order or authorization of, or registration,
declaration or filing with any Governmental Entity or other person is required
to be obtained or made by Parent or either Merger Sub in connection with the
execution and delivery of this Agreement or the consummation of the Merger,
except for (i) the filing of the Articles of Merger and the Second Articles of
Merger with the Secretary of State of the State of Maryland, (ii) such consents,
approvals, orders, authorizations, registrations, declarations and filings as
may be required under applicable federal, foreign and state securities (or
related) laws and the securities or antitrust laws of any foreign country, and
(iii) such other consents, authorizations, filings, approvals and registrations
which if not obtained or made would not be material to Parent or the Surviving
Corporation or have a material adverse effect on the ability of the parties
hereto to consummate the Merger or the Second Step Merger.

     4.4 SEC FILINGS. Since January 1, 2003, Parent has filed all forms, reports
and documents required to be filed by Parent with the SEC, and has made
available to the Company such forms, reports and documents in the form filed
with the SEC (if and to the extent such forms, reports and documents are not
available on EDGAR). None of Parent's subsidiaries is required to file any
forms, reports or other documents with the SEC. As of the date hereof, Parent is
eligible to use Form S-3 to register the resale of its securities.

     4.5 LITIGATION. Except as set forth on Part 4.5 of the Parent Disclosure
Schedule, there are no claims, suits, actions or proceedings pending or, to the
knowledge of Parent, threatened against, relating to or affecting Parent or any
of its subsidiaries, before any Governmental Entity or any arbitrator that seeks
to restrain or enjoin the consummation of the transactions contemplated by this
Agreement or which could reasonably be expected, either singularly or in the
aggregate with all such claims, actions or proceedings, to be material to Parent
or have a material adverse effect on the ability of the parties hereto to
consummate the Merger.

     4.6 BROKERS' AND FINDERS' FEES. Except for fees payable to Raymond James &
Associates, Parent has not incurred, nor will it incur, directly or indirectly,
any liability for brokerage or finders' fees or agents' commissions or any
similar charges in connection with this Agreement or any transaction
contemplated hereby.

     4.7 SEC DOCUMENTS; PARENT FINANCIAL STATEMENTS. Parent has made available
to the Company, or the Electronic Data Gathering, Analysis and Retrieval (EDGAR)
database of the SEC contains in a publicly available format, each statement,
report, registration statement (with the prospectus in the form filed pursuant
to Rule 424(b) of the Securities Act), definitive proxy statement and other
filing filed with the SEC by Parent since January 1, 2004 (collectively, the
"PARENT SEC DOCUMENTS"). In addition, Parent has made available to the Company
all exhibits (subject to redaction) to the Parent SEC Documents filed prior to
the Agreement Date

                                      -51-

<PAGE>

that have been requested by the Company and, upon the Company's request, will
promptly make available to the Company all exhibits (subject to redaction) to
any additional Parent SEC Documents filed prior to the Effective Time. As of
their respective filing dates (or if amended or supplemented by a filing, then
on the date of such subsequent filing), the Parent SEC Documents complied in all
material respects with the requirements of the Exchange Act and the Securities
Act, and none of the Parent SEC Documents contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements made therein, in light of the circumstances
under which they were made, not misleading, except to the extent corrected by a
subsequently filed Parent SEC Document. The financial statements of Parent,
including the related notes thereto, included in the Parent SEC Documents (the
"PARENT FINANCIAL STATEMENTS") complied as to form in all material respects with
the published rules and regulations of the SEC with respect thereto as of their
respective dates and were prepared in accordance with GAAP applied on a basis
consistent throughout the periods indicated (except as may be indicated in the
notes thereto or, in the case of unaudited statements, as permitted by the SEC
on Form 10 Q, 8-K or any successor form under the Exchange Act). The Parent
Financial Statements fairly present in all material respects the consolidated
financial condition and operating results of Parent at the dates and during the
periods indicated therein (except that unaudited statements may not contain
footnotes and were or are subject to normal and recurring year end adjustments).
Parent has no material off-balance sheet arrangements as defined in Item
303(a)(4)(ii) of Regulation S-K of the SEC.

     4.8 TAXES.

          (a) Neither Parent nor any of its Affiliates has taken or agreed to
take any action that could reasonably be expected to prevent the Merger from
constituting a "reorganization" under section 368(a) of the Code. Parent is not
aware of any agreement, plan or other circumstance that could reasonably be
expected to prevent the Merger from so qualifying.

          (b) Parent does not have a plan or intention to reacquire, and to
Parent's knowledge, no person related to Parent within the meaning of Treasury
Regulation section 1.368-1(e)(3) has a plan or intention to acquire, any Parent
stock issued in the Merger other than pursuant to a share repurchase program
described in Revenue Ruling 99 - 58.

          (c) Parent has no plan or intention to liquidate the Surviving
Corporation or to cause the Surviving Corporation to merge into another
corporation.

          (d) Parent has no plan or intention to cause the Surviving Corporation
to sell, transfer or otherwise dispose of any of the Surviving Corporation's
assets, except for dispositions made in the ordinary course of business and
transfers described in section 368(a)(2)(C) of the Code and the Treasury
Regulations issued thereunder.

          (e) Following the Merger, Parent will cause the Surviving Corporation
to continue the Company's historic business or use a significant portion of the
Company's historic business assets in a business within the meaning of section
1.368-1(d) of the Treasury Regulations, assuming that the assets of, and the
business conducted by, the Company on the Closing Date constitute the Company's
historic business assets and historic business, respectively.

                                      -52-

<PAGE>

          (f) Following the Merger, Parent has no plan or intention to cause the
Surviving Corporation to issue additional shares that will result in Parent
losing control of the Surviving Corporation within the meaning of section 368(c)
of the Code.

     4.9 NON-AFFILIATE. At no time prior to the execution and delivery of this
Agreement and the Voting Agreements has Parent or either Merger Sub been a
person that directly, or indirectly through one or more intermediaries,
controls, or is controlled by, or is under common control with, the Company.

                                    ARTICLE 5
                       CONDUCT PRIOR TO THE EFFECTIVE TIME

     5.1 CONDUCT OF BUSINESS BY THE COMPANY. During the period from the date of
this Agreement and continuing until the earlier of the termination of this
Agreement pursuant to its terms or the Effective Time, the Company and each of
its subsidiaries shall, except to the extent that Parent shall otherwise consent
in writing, carry on its business in the usual, regular and ordinary course, in
substantially the same manner as heretofore conducted and in compliance in all
material respects with all applicable laws and regulations, pay its debts and
Taxes in the ordinary course of business, consistent with past practice, subject
to good faith disputes over such debts or Taxes, pay or perform other material
obligations in the ordinary course of business consistent with past practice,
and use its commercially reasonable efforts, consistent with past practice to
(i) preserve intact its present business organization, (ii) keep available the
services of its present officers and employees, (iii) collect its accounts
receivable and any other amounts payable to it when due and otherwise enforce
any obligations owed to it by others substantially in accordance with their
terms, and (iv) preserve its relationships with customers, suppliers, licensors,
licensees, and others with which it has business dealings. In addition, the
Company will promptly notify Parent of any material event involving its business
or operations.

     In addition, except as permitted by the terms of this Agreement, without
the prior written consent of Parent, during the period from the date of this
Agreement and continuing until the earlier of the termination of this Agreement
pursuant to its terms or the Effective Time, the Company shall not do any of the
following and shall not permit its subsidiaries to do any of the following:

          (a) Waive any stock repurchase rights, accelerate, amend or change the
period of exercisability of options or repurchase of restricted stock, or
reprice options granted to any employee, consultant, director or authorize cash
payments in exchange for any options or take any such action with regard to any
warrant or other right to acquire the Company's capital stock;

          (b) Grant any severance or termination pay to any officer or employee
except pursuant to written agreements in effect, or policies existing, on the
date hereof and as previously disclosed in writing to Parent, or adopt any new
severance plan;

          (c) Transfer or license to any person or entity or otherwise extend,
amend or modify in any material respect any rights to the Company Intellectual
Property, other than non-exclusive licenses in the ordinary course of business
and consistent with past practice;

                                      -53-

<PAGE>

          (d) Declare, set aside or pay any dividends on or make any other
distributions (whether in cash, stock, equity securities or property) in respect
of any capital stock or split, combine or reclassify any capital stock or issue
or authorize the issuance of any other securities in respect of, in lieu of or
in substitution for any capital stock;

          (e) Purchase, redeem or otherwise acquire, directly or indirectly, any
shares of capital stock of the Company or its subsidiaries, except repurchases
of unvested shares at cost in connection with the termination of the employment
relationship with any employee pursuant to option agreements or purchase
agreements in effect on the date hereof;

          (f) Issue, deliver, sell, authorize, pledge or otherwise encumber any
shares of capital stock or any securities convertible into shares of capital
stock, or subscriptions, rights, warrants or options to acquire any shares of
capital stock or any securities convertible into shares of capital stock, or
enter into other agreements or commitments of any character obligating it to
issue any such shares or convertible securities, other than the issuance,
delivery and/or sale of shares of Company Common Stock pursuant to the exercise
of currently outstanding Company Convertible Securities.

          (g) Cause, permit or propose any amendments to the Company Charter
Documents or to the charter documents of any subsidiary;

          (h) Acquire or agree to acquire by merging or consolidating with, or
by purchasing any equity interest in or a portion of the assets of, or by any
other manner, any business or any corporation, partnership, association or other
business organization or division thereof; or otherwise acquire or agree to
acquire any assets which are material, individually or in the aggregate, to the
business of the Company or enter into any material joint ventures, strategic
relationships or alliances or make any material loan or advance to, or
investment in, any person, except for loans or capital contributions to a
subsidiary or advances of routine business or travel expenses to employees,
officers or directors in the ordinary course of business, consistent with past
practice;

          (i) Sell, lease, license, encumber or otherwise dispose of any
properties or assets which are material, individually or in the aggregate, to
the business of the Company;

          (j) Incur any indebtedness for borrowed money or guarantee any such
indebtedness of another person, issue or sell any debt securities or options,
warrants, calls or other rights to acquire any debt securities of the Company,
enter into any "keep well" or other agreement to maintain any financial
statement condition or enter into any arrangement having the economic effect of
any of the foregoing other than (i) in connection with the financing of ordinary
course trade payables consistent with past practice or (ii) pursuant to existing
credit facilities in the ordinary course of business;

          (k) Adopt or amend any employee benefit plan or employee stock
purchase or employee stock option plan, or enter into any employment contract or
collective bargaining agreement (other than offer letters and letter agreements
entered into in the ordinary course of business consistent with past practice
with employees who are terminable "at will"), pay any special bonus or special
remuneration to any director or employee, or increase the salaries or

                                      -54-

<PAGE>

wage rates or fringe benefits (including rights to severance or indemnification)
of its directors, officers, employees or consultants other than in the ordinary
course of business, consistent with past practice, or change in any material
respect any management policies or procedures; provided that, notwithstanding
the foregoing, the Company may agree to pay, and may accrue, the Transaction
Bonuses;

          (l) Make any capital expenditures outside of the ordinary course of
business in excess of $10,000 in the aggregate;

          (m) Modify, amend or terminate any material Company Contract or waive,
release or assign any material rights or claims thereunder; provided, that (i)
the renewal in the ordinary course of business of any software maintenance
agreement that is in force on the date of this Agreement, which renewal is on
terms substantially as favorable to the Company as those of the agreement
currently in force, shall not be deemed to constitute a modification or
amendment prohibited by this clause (m) and (ii) the consent of Parent to any
such modification, amendment or termination shall not unreasonably be withheld
or delayed;

          (n) Enter into any development services, licensing, distribution,
sales, sales representation or other similar agreement or obligation with
respect to any material Intellectual Property or enter into any contract of a
character required to be disclosed by Section 2.16 other than such agreements
entered into in the ordinary course of business consistent with past practices,
including pricing and contract terms;

          (o) Materially revalue any of its assets or, except as required by
GAAP, make any change in accounting methods, principles or practices;

          (p) Discharge, settle or satisfy any disputed claim, litigation,
arbitration, disputed liability or other controversy (absolute, accrued,
asserted or unasserted, contingent or otherwise), including any liability for
Taxes, other than the discharge or satisfaction in the ordinary course of
business consistent with past practice, or in accordance with their terms, of
liabilities reflected or reserved against in the Company Balance Sheet in the
ordinary course of business consistent with past practice, or waive any material
benefits of, or agree to modify in any material respect, any confidentiality,
standstill or similar agreements to which the Company or any of its subsidiaries
is a party; provided, however, that the discharge or settlement of any disputed
claim, liability or other controversy in the amount of less than $10,000 shall
not be deemed to be prohibited by the foregoing;

          (q) Take any action that would be reasonably likely to interfere with
the treatment of the Merger as a "reorganization" within the meaning of Section
368 of the Code;

          (r) Engage in any action with the intent to directly or indirectly
adversely affect any of the transactions contemplated by this Agreement,
including with respect to any "poison pill" or similar plan, agreement or
arrangement, or any anti-takeover, control share acquisition, fair price,
moratorium or other similar statute; or

          (s) Agree in writing or otherwise to take any of the actions described
in Section 5.1(a) through 5.1(r) above.

                                      -55-
<PAGE>

     5.2 COVENANT OF PARENT. During the period from the date of this Agreement
and continuing until the earlier of the termination of this Agreement or the
Effective Time, Parent agrees (except as expressly contemplated by this
Agreement or with Company's prior written consent) that Parent will promptly
apply for or otherwise seek, and use its commercially reasonable efforts to
obtain, all consents and approvals, and make all filings, required for the
consummation of the Merger.

                                    ARTICLE 6
                              ADDITIONAL AGREEMENTS

     6.1 REGISTRATION FOR RESALE.

          (a) For purposes of this Agreement, the term "REGISTRABLE SECURITIES"
shall mean (i) the shares of Parent Common Stock acquired by the Company
Stockholders or the recipient of any Transaction Bonus hereunder (each a
"HOLDER"), (ii) any shares of Parent Common Stock issued or issuable by Parent
in respect of the shares of Parent Common Stock acquired by the Holders
hereunder, whether by means of a stock split, stock dividend or otherwise, and
(iii) any other securities issued or issuable by Parent in respect of the shares
of Parent Common Stock referred to in clauses (i) and (ii) above, whether by
means of a merger, consolidation, recapitalization, reorganization or similar
event, but only if at the time of registration Parent shall have listed such
other securities for trading on a national securities exchange. Any of the
foregoing securities will cease to be Registrable Securities if and when they
(i) have been registered by Parent under the Securities Act and either (A)
disposed of pursuant to such registration statement, or (B) such registration
continues to be effective at the time of inquiry, (ii) have been sold,
transferred, distributed or otherwise disposed of by a Holder (other than a
Permitted Transfer or upon death by will or in accordance with the laws of
descent and distribution), or (iii) on the date on which all of such Holder's
Registrable Securities may be sold within a 90-day period pursuant to Rule 144
under the Securities Act.

          (b) Parent hereby agrees to prepare and file with the SEC, as soon as
practicable but in any event not later than 20 days following the Closing, a
registration statement (the "REGISTRATION STATEMENT") on Form S-3 (or any
successor form), in compliance with the Securities Act, with respect to the
resale of the Registrable Securities, provided that at the time of the filing of
the Registration Statement Parent shall be eligible to use Form S-3 (or any
successor short-form registration statement available for such resale that
permits incorporation by reference at least to the same extent as such form)
with respect to the disposition of the Registrable Securities. Parent shall use
any other applicable and available form to register the Registrable Securities
as soon as reasonably practicable and otherwise in accordance with the terms
hereof in the event that it is not eligible to use Form S-3 as provided above.

          (c) Parent shall (i) use commercially reasonable efforts to cause the
Registration Statement to become effective, and (ii) maintain the effectiveness
of the Registration Statement until the close of business on the second
anniversary of the Closing Date; provided, however, that Parent's obligations
under this Section 6.1 shall be suspended during any period (A) when Parent
shall in good faith conclude in its sole discretion, after consultation with its
legal counsel, that it is advisable to suspend use of any prospectus as a result
of pending corporate developments, the disclosure requirements of the securities
laws or other events

                                      -56-

<PAGE>

deemed material by Parent or (B) when the filing or effectiveness of the
Registration Statement could, in the opinion of Parent, after consultation with
its financial advisors, impair Parent's ability to pursue a financing,
acquisition or other transaction; and provided further, that no period during
which the use of any prospectus shall be suspended pursuant to clause (A) or
clause (B) above shall continue for more than 120 days. Parent shall prepare and
file with the SEC such amendments and supplements to the Registration Statement
and the prospectus used in connection therewith as may be necessary in its
opinion to comply with its obligations under this Section 6.1.

          (d) If Parent's obligations under this Section 6.1 are suspended for
any reason, Parent shall promptly provide the Stockholder Representative with
written or oral notice of both the commencement and termination of the period of
suspension. After receipt of such notice, each Holder hereby agrees that he or
it shall not offer, sell, pledge, hypothecate, transfer, distribute or otherwise
dispose of, in reliance on the Registration Statement, any of such Holder's
Registrable Securities during any period in which Parent's obligations under
this Section 6.1 are suspended. In addition, each Holder hereby acknowledges
that, in order to ensure compliance with insider trading and other securities
laws, Parent from time to time imposes restrictions on the trading of its
securities by its directors, officers, employees and others, and each Holder
hereby agrees to comply with those restrictions as long as they apply to such
Holder.

          (e) It shall be a condition to Parent's obligations under this Section
6.1 that each Holder (i) shall have promptly taken all such actions as Parent
shall reasonably request in connection with the Registration Statement and (ii)
shall have provided promptly (and in any event within seven business days) such
information and other materials as Parent or its counsel shall request in
connection with the Registration Statement. Each Holder hereby represents,
warrants and agrees that all such information provided by such Holder or on his
behalf shall be true, complete and correct. Each Holder shall comply with the
Securities Act and any other Legal Requirements applicable to any disposition of
any Registrable Securities pursuant to the Registration Statement.

          (f) Parent shall pay all expenses incurred by it in complying with its
obligations under this Section 6.1, including registration and filing fees,
listing fees, printing expenses, messenger and delivery expenses, fees and
expenses of Parent's counsel, fees and expenses of Parent's accountants, and
Parent's internal expenses. Each Holder shall pay all expenses incurred by such
Holder in connection with the disposition of his or its Registrable Securities,
including any broker's fees or commissions, selling expenses, messenger and
delivery expenses, and fees and expenses of any counsel retained by such Holder.

          (g) Parent's obligations under this Section 6.1 shall terminate, with
respect to each Holder, on the date on which all of such Holder's Registrable
Securities may be sold within a 90-day period pursuant to Rule 144 under the
Securities Act. Each Holder's rights under this Section 6.1 are personal to such
Holder and non-transferable except in a Permitted Transfer or by will or in
accordance with the laws of descent and distribution; provided that a Holder's
rights under this Section 6.1 may only be transferred in a Permitted Transfer
if: (a) Parent is given written notice by the Holder at the time of such
Permitted Transfer stating the name and address of the Permitted Transferee and
identifying the Registrable Securities with respect to which the rights under
this Section 6.1 are being assigned, (b) such Permitted Transferee executes and

                                      -57-

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delivers such agreements as Parent may reasonably require in order to confirm
that such Permitted Transferee agrees to be bound by this Agreement, and (c)
notwithstanding anything to the contrary contained in this Agreement, Parent
shall not be obligated to file any post-effective amendments or prospectus
supplements to the Registration Statement for the purposes of updating the
selling stockholders listed in the Registration Statement to include the
Permitted Transferee.

     6.2 RESTRICTIVE LEGEND; LOCK-UP AGREEMENT.

          (a) Unless Parent has otherwise agreed or consented in writing, in
addition to any restrictions imposed by applicable law or other agreements, no
Holder shall sell, transfer, hedge, pledge, hypothecate, assign or otherwise
convey any interest in (collectively, "SELL") any shares of Parent Common Stock
received as part of the Base Merger Consideration or the Transaction Bonuses
other than shares included in the Working Capital Escrow or Indemnity Escrow and
other than in a Permitted Transfer (provided that the Permitted Transferee in
such Permitted Transfer shall have agreed in writing to undertake the
obligations of the Holder under this Agreement and to be bound by the escrow and
indemnification provisions hereof, the following restrictions on transfer and
all other provisions set forth herein that relate to such Parent Common Stock),
for a period of three (3) months following the Closing Date, at which point such
restrictions shall lapse as to one-twelfth (1/12) of such shares of Parent
Common Stock; and such restrictions shall lapse as to an additional one-twelfth
(1/12) of such shares of Parent Common Stock on each subsequent monthly
anniversary of the Closing Date such that this restriction lapse completely on
the 14 month anniversary of this Agreement (the "LOCK-UP AGREEMENT"). The
certificates representing any shares of Parent Common Stock subject to this
Lock-Up Agreement shall bear, in addition to any other legends provided for in
this Section 6.2, , a legend in substantially the following form:

     "The shares represented by this certificate are subject to restrictions on
     transfer pursuant to that certain Agreement and Plan of Merger dated as of
     September 18, 2006. by and among the Corporation, eStara, Inc., Arlington
     Acquisition Corp., Storrow Acquisition Corp., and the Stockholder
     Representative and Principal Stockholders named therein, a copy of which is
     available from the Corporation upon request."

     Notwithstanding any provision of Sections 6.1 or 6.2 to the contrary, the
Specified Holder, or the United States Small Business Administration, acting as
a Receiver for the Specified Holder, may sell Parent Common Stock received as
Merger Consideration (or the equity interests of the Specified Holder) to any
person that purchases for value all or substantially all the assets or equity
interests of the Specified Holder (a "SPECIFIED HOLDER PERMITTED TRANSFEREE");
provided that such Specified Holder Permitted Transferee shall have agreed in
writing to undertake the obligations of the Specified Holder under this
Agreement and to be bound by the escrow and indemnification provisions hereof,
the foregoing restrictions on transfer and all other provisions set forth herein
that relate to such Parent Common Stock.

          (b) The certificates representing any shares of Parent Common Stock
issued pursuant to this Agreement shall bear, in addition to any other legends
required under applicable state securities or "blue sky" laws, a legend in
substantially the following form:

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<PAGE>

     "These securities have not been registered under the Securities Act of
     1933, as amended (the 'Securities Act'), or under any applicable state
     securities or 'blue sky' laws. These securities may not be sold, offered,
     pledged, hypothecated or otherwise transferred except (i) pursuant to
     registration under the Securities Act or pursuant to an available exemption
     from registration, or (ii) with written permission of the issuer of these
     securities. The issuer of these securities may require an opinion of
     counsel reasonably satisfactory to the issuer, in form and substance
     reasonably satisfactory to the issuer, to the effect that any sale or
     transfer of these securities will be in compliance with the Securities Act
     and any applicable state securities or 'blue sky' laws."

          (c) In order to prevent any transfer of such shares of Parent Common
Stock from taking place in violation of applicable Legal Requirement or the
terms of this Agreement, Parent may cause a stop transfer order to be placed
with its transfer agent with respect to any such shares of Parent Common Stock.
Parent will not be required to transfer on its books any shares of Parent Common
Stock that have been sold or transferred in violation of any provision of
applicable Legal Requirement or the terms of this Agreement.

     6.3 ANTITRUST AND OTHER FILINGS.

          (a) As promptly as practicable after the execution of this Agreement,
each of the Company and Parent will prepare and file any pre-merger notification
forms required by the merger notification or control laws and regulations of any
applicable jurisdiction, as agreed to by the parties (the "ANTITRUST FILINGS")
and (ii) any other filings required to be filed by it under the Exchange Act,
the Securities Act or any other federal, state or foreign laws relating to the
Merger and the transactions contemplated by this Agreement (the "OTHER
Filings"). The Company and Parent each shall promptly supply the other with any
information which may be required in order to effectuate any filings pursuant to
this Section 6.3.

          (b) Each of the Company and Parent will notify the other promptly upon
the receipt of any comments from any government officials in connection with any
filing made pursuant hereto and of any request by any government officials for
amendments or supplements to any Antitrust Filings or Other Filings or for
additional information and will supply the other with copies of all
correspondence between such party or any of its representatives, on the one
hand, and the government officials, on the other hand, with respect to the
Merger or any Antitrust Filing or Other Filing. Each of the Company and Parent
will cause all documents that it is responsible for filing with regulatory
authorities under this Section 6.3 to comply in all material respects with all
applicable requirements of law and the rules and regulations promulgated
thereunder. Whenever any event occurs which is required to be set forth in an
amendment or supplement to any Antitrust Filing or Other Filing, the Company or
Parent, as the case may be, will promptly inform the other of such occurrence
and cooperate in filing with the government officials such amendment or
supplement.

     6.4 INFORMATION STATEMENT; COMPANY STOCKHOLDER MEETING. Promptly after the
execution of this Agreement, but in any event no later than September 19, 2006,
the Company shall mail to the Company Stockholders an information statement (the
"INFORMATION STATEMENT") for use by the Company in connection with its
solicitation of the approval of the holders of

                                      -59-

<PAGE>

outstanding Company Capital Stock of the Merger, this Agreement and the
transactions contemplated by this Agreement at a special meeting of the Company
Stockholders to be duly called and convened under Maryland Law (the "SPECIAL
MEETING"). The Information Statement shall be in form and substance reasonably
acceptable to each of Parent and the Company. The Information Statement shall
include (i) proper notice under Maryland Law that the holders of outstanding
Company Capital Stock are or may be entitled to assert dissenters' or appraisal
rights under such law, (ii) a copy of this Agreement, and (iii) a copy of any
other documents and all information required to be disclosed to Company
Stockholders under Maryland Law to approve the Merger, this Agreement and the
transactions contemplated by this Agreement. Each of Parent and the Company
shall provide promptly to the other such information concerning its business and
affairs as any other shall reasonably request for inclusion in such Information
Statement. The Company will promptly advise Parent, and Parent will promptly
advise the Company, if at any time prior to the Effective Time either the
Company or Parent, as applicable, shall obtain knowledge of any facts that might
make it necessary or appropriate to amend or supplement the Information
Statement in order to make the statements contained or incorporated by reference
therein not misleading or to comply with applicable law. Promptly after the
dissemination of the Notice of Stockholders Special Meeting and Information
Statement and in accordance with Maryland Law, the Company shall duly hold the
Special Meeting in accordance with Maryland Law necessary to obtain the
necessary approval and adoption of the Merger, this Agreement and the
transactions contemplated by this Agreement.

     6.5 TAX MATTERS.

          (a) PRIOR TO THE CLOSING. Without the prior written consent of Parent
(which consent shall not be unreasonably withheld), the Company shall not make
or change any election, change an annual accounting period, adopt or change any
accounting method, file any amended Tax Return, enter into any closing
agreement, settle any Tax claim or assessment, surrender any right to claim a
refund of Taxes, consent to any extension or waiver of the limitation period
applicable to any Tax claim or assessment, or take any other similar action
relating to the filing of any Tax Return or the payment of any Tax.

          (b) FOLLOWING THE CLOSING. The following provisions shall govern the
allocation of responsibility as between Parent and the Company Stockholders for
certain tax matters following the Closing Date:

               (i) TAX INDEMNIFICATION. In accordance with the indemnification
     provisions of Article 7 and subject to any limitations contained therein,
     the Company Stockholders shall jointly and severally indemnify the Company,
     Parent and each Parent affiliate and hold them harmless from and against
     without duplication, any loss, claim, liability, expense, or other damage
     attributable to the following Taxes, net of any reserves set forth on the
     Company Balance Sheet: (i) all Taxes (or the non-payment thereof) of the
     Company for all taxable periods ending on or before the Closing Date and
     the portion through the end of the Closing Date for any taxable period that
     includes (but does not end on) the Closing Date ("PRE-CLOSING TAX PERIOD"),
     (ii) all Taxes of any member of an affiliated, consolidated, combined or
     unitary group of which the Company (or any predecessor of the Company) is
     or was a member on or prior to the Closing Date, including pursuant to
     Treasury Regulation Section 1.1502-6 or any analogous or similar state,

                                      -60-
<PAGE>

     local, or foreign law or regulation, and (iii) any and all Taxes of any
     person (other than the Company) imposed on the Company as a transferee or
     successor, by contract or pursuant to any law, rule, or regulation, which
     Taxes relate to an event or transaction occurring before the Closing;
     provided, however, that the Company Stockholders shall not be liable for
     and shall not indemnify against any Taxes under clauses (i), (ii) or (iii)
     relating to any Taxes that result from any election under Section 338 of
     the Code or any similar provisions of domestic or foreign law in connection
     with the transactions contemplated by this Agreement.

               (ii) STRADDLE PERIOD. In the case of any taxable period that
     includes (but does not end on) the Closing Date (a "STRADDLE PERIOD"), the
     amount of any Taxes based on or measured by income or receipts of the
     Company for the Pre-Closing Tax Period shall be determined based on an
     interim closing of the books as of the close of business on the Closing
     Date (and for such purpose, the taxable period of any partnership or other
     pass-through entity in which the Company holds a beneficial interest shall
     be deemed to terminate at such time) and the amount of other Taxes of the
     Company for a Straddle Period that relates to the Pre-Closing Tax Period
     shall be deemed to be the amount of such Tax for the entire taxable period
     multiplied by a fraction the numerator of which is the number of days in
     the taxable period ending on the Closing Date and the denominator of which
     is the number of days in such Straddle Period.

               (iii) RESPONSIBILITY FOR FILING TAX RETURNS. Parent shall prepare
     or cause to be prepared and file or cause to be filed in a timely manner
     all Tax Returns for the Company that are filed after the Closing Date.
     Parent shall permit the Stockholder Representative to review and comment on
     each such Tax Return for a Pre-Closing Tax Period, and shall make such
     changes to the Tax Returns as the Stockholder's Representative reasonably
     requests and that are not otherwise contrary to applicable law.

               (iv) COOPERATION ON TAX MATTERS.

                    (1) Parent, the Company, the Surviving Corporation and the
          Company Stockholders shall cooperate fully, as and to the extent
          reasonably requested by the other Party, in connection with the filing
          of Tax Returns pursuant to this Section 6.5 and any audit, litigation
          or other proceeding with respect to Taxes. Such cooperation shall
          include the retention and (upon the other Party's request) the
          provision of records and information that are reasonably relevant to
          any such audit, litigation or other proceeding and making employees
          available on a mutually convenient basis to provide additional
          information and explanation of any material provided hereunder. The
          Company, the Surviving Corporation and the Company Stockholders agree
          (A) to retain all books and records with respect to Tax matters
          pertinent to the Company relating to any taxable period beginning
          before the Closing Date until the expiration of the statute of
          limitations (and, to the extent notified by Parent and the Company
          Stockholders, any extensions thereof) of the respective taxable
          periods, and to abide by all record retention agreements entered into
          with any taxing authority, and (B) to give the other Party reasonable
          written notice prior to transferring, destroying or discarding any
          such books and records and, if the other Party so requests, Parent or
          the Company

                                      -61-

<PAGE>

          Stockholders, as the case may be, shall allow the other Party to take
          possession of such books and records.

                    (2) Parent and the Company Stockholders further agree, upon
          request, to use their commercially reasonable efforts to obtain any
          certificate or other document from any governmental authority or any
          other Person as may be necessary to mitigate, reduce or eliminate any
          Tax that could be imposed (including, but not limited to, with respect
          to the transactions contemplated hereby).

                    (3) Parent and the Company Stockholders further agree, upon
          request, to provide the other Party with all information that either
          Party may be required to report pursuant to Code Sections 6043 or
          6043A, or Treasury Regulations promulgated thereunder.

               (v) TAX-SHARING AGREEMENTS. All tax-sharing agreements or similar
     agreements with respect to or involving the Company shall be terminated as
     of the Closing Date and, after the Closing Date, the Company shall not be
     bound thereby or have any liability thereunder.

     6.6 CONFIDENTIALITY. The parties acknowledge that the Company and Parent
have previously executed that certain Mutual Non-Disclosure Agreement, dated as
of May 15, 2006 (the "CONFIDENTIALITY AGREEMENT"), which Confidentiality
Agreement will continue in full force and effect in accordance with its terms.

     6.7 ACCESS TO INFORMATION. Parent, on the one hand, and the Company, on the
other, will afford the other party and the other party's accountants, counsel
and other representatives reasonable access to its properties, books, records
and personnel during the period prior to the Effective Time to obtain all
information concerning the business, including the status of product development
efforts, properties, results of operations and personnel, as the other party may
reasonably request. No information or knowledge obtained by a party in any
investigation pursuant to this Section 6.7 will affect or be deemed to modify
any representation or warranty contained herein or the conditions to the
obligations of the parties to consummate the Merger.

     6.8 NO SOLICITATION.

          (a) From and after the date of this Agreement until the Effective Time
or termination of this Agreement pursuant to its terms, the Company will not and
will cause each Target Company not to, and the Company Stockholders will not,
nor will they authorize or permit any of their respective officers, directors,
Affiliates, or employees or any investment banker, attorney or other consultant,
advisor, representative or agent retained by any of them to, directly or
indirectly, (i) solicit, initiate, encourage or induce the making, submission or
announcement of any Acquisition Proposal, (ii) participate in any discussions or
negotiations regarding, or furnish to any Person any nonpublic information with
respect to, or take any other action to facilitate any inquiries or the making
of any proposal that constitutes, or may reasonably be expected to lead to, any
Acquisition Proposal, (iii) engage in discussions with any Person with respect
to any Acquisition Proposal, (iv) approve, endorse or recommend any

                                      -62-

<PAGE>

Acquisition Proposal or (v) enter into any letter of intent or similar document
or any Contract contemplating or otherwise relating to any Acquisition Proposal.
The Company will and will cause each Target Company to, and the Company
Stockholders will, immediately cease any and all existing activities,
discussions or negotiations with any Persons conducted heretofore with respect
to any Acquisition Proposal. Without limiting the foregoing, it is understood
that any violation of the restrictions set forth in the preceding two sentences
by any Target Company, or by any officer, director, Affiliate or employee of any
Target Company or any of the Company Stockholders or any investment banker,
attorney or other consultant, advisor, representative or agent of any Target
Company or any of the Company Stockholders shall be deemed to be a breach of
this Section 6.8 by the Company.

          (b) In addition to the obligations of the Company and the Company
Stockholders set forth in Section 6.8(a), each of the Company and the Company
Stockholders as promptly as practicable, and in any event within 24 hours of its
receipt, shall advise Parent orally and in writing of an Acquisition Proposal or
any request for nonpublic information or other inquiry which the Company or such
Company Stockholder believes or should reasonably believe could lead to an
Acquisition Proposal, the material terms and conditions of such Acquisition
Proposal, request or inquiry, and the identity of the Person or group making any
such Acquisition Proposal, request or inquiry. The Company and the Company
Stockholders will keep Parent informed as promptly as practicable in all
material respects of the status and details (including material amendments or
proposed amendments) of any such Acquisition Proposal, request or inquiry.

     6.9 PUBLIC DISCLOSURE. Parent and the Company will consult with each other,
and to the extent practicable, agree, before issuing any press release or
otherwise making any public statement with respect to the Merger, this Agreement
or an Acquisition Proposal and will not issue any such press release or make any
such public statement prior to such consultation, except as may be required by
law or any listing agreement with a national securities exchange.

     6.10 REASONABLE EFFORTS; NOTIFICATION.

          (a) Upon the terms and subject to the conditions set forth in this
Agreement, each of the parties agrees to use all commercially reasonable efforts
to take, or cause to be taken, all actions, and to do, or cause to be done, and
to assist and cooperate with the other parties in doing, all things necessary,
proper or advisable to consummate and make effective, in the most expeditious
manner practicable, the Merger and the other transactions contemplated by this
Agreement, including using all commercially reasonable efforts to accomplish the
following: (i) causing the conditions precedent set forth in Article 8 to be
satisfied, (ii) obtaining all necessary actions or nonactions, waivers,
consents, approvals, orders and authorizations from Governmental Entities and
making of all necessary registrations, declarations and filings (including
registrations, declarations and filings with Governmental Entities) and taking
all steps that may be necessary to avoid any suit, claim, action, investigation
or proceeding by any Governmental Entity, (iii) obtaining all necessary
consents, approvals or waivers from third parties, (iv) defending any suits,
claims, actions, investigations or proceedings, whether judicial or
administrative, challenging this Agreement or the consummation of the
transactions contemplated hereby, including seeking to have any stay or
temporary restraining order entered by any court or other Governmental Entity
vacated or reversed and (v) executing and delivering

                                      -63-

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any additional instruments necessary to consummate the transactions contemplated
by, and to fully carry out the purposes of, this Agreement. Notwithstanding
anything in this Agreement to the contrary, neither Parent nor any of its
affiliates shall be under any obligation to make proposals, execute or carry out
agreements or submit to orders providing for the sale or other disposition or
holding separate (through the establishment of a trust or otherwise) of any
assets or categories of assets of Parent or any of its affiliates or the Company
or any of its subsidiaries or the holding separate of the shares of Company
Common Stock (or shares of stock of the Surviving Corporation) or imposing or
seeking to impose any limitation on the ability of Parent or any of its
subsidiaries or affiliates to conduct their business or own such assets or to
acquire, hold or exercise full rights of ownership of the shares of Company
Common Stock (or shares of stock of the Surviving Corporation).

          (b) Each of the Company and Parent will give prompt notice to the
other of (i) any notice or other communication from any person alleging that the
consent of such person is or may be required in connection with the Merger, (ii)
any notice or other communication from any Governmental Entity in connection
with the Merger, (iii) any litigation relating to, involving or otherwise
affecting the Company, Parent or their respective subsidiaries that relates to
the consummation of the Merger. The Company shall give prompt notice to Parent
of any representation or warranty made by it contained in this Agreement
becoming untrue or inaccurate, or any failure of the Company to comply with or
satisfy in any material respect any covenant, condition or agreement to be
complied with or satisfied by it under this Agreement; provided, however, that
no such notification shall affect the representations, warranties, covenants or
agreements of the parties or the conditions to the obligations of the parties
under this Agreement. Parent shall give prompt notice to the Company of any
representation or warranty made by it or either Merger Sub contained in this
Agreement becoming untrue or inaccurate, or any failure of Parent or either
Merger Sub to comply with or satisfy in any material respect any covenant,
condition or agreement to be complied with or satisfied by it under this
Agreement; provided, however, that no such notification shall affect the
representations, warranties, covenants or agreements of the parties or the
conditions to the obligations of the parties under this Agreement.

          (c) The Company shall give prompt notice to Parent of receipt by the
Company of any demand for appraisal rights pursuant to 3-203 of the MGCL.

          (d) The Company shall promptly deliver to each Company Stockholder the
Investor Questionnaire and shall use commercially reasonable efforts to cause
each Company Stockholder to complete and return an executed copy of the Investor
Questionnaire prior to the Closing.

     6.11 THIRD PARTY CONSENTS. As soon as practicable following the date
hereof, Parent and the Company will each use all commercially reasonable efforts
to obtain any consents, waivers and approvals under any of its or its
subsidiaries' respective agreements, contracts, licenses or leases required to
be obtained in connection with the consummation of the transactions contemplated
hereby.

     6.12 RIGHTS AGREEMENT; TAKEOVER STATUTES. The Board of Directors of Parent
shall take such action necessary in order to render the Rights inapplicable to
the Merger, and the other

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transactions contemplated by this Agreement. If any anti-takeover, control share
acquisition, fair price, moratorium or other similar statute is or may become
applicable to the Merger or the other transactions contemplated by this
Agreement, each of Parent and Company and their respective Boards of Directors
shall grant such approvals and take such lawful actions as are necessary to
ensure that such transactions may be consummated as promptly as practicable on
the terms contemplated by this Agreement and otherwise act to eliminate or
minimize the effects of such statute and any regulations promulgated thereunder
on such transactions.

     6.13 CERTAIN EMPLOYEE BENEFITS. As soon as practicable after the execution
of this Agreement, the Company and Parent shall confer and work together in good
faith to agree upon mutually acceptable employee benefit and compensation
arrangements (and terminate the Company Employee Plans immediately prior to the
Effective Time if appropriate). In addition, the Company agrees that it and its
subsidiaries shall terminate its and their 401(k) plans and, at the request of
Parent, any other Employee Plans, severance, separation, retention and salary
continuation plans, programs or arrangements, in each case prior to the
Effective Time. Each individual who is employed by the Company immediately prior
to the Effective Time shall remain an employee of the Company following the
Effective Time, provided, however that nothing in this Section 6.13 shall be
construed to limit the ability of the applicable employer to terminate the
employment of any such employee following the Effective Time in accordance with
applicable Legal Requirements. To the extent the applicable plan permits, or can
be amended to permit, Parent shall recognize each such employee's service with,
or recognized by, the Company prior to the Closing Date as service with Parent
or its subsidiary, as applicable, in connection with any pension plan, 401(k)
savings plan and welfare benefit plan (including vacations and holidays)
maintained by Parent or such subsidiary that is made available by Parent , in
its sole discretion, to such employee following the Closing Date and in which
such employee elects to participate for purposes of any waiting period, vesting,
eligibility and benefit entitlements (but excluding benefit accruals other than
vacation) and shall cause all applicable welfare benefit plans to waive any
preexisting condition limitation, exclusion or waiting period for such employees
and their dependents, to the same extent such limitations, exclusions or waiting
periods were satisfied, covered or waived under similar Company Benefit Plans.
Parent shall credit such employees with any amounts paid prior to the Closing
Date under any Company Benefit Plan with respect to satisfaction of any
applicable deductible amounts and co-payment minimums under any Parent plans
established as of the Closing Date which provide similar benefits.

     6.14 TRANSACTION BONUSES; EARN-OUT BONUS.

          (a) TRANSACTION BONUSES. On or before the fifth business day following
the Closing, the Company shall pay, and Parent agrees to cause the Company to
pay, to each person identified on Part 6.14 of the Company Disclosure Schedule
(the "BONUS RECIPIENTS") the Transaction Bonuses specified on such Schedule, net
of appropriate deductions for federal and state withholding taxes, in the
aggregate amount, before deduction for taxes, of $5,064,866. Each such
Transaction Bonus shall consist of fifty percent cash and fifty percent, in the
sole discretion of Parent, in the form of cash or in shares of Parent Common
Stock, which shares shall be valued at $2.80 per share; provided, that in the
event that Parent, in its reasonable judgment, exercised in good faith,
determines that any Bonus Recipient is not an "accredited investor" as to Parent
within the meaning of Rule 501(a) under the Securities Act, or is otherwise
ineligible to

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acquire shares of Parent Common Stock in a private placement pursuant to Rule
506 under the Securities Act (an "INELIGIBLE RECIPIENT"), the Transaction Bonus
payable to such Ineligible Recipient shall be paid entirely in the form of cash;
and further provided that the recipient of any such Parent Common Stock shall,
as a condition to receiving such shares of Parent Common Stock, agree in writing
to be bound by the terms of Sections 6.1 and 6.2 hereof.

          (b) EARN-OUT BONUS. On the Earn-Out Payment Date, the Company shall
pay, and Parent agrees to cause the Company to pay, to the Bonus Recipients
identified on Part 6.14 of the Company Disclosure Schedule an aggregate amount
(the "EARN-OUT BONUS") of up to $2,892,651, as follows:

               (i) If the eStara Revenue is equal to or greater than $25,000,000
     but less than $30,000,000, the aggregate Earn-Out Bonus shall be equal to
     $1,378,530; and

               (ii) If the eStara Revenue is equal to or greater than
     $30,000,000, the aggregate Earn-Out Bonus shall be equal to $2,892,651.

Each Bonus Recipient shall be entitled to receive that percentage of the
aggregate Earn-Out Bonus as is set forth opposite his or her name on Part 6.14
of the Company Disclosure Schedule, net of appropriate deductions for federal
and state withholding taxes. The Earn-Out Bonus may be paid, in the sole
discretion of Parent, in the form of cash or in shares of Parent Common Stock,
the valuation of which is based upon the 20-day volume weighted average price of
the Parent Common Stock for the period ending two days before the Earn-Out
Payment Date, or in a combination thereof. All recipients (other than Ineligible
Recipients) shall receive cash and Parent Common Stock in the same proportion;
provided, that the Earn-Out Bonus payable to any Ineligible Recipient shall be
paid entirely in the form of cash; and provided, further, that in no event shall
Parent elect to pay the Earn-Out Bonus (x) in shares of Parent Common Stock if
that would require that Parent's stockholders would be or would have been
required to approve this transaction under the applicable rules of the Nasdaq
Stock Market, Inc. or other exchange rules or securities laws, unless prior to
the Earn-Out Payment Date, Parent receives such stockholder approval in
compliance with such applicable rules of the Nasdaq Stock Market, Inc. or other
exchange rules or securities laws, or (y) in the form of cash, if such payment
would result in the Merger not qualifying as a reorganization under Section
368(a) of the Code.

          (c) REQUIRED WITHHOLDING; 280G PAYMENTS. Each of Parent, the Initially
Surviving Corporation and the Surviving Corporation shall be entitled to deduct
and withhold from any consideration payable or otherwise deliverable to any
person pursuant to the Transaction Bonuses or the Earn-Out Bonus such amounts as
may be required to be deducted or withheld therefrom under the Code or under any
provision of state, local or foreign tax law or under any other applicable Legal
Requirement. To the extent such amounts are so deducted or withheld, such
amounts shall be treated for all purposes under this Agreement as having been
paid to the person to whom such amounts would otherwise have been paid. Parent
shall first make any such withholding from the cash amount, if any, of any
Transaction Bonus or Earn-Out Bonus, and, to the extent that the cash portion,
if any, of such bonus is insufficient to satisfy the withholding obligation,
such person shall remit (as a condition to receiving such Transaction Bonus or
Earn-Out Bonus), cash in the amount of such remaining withholding obligation.
Notwithstanding anything in this Agreement to the contrary, if the right of any
person identified

                                      -66-

<PAGE>

on Part 6.14 of the Company Disclosure Schedule to receive a payment on account
of a Transaction Bonus or Earn-Out Bonus is submitted to a vote of the
stockholders of the Company for approval under Section 280G of the Code, and the
payment to such person of such Transaction Bonus or Earn-Out Bonus is not
approved by the stockholders and is forfeited as a result thereof, the property
that otherwise would have been payable to such person shall be distributed to
the Company Stockholders on a pro rata basis based on the Common Share
Equivalents outstanding immediately prior to the Effective Time.

                                    ARTICLE 7
                  SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION

     7.1 INDEMNIFICATION BY COMPANY STOCKHOLDERS. Subject to the terms and
conditions of this Article 7, each Company Stockholder hereby agrees (without
any right of contribution from the Company or the Surviving Corporation or any
right of indemnification against the Company or the Surviving Corporation) to
indemnify, defend and hold harmless Parent and each of its Subsidiaries and each
of their respective directors, officers, agents and Affiliates (collectively,
the "PARENT GROUP") from and against any loss, liability, damage, cost or
expense (including costs and reasonable attorneys' fees and disbursements, but
excluding any consequential, special or punitive damages, except when asserted
by a third party in a Third Party Claim) (collectively, "DAMAGES") suffered,
incurred or paid by any member of the Parent Group which arise out of or result
from any or all of the following:

          (a) Any breach or inaccuracy of any representation or warranty made by
the Company in this Agreement or by the Company or any Company Stockholder in
any other Transaction Document;

          (b) Any failure to perform or comply with any covenant, agreement or
obligation of the Company or any Company Stockholder contained in this Agreement
or the Company or any Company Stockholder in any other Transaction Document;

          (c) Any indemnification provided for pursuant to Section 6.5 hereto;

          (d) Any downward adjustment to the Base Merger Consideration based on
the Adjusted Working Capital provided for in Sections 1.7 through 1.9 hereto;
and

          (e) Any claim identified or described in Part 7.1(e) of the Company
Disclosure Schedule.

     For purposes of this Section 7.1, and notwithstanding anything to the
contrary contained herein, the covenants and representations and warranties of
each of the Company Stockholders in the Transmittal Certificates and in this
Agreement are several obligations and the particular Company Stockholder making
those representations, warranties, or covenants will be solely responsible for
Damages that Parent or either Merger Sub may suffer as a result of any breach
thereof by such Company Stockholder, and not for the breach thereof by any other
Company Stockholder.

     7.2 INDEMNIFICATION BY PARENT AND MERGER SUBS. Parent and each Merger Sub,
jointly and severally, shall indemnify and hold harmless the Company
Stockholders, the

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<PAGE>

Stockholders Representative and each of such Company Stockholders' and
Stockholders Representative's respective heirs, executors, administrators,
attorneys, agents and representatives (collectively, "STOCKHOLDERS GROUP") from
and against any and all Damages suffered, incurred or paid by any member of the
Stockholders Group which arise out of or result from any or all of the
following:

               (a) Any breach or inaccuracy of any representation or warranty
made by Parent or either Merger Sub in this Agreement or in any agreement,
schedule, certificate or other document referred to in this Agreement; and

               (b) Any failure to perform or comply with any covenant, agreement
or obligation of Parent or either Merger Sub contained in this Agreement or any
agreement, certificate, document or other instrument referred to in this
Agreement.

     7.3 SURVIVAL OF REPRESENTATIONS. All representations and warranties made by
any party in this Agreement or any certificate or other writing delivered
pursuant hereto shall survive the Closing for a period of one (1) year after the
Closing Date ("SURVIVAL PERIOD") and shall not be deemed waived by any
investigation at any time made by or on behalf of any other party, subject to
the following provisions regarding the Survival Period:

          (a) claims for fraud and any claim relating to title to the Company
Capital Stock or any breach of the representations contained in Sections 2.2,
2.3, 2.4 and 2.8 and any indemnification provided for by Sections 7.1(c) and
7.1(e) shall survive until the end of the applicable statute of limitations
period under applicable law.

          (b) (i) if, at any time prior to the expiration of the Survival
Period, or other expiration date, if applicable, any member of the Parent Group
(acting in good faith) delivers to the Stockholders Representative a written
notice alleging any inaccuracy or misrepresentation in, or breach of, any such
representation or warranty made by the Company or the Company Stockholders, and
asserting a claim ("PARENT CLAIM") for recovery under this Article 7 based on
such alleged inaccuracy or other breach, then the claim asserted in such notice
shall survive the applicable expiration date until such time as such claim is
fully and finally resolved, and (ii) if, at any time prior to the expiration of
the Survival Period, or other expiration date, if applicable, any member of the
Stockholders Group (acting in good faith) delivers to Parent a written notice
alleging any inaccuracy or misrepresentation in, or breach of, any such
representation or warranty made by Parent or either Merger Sub, and asserting a
claim ("STOCKHOLDER CLAIM") for recovery under this Article 7 based on such
alleged inaccuracy or other breach, then the claim asserted in such notice shall
survive the applicable expiration date until such time as such claim is fully
and finally resolved.

     7.4 PROCESS OF INDEMNIFICATION FOR PARENT CLAIMS AND STOCKHOLDER CLAIMS.

          (a) CLAIMS FOR INDEMNIFICATION. Whenever any claim shall arise for
indemnification under this Agreement, the party entitled to indemnification (the
"INDEMNIFIED PARTY") shall promptly notify the party obligated to provide
indemnification (the "INDEMNIFYING PARTY") of the claim and, when known, the
facts constituting the basis for such claim; provided, however, that the failure
to so notify the Indemnifying Party shall not relieve the Indemnifying

                                      -68-

<PAGE>

Party of its obligation hereunder to the extent such failure does not materially
prejudice the Indemnifying Party. In the event of any claim for indemnification
hereunder resulting from or in connection with any claim or legal proceeds by a
third party, the notice to the Indemnifying Party shall specify, if known, the
amount or an estimate of the amount of the liability arising therefrom.

          (b) RECOVERY BY PARENT. If the Stockholders Representative does not
dispute the basis or amount of any Parent Claim within 30 days of receiving
written notice thereof, Parent shall have the right promptly to recover
indemnity as and to the extent provided herein. If the Stockholders
Representative disagrees with the basis of the Parent Claim or the amount of
Damages caused thereby, then within 30 days of receiving written notice thereof,
the Stockholders Representative shall give notice to Parent of such disagreement
and, in that case, Parent shall have no right to recover indemnity hereunder
until such time, if at all, as (a) a court of competent jurisdiction issues a
final, non-appealable order specifying the amount of Parent's recovery, in which
case Parent shall have the right promptly to recover the amount so specified
(subject to the limitations contained in Section 7.3 and Section 7.4(g) hereof)
or (b) Parent and the Stockholders Representative agree in writing to the amount
of Parent's recovery, in which case Parent shall have the right promptly to
recover the amount so agreed.

          (c) RECOVERY BY STOCKHOLDERS. If the Parent does not dispute the basis
or amount of any Stockholder Claim within 30 days of receiving written notice
thereof, Stockholders shall have the right promptly to recover indemnity as and
to the extent provided herein. If Parent disagrees with the basis of the
Stockholder Claim or the amount of Damages caused thereby, then within 30 days
of receiving written notice thereof, Parent shall give notice to the
Stockholders Representative of such disagreement and, in that case, Stockholders
shall have no right to recover indemnity hereunder until such time, if at all,
as (a) a court of competent jurisdiction issues a final, non-appealable order
specifying the amount of Stockholders' recovery, in which case Stockholders
shall have the right promptly to recover the amount so specified (subject to the
limitations contained in Section 7.3 and Section 7.4(g) hereof) or (b) Parent
and the Stockholders Representative agree in writing to the amount of
Stockholders' recovery, in which case Stockholders shall have the right promptly
to recover the amount so agreed.

          (d) THIRD-PARTY CLAIMS. Parent agrees to notify the Stockholders
Representative of any Claims asserted by third parties that, in the opinion of
Parent, are reasonably likely to give rise to indemnification of any member of
the Parent Group hereunder ("THIRD-PARTY CLAIMS"). In the event of any Third
Party Claim, the Indemnifying Party shall be entitled: (a) to participate in
such action and (b) to elect, by written notice delivered to the Indemnified
Party within 30 days after the Indemnifying Party's receipt of notice of the
Third Party Claim, to defend, compromise or settle such action, with counsel
reasonably satisfactory to the Indemnified Party. The Indemnified Party shall
cooperate with respect to any such participation, defense, settlement or
compromise. The Indemnified Party shall have the right to employ its own counsel
in any such case, but the fees and expenses of the Indemnified Party's counsel
shall be at the sole expense of the Indemnified Party unless: (i) the
Indemnifying Party shall have authorized in writing employment of such counsel
at the expense of the Indemnifying Party; (ii) the Indemnifying Party shall not
have employed counsel reasonably satisfactory to the Indemnified Party to defend
such action within 30 days after the Indemnifying Party received notice of the
Asserted Liability; (iii) the Indemnified Party shall have reasonably concluded,

                                      -69-

<PAGE>

based upon advice of counsel, that there are defenses available to the
Indemnified Party that are different from or additional to those available to
the Indemnifying Party (in which case the Indemnifying Party shall not have the
right to direct the defense of such action on behalf of the Indemnified Party
with respect to such different defenses); or (iv) representation of such
Indemnified Party by the counsel retained by the Indemnifying Party would be
inappropriate due to actual or potential differing interests between such
Indemnified Party and any other party represented by such counsel in such
proceeding, in any of which events the fees and expenses of one additional
counsel shall be borne by the Indemnifying Party. The Indemnifying Party shall
not settle or compromise any action or consent to the entry of a judgment that:
(a) does not provide for the claimant to give an unconditional release to the
Indemnified Party in respect of the Third Party Claim; (b) involves relief other
than monetary damages; (c) places restrictions or conditions on the operation of
the business of the Indemnified Party or any of its Affiliates; or (d) involves
any finding or admission of liability or of any violation of applicable law. The
Indemnifying Party shall not be liable for any settlement of any claim or action
effected without its written consent; provided that such consent is not
unreasonably withheld. After payment of any claim by the Indemnifying Party, the
Indemnified Party, if requested by the Indemnifying Party, shall assign to the
Indemnifying Party all rights the Indemnified Party may have against any
applicable account debtor or other responsible Person in respect of such claim.
If the Indemnifying Party chooses to defend any Third Party Claim, the
Indemnified Party shall make available to the Indemnifying Party any books,
records or other documents within its control that are necessary or appropriate
for such defense. Any expenses of any Indemnified Party for which
indemnification is available hereunder shall be paid upon written demand
therefor. Notwithstanding the foregoing, if an Indemnified Party determines in
good faith that there is a reasonable probability that an action by a third
party may adversely affect it or its Affiliates other than solely as a result of
monetary damages for which it would be entitled to indemnification under this
Agreement, the Indemnified Party may, by notice to the Indemnifying Party,
assume the exclusive right to defend, compromise, or settle such action, and the
Indemnifying Party will indemnify the Indemnified Party for the costs associated
therewith. The Indemnifying Party will not be bound by any settlement of such an
action effected without its consent (which will not be unreasonably withheld).

          (e) MANNER OF INDEMNIFICATION. All indemnification payments hereunder
shall be effected by payment of Merger Consideration in the amount of the
indemnification liability (in a combination of Parent Common Stock and, if
applicable, cash, in proportion to the number of shares of Parent Common Stock
and cash issued as Merger Consideration pursuant to this Agreement and based on
the value of $2.80 per share in the case of Parent Common Stock, subject to
appropriate adjustment for stock splits, stock dividends, recapitalizations, and
other similar events).

          (f) RECOVERY OF PARENT CLAIMS. Subject to the limitations of Section
7.4(g), if Parent shall be finally determined to be entitled to indemnification
hereunder; Parent shall first seek recovery from the Company Stockholders for
the amount of the related Parent Claim, as determined hereunder, by (x)
recovering from the Company Stockholders shares of Parent Common Stock, and, if
applicable, cash, in accordance with the provisions of Section 7.4(e), such
amounts to be surrendered first out of the Indemnification Escrow (or in the
case of Section 7.1(d), first the Working Capital Escrow, and then if that is
insufficient the Indemnification Escrow), allocated among the Company
Stockholders on a pro rata basis based on the portion of

                                      -70-

<PAGE>

such Indemnification Escrow (and/or Working Capital Escrow) allocated to each of
them as set forth in Schedule II and, if the Indemnification Escrow is not
sufficient to recover payment for the required amount then from other Parent
Stock Consideration, and, if applicable, cash, previously received by the
Principal Stockholders with each Principal Stockholder contributing such
Principal Stockholder's pro rata portion of such Parent Stock Consideration,
and, if applicable, cash, as set forth on Schedule I, and (y) by setting off the
related amount against any Parent obligations to indemnify the Stockholder
Group; and thereafter, in the absence of any outstanding Merger Consideration
(as a result of any prior sale or other disposition by a Principal Stockholder
of the shares of Parent Common Stock constituting the Merger Consideration, it
being understood that the maximum liability of any Company Stockholder under
this Agreement shall be limited to the actual Merger Consideration received by
such Company Stockholder pursuant to the terms of Subsection 7.4(g)) shall be
entitled to recover payment directly from the Principal Stockholders on a
several basis (and in immediately available funds); it being further understood
that the indemnification provided by any Principal Stockholder in respect of the
representations in the Transmittal Certificates and Article 3 and its covenants
in this Agreement, and the indemnification provided by the Specified Holder in
respect of the representations in its Transmittal Certificate and Article 3A,
are several and not joint, such that any indemnity in respect of a breach by
such Principal Stockholder or Specified Holder, as the case may be, may be
recovered only from the escrow property held by the Escrow Agent for the account
of the Principal Stockholder or Specified Holder whose representation was
breached or, to the extent otherwise permitted hereby, from such Principal
Stockholder or Specified Holder.

          (g) THRESHOLD AND LIMITATIONS.

               (i) No Parent Group member shall be entitled to receive any
     indemnification payment with respect to any claim for indemnification under
     this Article 7 ("CLAIMS") until the aggregate Damages for which the Parent
     Group would otherwise be entitled to receive indemnification exceeds
     $350,000 ("THRESHOLD"). Once such aggregate Loss exceeds the Threshold, the
     Parent Group, shall be entitled to indemnification for the aggregate amount
     of all Damages, regardless of the Threshold. Notwithstanding the foregoing,
     Parent shall be entitled to indemnification for all Damages based upon a
     claim of fraud or any breach of the representations contained in Sections
     2.2, 2.3, 2.4, 2.8, 3.3 and 3A.2, and any indemnification provided for by
     Sections 7.1(c), 7.1(d) and 7.1(e) without regard to the Threshold.

               (ii) Except as provided below for Damages based upon a claim of
     fraud or any breach of the representations contained in Sections 2.2, 2.3,
     2.4, 2.8, 3.3 or 3A.2, and any indemnification provided for by Sections
     7.1(c), 7.1(d) and 7.1(e), (A) the aggregate liability of all Company
     Stockholders under this Article 7 (other than pursuant to Section 7.1(d)),
     shall be limited to the value of the Indemnification Escrow, for which
     purpose, any shares of Parent Common Stock deposited in escrow shall be
     valued at $2.80 per share, as subject to adjustment for stock splits, stock
     dividends and the like (the "ESCROW VALUE"), (B) the aggregate liability of
     Parent and the Merger Subs under this Article 7, shall be limited to the
     amount of the Escrow Value, and (C) the liability of any Company
     Stockholder shall be limited to the amount of the Escrow Value originally
     deposited in escrow for his or its account. With respect to any Claim based
     on a claim of fraud, any breach of the representations contained in
     Sections 2.2, 2.3, 2.4, 2.8, 3.3 or

                                      -71-
<PAGE>

     3A.2, and any indemnification provided for by Sections 7.1(c), the
     liability of each Company Stockholder shall be up to the amount of the
     Merger Consideration actually received by such Company Stockholder; with
     respect to any Claim based on the indemnification provided for by Section
     7.1(d), the aggregate liability of the Company Stockholders shall be
     limited to the value of the Indemnification Escrow plus the Working Capital
     Escrow; and with respect to any Claim based on the indemnification provided
     for by Section 7.1(e) the aggregate liability of the Company Stockholders
     shall be limited to the value of the Indemnification Escrow plus $250,000;
     provided, that the indemnification provided by any Principal Stockholder in
     respect of the representations in the Transmittal Certificates and Article
     3 and its covenants in this Agreement, and the indemnification provided by
     the Specified Holder in respect of the representations in its Transmittal
     Certificate and Article 3A, are several and not joint, such that no
     Principal Stockholder or Specified Holder shall be liable in indemnity for
     the breach of any such representation other than those made by such
     Principal Stockholder or the Specified Holder, as the case may be.

               (iii) An indemnifying party shall not be obligated to defend and
     hold harmless an indemnified party or otherwise be liable to such party
     with respect to any claims made by indemnifying party after the expiration
     of the applicable time period as set forth in, and subject to, Section 7.3.

               (iv) In determining the amount of Damages for which any Parent
     Group member is entitled assert a claim for indemnification, the amount of
     any such Damages shall be determined after deducting therefrom the amount
     of any insurance proceeds actually received by Parent or the Company in
     respect of such matter (which recoveries Parent agrees to use and to cause
     the Company to use commercially reasonable efforts to obtain). If an
     indemnification payment is received by a member of the Parent Group
     hereunder, and such person or the Company later receives insurance proceeds
     in respect of the related Damages, Parent shall return to the Company
     Stockholders within 10 days of the receipt of such insurance proceeds (and
     in the same proportion of cash and Parent Stock deposited in the Indemnity
     Escrow), Base Consideration previously distributed to Parent from the
     Indemnity Escrow equal in value (for which purpose any shares of Parent
     Common Stock deposited in escrow shall be valued at $2.80 per share, as
     subject to adjustment for stock splits, stock dividends and the like) to
     the lesser of (A) the actual amount of insurance proceeds and (B) the
     actual amount of the indemnification payment previously paid by the Company
     Stockholders with respect to such Damages. If an Indemnifying Party (as
     defined below) makes any indemnification payment hereunder, such
     Indemnifying Party shall be subrogated, to the extent of such payment, to
     all rights and remedies of the Indemnified Party (as defined below) to any
     third party in connection with the Damages to which such payment relates.

          (h) REMEDIES. The indemnification provisions of this Article 7 are the
sole and exclusive remedy of any party to this Agreement for a breach of any
representation, warranty or covenant contained in, or any obligation arising
under, this Agreement, as modified by the Disclosure Schedule, other than a suit
for specific performance or as otherwise expressly provided in Sections 1.6(c)
or 1.9.

                                      -72-
<PAGE>

                                    ARTICLE 8
                            CONDITIONS TO THE MERGER

     8.1 CONDITIONS TO OBLIGATIONS OF EACH PARTY TO EFFECT THE MERGER. The
respective obligations of each party to this Agreement to effect the Merger
shall be subject to the satisfaction at or prior to the Closing Date of the
following conditions:

          (a) STOCKHOLDER APPROVALS. The Company shall have been obtained the
Required Stockholder vote.

          (b) NO ORDER. No Governmental Entity shall have enacted, issued,
promulgated, enforced or entered any statute, rule, regulation, executive order,
decree, injunction or other order (whether temporary, preliminary or permanent)
which is in effect and which has the effect of making the Merger illegal or
otherwise prohibiting consummation of the Merger.

          (c) NO RESTRAINTS. There shall not be instituted or pending any action
or proceeding by any Governmental Entity (i) seeking to restrain, prohibit or
otherwise interfere with the ownership or operation by Parent or any of its
subsidiaries of all or any portion of the business of the Company or any of its
subsidiaries or of Parent or any of its subsidiaries or to compel Parent or any
of its subsidiaries to dispose of or hold separate all or any portion of the
business or assets of the Company or any of its subsidiaries or of Parent or any
of its subsidiaries, (ii) seeking to impose or confirm limitations on the
ability of Parent or any of its subsidiaries effectively to exercise full rights
of ownership of the shares of Company Common Stock (or shares of stock of the
Surviving Corporation) including the right to vote any such shares on any
matters properly presented to shareholders or (iii) seeking to require
divestiture by Parent or any of its subsidiaries of any such shares.

          (d) ANTITRUST FILINGS. If applicable, all waiting periods (and any
extensions thereof) applicable to any Antitrust Filings relating to the
transactions contemplated hereby shall have expired or been terminated.

     8.2 ADDITIONAL CONDITIONS TO OBLIGATIONS OF THE COMPANY. The obligation of
the Company to consummate and effect the Merger shall be subject to the
satisfaction at or prior to the Closing Date of each of the following
conditions, any of which may be waived, in writing, exclusively by the Company:

          (a) REPRESENTATIONS AND WARRANTIES. Each representation and warranty
of Parent and the Merger Subs contained in this Agreement (i) shall have been
true and correct as of the date of this Agreement and (ii) shall be true and
correct on and as of the Closing Date with the same force and effect as if made
on the Closing Date except, in each case, or in the aggregate, as does not
constitute a Parent Material Adverse Effect as of the Closing Date or a material
adverse effect on the ability of the parties to consummate the transactions
contemplated by this Agreement.

          (b) AGREEMENTS AND COVENANTS. Parent and each Merger Sub shall have
performed or complied in all material respects with all agreements and covenants
required by this Agreement to be performed or complied with by them on or prior
to the Closing Date, and

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<PAGE>

the Company shall have received a certificate to such effect signed on behalf of
Parent by an authorized officer of Parent.

          (c) LEGAL OPINION. The Company shall have received an opinion from
Foley Hoag LLP, counsel to Parent, in substantially the form attached as Exhibit
E.

          (d) MATERIAL ADVERSE EFFECT. No Parent Material Adverse Effect shall
have occurred since the date of this Agreement and be continuing.

          (e) ESCROW AGREEMENT. Parent and the Escrow Agent shall have executed
and delivered the Escrow Agreement.

     8.3 ADDITIONAL CONDITIONS TO THE OBLIGATIONS OF PARENT AND MERGER SUB 1.
The obligations of Parent and Merger Sub 1 to consummate and effect the Merger
shall be subject to the satisfaction at or prior to the Closing Date of each of
the following conditions, any of which may be waived, in writing, exclusively by
Parent:

          (a) REPRESENTATIONS AND WARRANTIES. Each representation and warranty
of the Company contained in this Agreement (i) shall have been true and correct
as of the date of this Agreement and (ii) shall be true and correct on and as of
the Closing Date with the same force and effect as if made on and as of the
Closing Date except in each case, or in the aggregate, as does not constitute a
Company Material Adverse Effect as of the Closing Date; or a material adverse
effect on the ability of the parties to consummate the transactions contemplated
by this Agreement. Parent shall have received a certificate with respect to the
foregoing signed on behalf of the Company by the Chief Executive Officer of the
Company.

          (b) AGREEMENTS AND COVENANTS. The Company shall have performed or
complied in all material respects with all agreements and covenants required by
this Agreement to be performed or complied with by it at or prior to the Closing
Date, and Parent shall have received a certificate to such effect signed on
behalf of the Company by the Chief Executive Officer of the Company.

          (c) LEGAL OPINION. Parent shall have received and opinion from DLA
Piper US LLP, counsel to the Company, in substantially the form attached as
Exhibit F.

          (d) MATERIAL ADVERSE EFFECT. No Company Material Adverse Effect shall
have occurred since the date of this Agreement and be continuing.

          (e) CONSENTS. (i) All required approvals or consents of any
Governmental Entity or other person in connection with the Merger, including,
without limitation, that of each person and entity identified on Part 8.3(e) of
the Parent Disclosure Schedule, and the consummation of the other transactions
contemplated hereby shall have been obtained (and all relevant statutory,
regulatory or other governmental waiting periods, shall have expired) and (ii)
all such approvals and consents which have been obtained shall be on terms that
are not reasonably likely, directly or indirectly, to result in a Parent
Material Adverse Effect or Company Material Adverse Effect, considered as
separate entities.

                                      -74-

<PAGE>

          (f) DISSENTERS' RIGHTS. As of the Closing Date, the aggregate number
of Dissenting Shares shall not exceed five percent (5%) of the number of issued
and outstanding shares of Company Capital Stock (on an as converted to common
stock basis).

          (g) ESCROW AGREEMENT. The Stockholder Representative and the Escrow
Agent shall have executed and delivered the Escrow Agreement.

          (h) CONSIDERATION DUE TO INELIGIBLE STOCKHOLDERS. The portion of the
Merger Consideration that the Ineligible Stockholders shall be entitled to
receive, in aggregate, as determined in accordance with Section 1.6(b)(xi),
shall not exceed $3,000,000.

          (i) TAX CERTIFICATE. The Target Company shall have delivered to Parent
a certificate that meets the requirements of Sections 1.1445-2(c)(3) and
1.897-2(h) of the Treasury Regulations, certifying that the Company is not and
has not been a United States real property holding corporation (as defined in
Section 897(c)(2) of the Code) during the applicable period specified in Section
897(c)(1)(A)(ii) of the Code.

          (j) EMPLOYMENT AGREEMENTS. Each of the employees of the Company who
executed, contemporaneously with the execution and delivery of this Agreement,
an offer letter from Parent setting forth the terms of his continued employment
by the Company following the Closing (each a "KEY EMPLOYEE") shall remain
employed by the Company and no such Key Employee shall have notified Parent or
the Company of his or her intention to terminate such employment.

          (k) SCHEDULE II. The Company shall have delivered to Parent an updated
Schedule II as of the Effective Time, subject to Parent's reasonable
satisfaction.

                                    ARTICLE 9
                        TERMINATION, AMENDMENT AND WAIVER

     9.1 TERMINATION. This Agreement may be terminated at any time prior to the
Effective Time, whether before or after the Required Stockholder Vote for the
adoption and approval of this Agreement and the Merger has been obtained:

          (a) by mutual written consent duly authorized by the Boards of
Directors of Parent and the Company;

          (b) by either the Company or Parent if the Merger shall not have been
consummated by November 30, 2006 for any reason; provided, however, that the
right to terminate this Agreement under this Section 9.1(b) shall not be
available to any party whose action or failure to act has been a principal cause
of or resulted in the failure of the Merger to occur on or before such date and
such action or failure to act constitutes a breach of this Agreement;

          (c) by either the Company or Parent if a Governmental Entity shall
have issued an order, decree or ruling or taken any other action, in any case
having the effect of permanently restraining, enjoining or otherwise prohibiting
the Merger, which order, decree, ruling or other action is final and
nonappealable;

                                      -75-

<PAGE>

          (d) by the Company, upon a breach of any representation, warranty,
covenant or agreement on the part of Parent set forth in this Agreement, or if
any representation or warranty of Parent shall have become untrue, in either
case such that the conditions set forth in Section 8.2(a) or Section 8.2(b)
would not be satisfied, provided that if such inaccuracy in Parent's
representations and warranties or breach by Parent is curable by Parent, then
the Company may not terminate this Agreement under this Section 9.1(d) for 30
days after delivery of written notice from the Company to Parent of such breach
and intent to terminate, provided Parent continues to exercise commercially
reasonable efforts to cure such breach (it being understood that the Company may
not terminate this Agreement pursuant to this paragraph (d) if such breach by
Parent is cured during such 30-day period, or if the Company shall have
materially breached this Agreement); or

          (e) by Parent, upon a breach of any representation, warranty, covenant
or agreement on the part of the Company set forth in this Agreement, or if any
representation or warranty of the Company shall have become untrue, in either
case such that the conditions set forth in Section 8.3(a) or Section 8.3(b)
would not be satisfied, provided that if such inaccuracy in the Company's
representations and warranties or breach by the Company is curable by the
Company, then Parent may not terminate this Agreement under this Section 9.1(e)
for 30 days after delivery of written notice from Parent to the Company of such
breach, and intent to terminate, provided the Company continues to exercise
commercially reasonable efforts to cure such breach (it being understood that
Parent may not terminate this Agreement pursuant to this paragraph (e) if such
breach by the Company is cured during such 30-day period, or if Parent shall
have materially breached this Agreement).

     9.2 NOTICE OF TERMINATION; EFFECT OF TERMINATION. Any proper termination of
this Agreement under Section 9.1 will be effective immediately upon the delivery
of written notice of the terminating party to the other parties hereto. In the
event of the termination of this Agreement as provided in Section 9.1, this
Agreement shall be of no further force or effect, and all further obligations of
the parties shall terminate without further liability of any such party, except
(i) as set forth in this Section 9.2, Section 9.3 and Article 10, each of which
shall survive the termination of this Agreement, and (ii) nothing herein shall
relieve any party from liability for any willful breach of this Agreement. No
termination of this Agreement shall affect the obligations of the parties
contained in the Confidentiality Agreement, all of which obligations shall
survive termination of this Agreement in accordance with their terms.

     9.3 FEES AND EXPENSES.

          (a) Except as set forth in Section 6.1 and in this Section 9.3, all
fees and expenses incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by the party incurring such
expenses whether or not the Merger is consummated; provided, however, that
Parent and Company shall share equally the applicable filing fees associated
with the Antitrust Filings, if any.

          (b) In the event that this Agreement is terminated by the Company or
Parent, as applicable, pursuant to Sections 9.1(d) or 9.1(e), respectively, then
the terminating party shall be entitled to reimbursement from the breaching
party of its reasonable fees and expenses in connection with the negotiation and
execution of this Agreement and the transactions

                                      -76-

<PAGE>

contemplated hereby (including, without limitation, Parent's due diligence
investigation of the Company).

          (c) Each of Parent and the Company acknowledges that the agreements
contained in this Section 9.3 are an integral part of the transactions
contemplated by this Agreement, and that, without these agreements, neither
Parent nor the Company would enter into this Agreement. Accordingly, if Parent
or the Company fails to pay in a timely manner amounts due pursuant to Section
9.3(b), and, in order to obtain such payment, Parent or the Company makes a
claim for such amounts that results in a judgment against the other for the
amounts described in Section 9.3(b), the judgment debtor shall pay to judgment
creditor its reasonable costs and expenses (including reasonable attorneys' fees
and expenses as provided in Section 10.6(b)) in connection with such suit,
together with interest on the amounts described in Section 9.3(b) (at the prime
rate of Bank of America, N.A. in effect on the date such payment was required to
be made) from such date until the payment of such amount (together with such
accrued interest). Payment of the fees described in Section 9.3(b) shall not be
in lieu of damages incurred in the event of breach of this Agreement.

     9.4 AMENDMENT. Subject to applicable law, this Agreement may be amended by
the parties hereto at any time by execution of an instrument in writing signed
on behalf of each of Parent, the Company and the Stockholder Representative.

     9.5 EXTENSION; WAIVER. At any time prior to the Effective Time any party
hereto may, to the extent legally allowed, (i) extend the time for the
performance of any of the obligations or other acts of the other parties hereto,
(ii) waive any inaccuracies in the representations and warranties made to such
party contained herein or in any document delivered pursuant hereto and (iii)
waive compliance with any of the agreements or conditions for the benefit of
such party contained herein. Any agreement on the part of a party hereto to any
such extension or waiver shall be valid only if set forth in an instrument in
writing signed on behalf of such party. Delay in exercising any right under this
Agreement shall not constitute a waiver of such right.

                                   ARTICLE 10
                               GENERAL PROVISIONS

     10.1 NOTICES. All notices and other communications hereunder shall be in
writing and shall be deemed given upon delivery either personally or by
commercial delivery service, or sent via facsimile (receipt confirmed) to the
parties at the following addresses or facsimile numbers (or at such other
address or facsimile numbers for a party as shall be specified by like notice):

          (a) if to Parent or either Merger Sub, to:

              Art Technology Group, Inc.
              One Main Street
              Cambridge, MA 02142
              Facsimile: (617) 386-1142
              Attention: Chief Executive Officer

              with a copy to:

                                      -77-

<PAGE>

              Foley Hoag LLP
              Seaport World Trade Center West
              155 Seaport Boulevard
              Boston, Massachusetts 02210
              Facsimile: (617) 832-7000
              Attention: John D. Patterson, Jr. and
                         Robert W. Sweet, Jr.

          (b) if to Company, to:

              eStara, Inc.
              1821 Michael Faraday Drive
              Suite 100
              Reston, VA 20190
              Facsimile: (206) 834-8111
              Attention: Chief Executive Officer

              with a copy to:

              DLA Piper US LLP
              1200 Nineteenth Street, NW
              Washington, DC, 20036-2412
              Facsimile: (202) 223-2085
              Attention: Anthony H. Rickert

          (c) if to the Stockholder Representative:

              Burton E. McGillivray
              Cloquet Capital Partners
              One Northfield Plaza
              Suite 300
              Northfield, IL 60093
              Facsimile: (847) 441-1885

              with a copy to DLA Piper US LLP at its address set forth above.

     10.2 INTERPRETATION. When a reference is made in this Agreement to
Exhibits, such reference shall be to an Exhibit to this Agreement unless
otherwise indicated. When a reference is made in this Agreement to Sections,
such reference shall be to a Section of this Agreement unless otherwise
indicated. The words "include," "includes" and "including" when used herein
shall be deemed in each case to be followed by the words "without limitation."
The table of contents and headings contained in this Agreement are only for
reference purposes and shall not affect in any way the meaning or interpretation
of this Agreement. When reference is made herein to "the business of" an entity,
such reference shall be deemed to include the business of all direct and
indirect subsidiaries of such entity. Reference to the subsidiaries of an entity
shall be deemed to include all direct and indirect subsidiaries of such entity.
Reference to an agreement

                                      -78-

<PAGE>

herein is to such agreement as amended in accordance with its terms up to the
date hereof. Reference to a statute herein is to such statute, as amended.

     10.3 COUNTERPARTS; FACSIMILE. This Agreement may be executed in
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other party, it being understood that all
parties need not sign the same counterpart. For purposes of this Agreement, a
document (or signature page thereto) signed and transmitted by facsimile
machine, telecopier or electronic mail is to be treated as an original document.
The signature of any party thereon, for purposes hereof, is to be considered as
an original signature, and the document transmitted is to be considered to have
the same binding effect as an original signature on an original document. At the
request of any party, any facsimile, telecopy or scanned document is to be
re-executed in original form by the parties who executed the facsimile, telecopy
or scanned document. No party may raise the use of a facsimile machine,
telecopier or electronic mail or the fact that any signature was transmitted
through the use of a facsimile, telecopier or electronic mail as a defense to
the enforcement of this Agreement or any amendment or other document executed in
compliance with this Agreement.

     10.4 ENTIRE AGREEMENT; THIRD PARTY BENEFICIARIES. This Agreement, its
Exhibits and the documents and instruments and other agreements among the
parties hereto as contemplated by or referred to herein, including the Company
Disclosure Schedule and the Parent Disclosure Schedule (a) constitute the entire
agreement among the parties with respect to the subject matter hereof and
supersede all prior agreements and understandings, both written and oral, among
the parties with respect to the subject matter hereof, it being understood that
the Confidentiality Agreement shall continue in full force and effect until the
Closing and shall survive any termination of this Agreement; and (b) are not
intended to confer upon any other person any rights or remedies hereunder.
Without limiting the generality of the foregoing, the parties hereto acknowledge
that no party hereto makes, and each hereby disclaims, any representations or
warranties, express or implied, by such party other than as expressly set forth
herein or in any other Transaction Documents. Notwithstanding any provision to
the contrary contained in this Agreement, it is agreed and understood that
neither the Small Business Administration ("SBA") nor any employee, agent or
consultant of the SBA shall have any obligation or liability with respect to any
and all matters relating to or arising out of this Agreement.

     10.5 SEVERABILITY. In the event that any provision of this Agreement or the
application thereof becomes or is declared by a court of competent jurisdiction
to be illegal, void or unenforceable, the remainder of this Agreement will
continue in full force and effect and the application of such provision to other
persons or circumstances will be interpreted so as reasonably to effect the
intent of the parties hereto. The parties further agree to replace such void or
unenforceable provision of this Agreement with a valid and enforceable provision
that will achieve, to the extent possible, the economic, business and other
purposes of such void or unenforceable provision.

     10.6 OTHER REMEDIES; SPECIFIC PERFORMANCE; FEES.

                                      -79-

<PAGE>

          (a) Except as otherwise provided herein, any and all remedies herein
expressly conferred upon a party will be deemed cumulative with and not
exclusive of any other remedy conferred hereby, or by law or equity upon such
party, and the exercise by a party of any one remedy will not preclude the
exercise of any other remedy. The parties hereto agree that irreparable damage
would occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached. It
is accordingly agreed that the parties shall be entitled to seek an injunction
or injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions hereof in any court of the United States or any state
having jurisdiction, this being in addition to any other remedy to which they
are entitled at law or in equity.

          (b) If any action, suit or other proceeding (whether at law, in equity
or otherwise) is instituted concerning or arising out of this Agreement or any
transaction contemplated hereunder, the prevailing party shall recover, in
addition to any other remedy granted to such party therein, all such party's
costs and attorneys fees incurred in connection with the prosecution or defense
of such action, suit or other proceeding.

     10.7 GOVERNING LAW. The Merger shall be governed by and construed in
accordance with the laws of the State of Maryland. Other than the Merger, this
Agreement shall be governed by and construed in accordance with the laws of the
State of Delaware, regardless of the laws that might otherwise govern under
applicable principles of conflicts of law thereof.

     10.8 RULES OF CONSTRUCTION. The parties hereto agree that they have been
represented by counsel during the negotiation and execution of this Agreement
and, therefore, waive the application of any law, regulation, holding or rule of
construction providing that ambiguities in an agreement or other document will
be construed against the party drafting such agreement or document.

     10.9 ASSIGNMENT. No party may assign either this Agreement or any of its
rights, interests, or obligations hereunder without the prior written consent of
the other parties hereto. Subject to the preceding sentence, this Agreement
shall be binding upon and shall inure to the benefit of the parties hereto and
their respective successors and permitted assigns. Any purported assignment in
violation of this Section 10.9 shall be void.

     10.10 WAIVER OF JURY TRIAL. EACH OF PARENT, THE COMPANY AND EACH MERGER SUB
HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT,
PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE)
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE ACTIONS OF PARENT, THE
COMPANY OR EITHER MERGER SUB IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND
ENFORCEMENT HEREOF.

                                    * * * * *

                                      -80-

<PAGE>

     IN WITNESS WHEREOF, the parties have caused this Agreement and Plan of
Merger to be executed by their duly authorized respective officers as of the
date first written above.

                                        ART TECHNOLOGY GROUP, INC.

                                        /s/ Robert D. Burke
                                        ----------------------------------------
                                        By: Robert D. Burke
                                        Title: President and Chief Executive
                                               Officer

                                        ARLINGTON ACQUISITION CORP.

                                        /s/ Robert D. Burke
                                        ----------------------------------------
                                        By: Robert D. Burke
                                        Title: President and Chief Executive
                                               Officer

                                        STORROW ACQUISITION CORP.

                                        /s/ Robert D. Burke
                                        ----------------------------------------
                                        By: Robert D. Burke
                                        Title: President and Chief Executive
                                               Officer

                                        ESTARA, INC.

                                        /s/ John Federman
                                        ----------------------------------------
                                        By: John Federman
                                        Title: Chief Executive Officer

                                        STOCKHOLDER REPRESENTATIVE

                                        /s/ Burton McGillivray
                                        ----------------------------------------
                                        Burton McGillivray

                [Signature Page to Agreement and Plan of Merger]

<PAGE>

                                        PRINCIPAL STOCKHOLDERS

                                        TRINITY SBIC, L.P.

                                        By: THE UNITED STATES SMALL BUSINESS
                                            ADMINISTRATION, as Receiver

                                        By: /s/ Thomas G. Morris
                                            ------------------------------------
                                        Name: Thomas G. Morris
                                        Title: Director, Office of SBIC Liq

                [Signature Page to Agreement and Plan of Merger]

<PAGE>

                                        PRINCIPAL STOCKHOLDERS

                                        CLOQUET CAPITAL PARTNERS, LLC

                                        By: /s/ Burton E. McGillivray
                                            ------------------------------------
                                        Name: Burton E. McGillivray
                                        Title: President

                [Signature Page to Agreement and Plan of Merger]

<PAGE>

                                        PRINCIPAL STOCKHOLDERS

                                        NATELLI COMMUNITIES, LP

                                        By: Natelli Communities, Inc.
                                        Its: General Partner

                                        By: /s/ Thomas A. Natelli
                                            ------------------------------------
                                        Name: Thomas A. Natelli
                                        Title: President

                [Signature Page to Agreement and Plan of Merger]

<PAGE>

                                        PRINCIPAL STOCKHOLDERS

                                        /s/ Thomas A. Natelli
                                        ----------------------------------------
                                        Thomas A. Natelli

                [Signature Page to Agreement and Plan of Merger]

<PAGE>

                                        PRINCIPAL STOCKHOLDERS

                                        /s/ John Federman
                                        ----------------------------------------
                                        John Federman

                [Signature Page to Agreement and Plan of Merger]

<PAGE>

                                LIST OF EXHIBITS

Exhibit A   Form of Voting Agreement

Exhibit B   Escrow Agreement

Exhibit C   Transmittal Certificate

Exhibit D   Investor Questionnaire

Exhibit E   Parent Legal Opinion

Exhibit F   Company Legal Opinionexv4w1

 

Exhibit 4.1

 

Treehouse Foods, Inc.

$100,000,000

6.03% Senior Notes due September 30, 2013

 

Note Purchase Agreement

 

Dated September 22, 2006

 

 

Table of Contents

	 	 	 	 	 	 	 
	Section	 	Heading	 	Page
	Section 1.
	 	Authorization of Notes	 	 	 1	 
	 
	Section 1.1.
	 	Notes	 	 	1	 
	Section 1.2.
	 	Additional Interest	 	 	1	 
	 
	 	 	 	 	 	 
	Section 2.
	 	Sale and Purchase of Notes	 	 	 2	 
	 
	 	 	 	 	 	 
	Section 3.
	 	Closing	 	 	 2	 
	 
	 	 	 	 	 	 
	Section 4.
	 	Conditions to Closing	 	 	 2	 
	 
	 	 	 	 	 	 
	Section 4.1.
	 	Representations and Warranties	 	 	2	 
	Section 4.2.
	 	Performance; No Default	 	 	2	 
	Section 4.3.
	 	Compliance Certificates	 	 	3	 
	Section 4.4.
	 	Opinions of Counsel	 	 	3	 
	Section 4.5.
	 	Purchase Permitted By Applicable Law, Etc	 	 	3	 
	Section 4.6.
	 	Sale of Other Notes	 	 	3	 
	Section 4.7.
	 	Payment of Special Counsel Fees	 	 	4	 
	Section 4.8.
	 	Private Placement Number	 	 	4	 
	Section 4.9.
	 	Changes in Corporate Structure	 	 	4	 
	Section 4.10.
	 	Funding Instructions	 	 	4	 
	Section 4.11.
	 	Subsidiary Guarantee	 	 	4	 
	Section 4.12.
	 	Proceedings and Documents	 	 	4	 
	 
	 	 	 	 	 	 
	Section 5.
	 	Representations and Warranties of the Company	 	 	 4	 
	 
	 	 	 	 	 	 
	Section 5.1.
	 	Organization; Power and Authority	 	 	4	 
	Section 5.2.
	 	Authorization, Etc	 	 	5	 
	Section 5.3.
	 	Disclosure	 	 	5	 
	Section 5.4.
	 	Organization and Ownership of Shares of Subsidiaries; Affiliates	 	 	5	 
	Section 5.5.
	 	Financial Statements; Material Liabilities	 	 	6	 
	Section 5.6.
	 	Compliance with Laws, Other Instruments, Etc	 	 	6	 
	Section 5.7.
	 	Governmental Authorizations, Etc	 	 	6	 
	Section 5.8.
	 	Litigation; Observance of Agreements, Statutes and Orders	 	 	7	 
	Section 5.9.
	 	Taxes	 	 	7	 
	Section 5.10.
	 	Title to Property; Leases	 	 	7	 
	Section 5.11.
	 	Licenses, Permits, Etc	 	 	7	 
	Section 5.12.
	 	Compliance with ERISA	 	 	8	 
	Section 5.13.
	 	Private Offering by the Company	 	 	9	 
	Section 5.14.
	 	Use of Proceeds; Margin Regulations	 	 	9	 
	Section 5.15.
	 	Existing Indebtedness; Future Liens	 	 	9	 

 

	 	 	 	 	 	 	 
	Section	 	Heading	 	Page
	Section 5.16.
	 	Foreign Assets Control Regulations, Etc	 	 	10	 
	Section 5.17.
	 	Status under Certain Statutes	 	 	10	 
	Section 5.18.
	 	Environmental Matters	 	 	10	 
	 
	 	 	 	 	 	 
	Section 6.
	 	Representations of the Purchasers	 	 	11	 
	 
	 	 	 	 	 	 
	Section 6.1.
	 	Purchase for Investment	 	 	11	 
	Section 6.2.
	 	Source of Funds	 	 	11	 
	 
	 	 	 	 	 	 
	Section 7.
	 	Information as to Company	 	 	13	 
	 
	 	 	 	 	 	 
	Section 7.1.
	 	Financial and Business Information	 	 	13	 
	Section 7.2.
	 	Officer’s Certificate	 	 	15	 
	Section 7.3.
	 	Visitation	 	 	16	 
	 
	 	 	 	 	 	 
	Section 8.
	 	Payment and Prepayment of the Notes	 	 	16	 
	 
	 	 	 	 	 	 
	Section 8.1.
	 	Maturity	 	 	16	 
	Section 8.2.
	 	Optional Prepayments with Make-Whole Amount	 	 	17	 
	Section 8.3.
	 	Allocation of Partial Prepayments	 	 	17	 
	Section 8.4.
	 	Maturity; Surrender, Etc.	 	 	17	 
	Section 8.5.
	 	Purchase of Notes	 	 	17	 
	Section 8.6.
	 	Make-Whole Amount	 	 	17	 
	Section 8.7.
	 	Prepayments in Connection with a Change of Control	 	 	19	 
	Section 8.8.
	 	Prepayment in Connection with Asset Dispositions	 	 	20	 
	 
	 	 	 	 	 	 
	Section 9.
	 	Affirmative Covenants	 	 	21	 
	 
	 	 	 	 	 	 
	Section 9.1.
	 	Compliance with Law	 	 	21	 
	Section 9.2.
	 	Insurance	 	 	21	 
	Section 9.3.
	 	Maintenance of Properties	 	 	22	 
	Section 9.4.
	 	Payment of Taxes and Claims	 	 	22	 
	Section 9.5.
	 	Corporate Existence, Etc	 	 	22	 
	Section 9.6.
	 	Books and Records	 	 	22	 
	Section 9.7.
	 	Subsidiary Guarantee; Release	 	 	22	 
	 
	 	 	 	 	 	 
	Section 10.
	 	Negative Covenants	 	 	23	 
	 
	 	 	 	 	 	 
	Section 10.1.
	 	Transactions with Affiliates	 	 	23	 
	Section 10.2.
	 	Merger, Consolidation, Etc	 	 	23	 
	Section 10.3.
	 	Line of Business	 	 	24	 
	Section 10.4.
	 	Terrorism Sanctions Regulations	 	 	24	 
	Section 10.5.
	 	Liens	 	 	24	 
	Section 10.6.
	 	Subsidiary Debt Limitation	 	 	26	 
	Section 10.7.
	 	Financial Covenants	 	 	27	 
	Section 10.6.
	 	Sale of Assets	 	 	27	 
	 
	 	 	 	 	 	 
	Section 11.
	 	Events of Default	 	 	28	 

- ii -

 

	 	 	 	 	 	 	 
	Section	 	Heading	 	Page
	Section 12.
	 	Remedies on Default, Etc	 	 	30	 
	 
	 	 	 	 	 	 
	Section 12.1.
	 	Acceleration	 	 	30	 
	Section 12.2.
	 	Other Remedies	 	 	31	 
	Section 12.3.
	 	Rescission	 	 	31	 
	Section 12.4.
	 	No Waivers or Election of Remedies, Expenses, Etc	 	 	31	 
	 
	 	 	 	 	 	 
	Section 13.
	 	Registration; Exchange; Substitution of Notes	 	 	31	 
	 
	 	 	 	 	 	 
	Section 13.1.
	 	Registration of Notes	 	 	31	 
	Section 13.2.
	 	Transfer and Exchange of Notes	 	 	32	 
	Section 13.3.
	 	Replacement of Notes	 	 	32	 
	Section 13.4.
	 	Prohibition on Transfer to a Competitor	 	 	33	 
	 
	 	 	 	 	 	 
	Section 14.
	 	Payments on Notes	 	 	33	 
	 
	Section 14.1.
	 	Place of Payment	 	 	33	 
	Section 14.2.
	 	Home Office Payment	 	 	33	 
	 
	 	 	 	 	 	 
	Section 15.
	 	Expenses, Etc	 	 	34	 
	 
	 	 	 	 	 	 
	Section 15.1.
	 	Transaction Expenses	 	 	34	 
	Section 15.2.
	 	Survival	 	 	34	 
	 
	 	 	 	 	 	 
	Section 16.
	 	Survival of Representations and Warranties; Entire Agreement	 	 	34	 
	 
	 	 	 	 	 	 
	Section 17.
	 	Amendment and Waiver	 	 	34	 
	 
	 	 	 	 	 	 
	Section 17.1.
	 	Requirements	 	 	34	 
	Section 17.2.
	 	Solicitation of Holders of Notes	 	 	35	 
	Section 17.3.
	 	Binding Effect, etc	 	 	35	 
	Section 17.4.
	 	Notes Held by Company, etc	 	 	35	 
	 
	 	 	 	 	 	 
	Section 18.
	 	Notices	 	 	36	 
	 
	 	 	 	 	 	 
	Section 19.
	 	Reproduction of Documents	 	 	36	 
	 
	 	 	 	 	 	 
	Section 20.
	 	Confidential Information	 	 	37	 
	 
	 	 	 	 	 	 
	Section 21.
	 	Substitution of Purchaser	 	 	37	 
	 
	 	 	 	 	 	 
	Section 22.
	 	Miscellaneous	 	 	38	 
	 
	 	 	 	 	 	 
	Section 22.1.
	 	Successors and Assigns	 	 	38	 
	Section 22.2.
	 	Payments Due on Non-Business Days	 	 	38	 
	Section 22.3.
	 	Accounting Terms	 	 	38	 

- iii -

 

	 	 	 	 	 	 	 
	Section	 	Heading	 	Page
	Section 22.4.
	 	Severability	 	 	38	 
	Section 22.5.
	 	Construction, etc	 	 	38	 
	Section 22.6.
	 	Counterparts	 	 	39	 
	Section 22.7.
	 	Governing Law	 	 	39	 
	Section 22.8.
	 	Jurisdiction and Process; Waiver of Jury Trial	 	 	39	 
	 
	 	 	 	 	 	 
	Signature
	 	 	 	 	41	 

- iv -

 

	 	 	 	 	 
	Schedule A

	 	—
	 	Information Relating to Purchasers
	 
	 	 	 	 
	Schedule B

	 	—
	 	Defined Terms
	 
	 	 	 	 
	Schedule 5.3

	 	—
	 	Disclosure Materials
	 
	 	 	 	 
	Schedule 5.4

	 	—
	 	Subsidiaries of the Company and Ownership of Subsidiary Stock, etc.
	 
	 	 	 	 
	Schedule 5.5

	 	—
	 	Financial Statements
	 
	 	 	 	 
	Schedule 5.15

	 	—
	 	Existing Indebtedness
	 
	 	 	 	 
	Exhibit 1

	 	—
	 	Form of 6.03% Senior Note due September 30, 2013
	 
	 	 	 	 
	Exhibit 4.4(a)

	 	—
	 	Form of Opinion of Special Counsel for the Company
	 
	 	 	 	 
	Exhibit 4.4(b)

	 	—
	 	Form of Opinion of Special Counsel for the Purchasers
	 
	 	 	 	 
	Exhibit 9.7

	 	—
	 	Form of Guaranty Agreement
	 
	 	 	 	 

- v -

 

Treehouse Foods, Inc.

Two Westbrook Corporate Center

Suite 1070

Westchester, IL 60154

6.03% Senior Notes due September 30, 2013

September 22, 2006

To Each of the Purchasers Listed in

     Schedule A Hereto:

Ladies and Gentlemen:

     Treehouse Foods, Inc., a Delaware corporation (the “Company”), agrees with each of the
purchasers whose names appear at the end hereof (each, a “Purchaser” and, collectively, the
“Purchasers”) as follows:

Section 1. Authorization of Notes.

     Section 1.1. Notes. The Company will authorize the issue and sale of $100,000,000 aggregate
principal amount of its 6.03% Senior Notes due September 30, 2013 (the “Notes”, such term to
include any such notes issued in substitution therefor pursuant to Section 13). The Notes shall be
substantially in the form set out in Exhibit 1 with such changes therefrom, if any, as may be
approved by the Purchasers and the Company. Certain capitalized and other terms used in this
Agreement are defined in Schedule B; and references to a “Schedule” or an “Exhibit” are, unless
otherwise specified, to a Schedule or an Exhibit attached to this Agreement. The Notes will be
guaranteed by the Guarantors pursuant to the Guaranty Agreement.

     Section 1.2. Additional Interest. If the Leverage Ratio exceeds 3.5 to 1.0 as of the end of
any fiscal quarter of the Company, as evidenced by the financial statements and related Officer’s
Certificate delivered with respect to such fiscal quarter pursuant to Sections 7.1(a) or (b) and
7.2(a), respectively (collectively, the “Company Reports”), then, in addition to all other interest
accruing thereon (and all rights and remedies of the holders in the event the Leverage Ratio
exceeds 4.00 to 1.00), additional interest in the amount of 1.00% per annum (the “Additional
Interest”) shall accrue on the Notes, commencing on (and retroactive to) the first day of the
fiscal quarter immediately following the fiscal quarter in respect of which such Company Reports
were delivered and continuing until the Company has delivered its Company Reports demonstrating
that, as of the end of the fiscal quarter in respect of which such Company Reports were delivered,
the Leverage Ratio did not exceed 3.5 to 1.0. Following delivery of the Company Reports
demonstrating that
the Leverage Ratio did not exceed 3.5 to 1.0, the Additional Interest shall cease to accrue or
be payable on and after the first day of the fiscal

 

	 	 	 
	Treehouse Foods, Inc.

	 	Note Purchase Agreement

quarter
immediately following the fiscal quarter in respect of which such Company Reports were delivered.

Section 2. Sale and Purchase of Notes.

     Subject to the terms and conditions of this Agreement, the Company will issue and sell to each
Purchaser and each Purchaser will purchase from the Company, at the Closing provided for in Section
3, Notes in the principal amount specified opposite such Purchaser’s name in Schedule A at the
purchase price of 100% of the principal amount thereof. The Purchasers’ obligations hereunder are
several and not joint obligations and no Purchaser shall have any liability to any Person for the
performance or non-performance of any obligation by any other Purchaser hereunder.

Section 3. Closing.

     The sale and purchase of the Notes to be purchased by each Purchaser shall occur at the
offices of Chapman and Cutler LLP, 111 West Monroe Street, Chicago, Illinois 60603, at 10:00 a.m.,
Chicago time, at a closing (the “Closing”) on September 22, 2006 or on such other Business Day
thereafter on or prior to September 26, 2006 as may be agreed upon by the Company and the
Purchasers. At the Closing the Company will deliver to each Purchaser the Notes to be purchased by
such Purchaser in the form of a single Note (or such greater number of Notes in denominations of at
least $1,000,000 as such Purchaser may request) dated the date of the Closing and registered in
such Purchaser’s name (or in the name of its nominee), against delivery by such Purchaser to the
Company or its order of immediately available funds in the amount of the purchase price therefor by
wire transfer of immediately available funds for the account of the Company to account number
699285672 at JPMorgan Chase Bank, N.A., ABA #021000021 (Reference: 2006 Senior Notes). If at the
Closing the Company shall fail to tender such Notes to any Purchaser as provided above in this
Section 3, or any of the conditions specified in Section 4 shall not have been fulfilled to such
Purchaser’s satisfaction, such Purchaser shall, at its election, be relieved of all further
obligations under this Agreement, without thereby waiving any rights such Purchaser may have by
reason of such failure or such nonfulfillment.

Section 4. Conditions to Closing.

     Each Purchaser’s obligation to purchase and pay for the Notes to be sold to such Purchaser at
the Closing is subject to the fulfillment to such Purchaser’s satisfaction, prior to or at the
Closing, of the following conditions:

     Section 4.1. Representations and Warranties. The representations and warranties of the
Company in this Agreement
and of the Guarantor in the Guaranty Agreement shall be correct when made and at the time of the
Closing.

     Section 4.2. Performance; No Default. The Company and the Guarantor shall have performed and
complied with all agreements and conditions contained in this Agreement and the

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Guaranty Agreement
required to be performed or complied with by them prior to or at the Closing and after giving
effect to the issue and sale of the Notes (and the application of the proceeds thereof as
contemplated by Section 5.14) no Default or Event of Default shall have occurred and be continuing.
Neither the Company nor any Subsidiary shall have entered into any transaction since the date of
the Memorandum that would have been prohibited by Sections 10.1, 10.2, 10.3, 10.5, 10.6 or 10.8 had
such Sections applied since such date.

     Section 4.3. Compliance Certificates.

     (a) Officer’s Certificate. The Company and the Guarantor shall have delivered to such
Purchaser an Officer’s Certificate, dated the date of the Closing, certifying that the conditions
specified in Sections 4.1, 4.2 and 4.9 have been fulfilled.

     (b) Secretary’s Certificate. The Company and the Guarantor shall have delivered to such
Purchaser a certificate of its Secretary or Assistant Secretary, dated the date of Closing,
certifying as to the resolutions attached thereto and other corporate proceedings relating to the
authorization, execution and delivery of the Notes and this Agreement in the case of the Company
and the Guaranty Agreement in the case of the Guarantor.

     Section 4.4. Opinions of Counsel. Such Purchaser shall have received opinions in form and
substance satisfactory to such Purchaser, dated the date of the Closing (a) from Winston & Strawn
LLP, counsel for the Company and Guarantor, covering the matters set forth in Exhibit 4.4(a) and
covering such other matters incident to the transactions contemplated hereby as such Purchaser or
its counsel may reasonably request (and the Company hereby instructs its counsel to deliver such
opinion to the Purchasers) and (b) from Chapman and Cutler LLP, the Purchasers’ special counsel in
connection with such transactions, substantially in the form set forth in Exhibit 4.4(b) and
covering such other matters incident to such transactions as such Purchaser may reasonably request.

     Section 4.5. Purchase Permitted By Applicable Law, Etc. On the date of the Closing such
Purchaser’s purchase of Notes shall (a) be permitted by the laws and regulations of each
jurisdiction to which such Purchaser is subject, without recourse to provisions (such as section
1405(a)(8) of the New York Insurance Law) permitting limited investments by insurance companies
without restriction as to the character of the particular investment, (b) not violate any
applicable law or regulation (including, without limitation, Regulation T, U or X of the Board of
Governors of the Federal Reserve System) and (c) not subject such Purchaser to any tax, penalty or
liability under or pursuant to any applicable law or regulation, which law or regulation was
not in effect on the date hereof. If requested by such Purchaser, such Purchaser shall have
received an Officer’s Certificate certifying as to such matters of fact as such Purchaser may
reasonably specify to enable such Purchaser to determine whether such purchase is so permitted.

     Section 4.6. Sale of Other Notes. Contemporaneously with the Closing the Company shall sell
to each other Purchaser and each other Purchaser shall purchase the Notes to be purchased by it at
the Closing as specified in Schedule A.

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     Section 4.7. Payment of Special Counsel Fees. Without limiting the provisions of Section
15.1, the Company shall have paid on or before the Closing the reasonable fees, reasonable charges
and reasonable disbursements of the Purchasers’ special counsel referred to in Section 4.4 to the
extent reflected in a statement of such counsel rendered to the Company at least one Business Day
prior to the Closing.

     Section 4.8. Private Placement Number. A Private Placement Number issued by Standard & Poor’s
CUSIP Service Bureau (in cooperation with the SVO) shall have been obtained for the Notes.

     Section 4.9. Changes in Corporate Structure. Neither the Company nor the Guarantor shall have
changed its jurisdiction of incorporation or organization, as applicable, or been a party to any
merger or consolidation or succeeded to all or any substantial part of the liabilities of any other
entity, at any time following the date of the most recent financial statements referred to in
Schedule 5.5.

     Section 4.10. Funding Instructions. At least three Business Days prior to the date of the
Closing, each Purchaser shall have received written instructions signed by a Responsible Officer on
letterhead of the Company confirming the information specified in Section 3 including (i) the name
and address of the transferee bank, (ii) such transferee bank’s ABA number and (iii) the account
name and number into which the purchase price for the Notes is to be deposited.

     Section 4.11. Guaranty Agreement. Such Purchaser shall have received a true and complete copy
of the Guaranty Agreement, duly executed and delivered by the Guarantor identified in Schedule 5.4,
and the Guaranty Agreement shall be in full force and effect.

     Section 4.12. Proceedings and Documents. All corporate and other proceedings in connection
with the transactions contemplated by this Agreement and all documents and instruments incident to
such transactions shall be satisfactory to such Purchaser and its special counsel, and such
Purchaser and its special counsel shall have received all such counterpart originals or certified
or other copies of such documents as such Purchaser or such special counsel may reasonably request.

Section 5. Representations and Warranties of the Company.

          The Company represents and warrants to each Purchaser that:

     Section 5.1. Organization; Power and Authority. The Company is a corporation duly organized,
validly existing and in good standing under the laws of its jurisdiction of incorporation, and is
duly qualified as a foreign corporation and is in good standing in each jurisdiction in which such
qualification is required by law, other than those jurisdictions as to which the failure to be so
qualified or in good standing could not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect. The Company has the corporate power and authority to own or
hold under lease the properties it purports to own or hold under lease, to transact the business it
transacts and proposes to transact, to execute and deliver this Agreement and the Notes and to
perform the provisions hereof and thereof.

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     Section 5.2. Authorization, Etc. This Agreement and the Notes have been duly authorized by
all necessary corporate action on the part of the Company, and this Agreement constitutes, and upon
execution and delivery thereof each Note will constitute, a legal, valid and binding obligation of
the Company enforceable against the Company in accordance with its terms, except as such
enforceability may be limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium
or other similar laws affecting the enforcement of creditors’ rights generally and (ii) general
principles of equity (regardless of whether such enforceability is considered in a proceeding in
equity or at law).

     Section 5.3. Disclosure. The Company, through its agent, J.P. Morgan Securities Inc., has
delivered to each Purchaser a copy of a Private Placement Memorandum, dated August 9, 2006 (the
“Memorandum”), relating to the transactions contemplated hereby. The Memorandum fairly describes,
in all material respects, the general nature of the business and principal properties of the
Company and its Subsidiaries. This Agreement, the Memorandum and the documents, certificates or
other writings delivered to the Purchasers by or on behalf of the Company in connection with the
transactions contemplated hereby and identified in Schedule 5.3, the financial statements listed in
Schedule 5.5, and the Company’s Forms 10-K for the fiscal year ending December 31, 2005 and Forms
10-Q for the fiscal quarters ending March 31, 2006 and June 30, 2006, each heretofore filed with
the SEC and delivered (or deemed delivered in accordance with this Agreement) to the Purchasers
(this Agreement, the Memorandum and such documents, certificates or other writings, such financial
statements and such Forms 10-K and 10-Q, each delivered to each Purchaser prior to August 24, 2006
being referred to, collectively, as the “Disclosure Documents”), taken as a whole, do not contain
any untrue statement of a material fact or omit to state any material fact necessary to make the
statements therein not misleading in light of the circumstances under which they were made. Except
as disclosed in the Disclosure Documents, since December 31, 2005, there has been no change in the
financial condition, operations, business or properties of the Company or any Subsidiary except
changes that individually or in the aggregate could not reasonably be expected to have a Material
Adverse Effect. There is no fact known to the Company that would
reasonably be expected to have a Material Adverse Effect that has not been set forth herein or in
the Disclosure Documents.

     Section 5.4. Organization and Ownership of Shares of Subsidiaries; Affiliates. (a) Schedule
5.4 contains (except as noted therein) complete and correct lists (i) of the Company’s
Subsidiaries, showing, as to each Subsidiary, the correct name thereof, the jurisdiction of its
organization, and the percentage of shares of each class of its capital stock or similar equity
interests outstanding owned by the Company and each other Subsidiary, (ii) of the Company’s
Affiliates, other than Subsidiaries, and (iii) of the Company’s directors and senior officers.

          (b) All of the outstanding shares of capital stock or similar equity interests of each
Subsidiary shown in Schedule 5.4 as being owned by the Company and its Subsidiaries have been
validly issued, are fully paid and nonassessable and are owned by the Company or another Subsidiary
free and clear of any Lien (except as otherwise disclosed in Schedule 5.4).

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          (c) Each Subsidiary identified in Schedule 5.4 is a corporation or other legal entity duly
organized, validly existing and in good standing under the laws of its jurisdiction of
organization, and is duly qualified as a foreign corporation or other legal entity and is in good
standing in each jurisdiction in which such qualification is required by law, other than those
jurisdictions as to which the failure to be so qualified or in good standing could not,
individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. Each
such Subsidiary has the corporate or other power and authority to own or hold under lease the
properties it purports to own or hold under lease and to transact the business it transacts and
proposes to transact.

          (d) No Subsidiary is a party to, or otherwise subject to any legal, regulatory, contractual or
other restriction (other than this Agreement, the agreements listed on Schedule 5.4 and customary
limitations imposed by corporate law or similar statutes) restricting the ability of such
Subsidiary to pay dividends out of profits or make any other similar distributions of profits to
the Company or any of its Subsidiaries that owns outstanding shares of capital stock or similar
equity interests of such Subsidiary.

     Section 5.5. Financial Statements; Material Liabilities. The Company has delivered to each
Purchaser copies of the financial statements of the Company and its Subsidiaries listed on Schedule
5.5. All of said financial statements (including in each case the related schedules and notes)
fairly present in all material respects the consolidated financial position of the Company and its
Subsidiaries as of the respective dates specified in such Schedule and the consolidated results of
their operations and cash flows for the respective periods so specified and have been prepared in
accordance with GAAP consistently applied throughout the periods involved except as set forth in
the notes thereto (subject, in the case of any interim financial statements, to normal year-end
adjustments). The Company and its Subsidiaries do not have any Material liabilities that are not
disclosed on such financial statements or otherwise disclosed in the Disclosure Documents.

     Section 5.6. Compliance with Laws, Other Instruments, Etc. The execution, delivery and
performance by the Company of this Agreement and the Notes will not (i) contravene, result in any
breach of, or constitute a default under, or result in the creation of any Lien in respect of any
property of the Company or any Subsidiary under, any indenture, mortgage, deed of trust, loan,
purchase or credit agreement, lease, corporate charter or by-laws, or any other Material agreement
or instrument to which the Company or any Subsidiary is bound or by which the Company or any
Subsidiary or any of their respective properties may be bound or affected, (ii) conflict with or
result in a breach of any of the terms, conditions or provisions of any order, judgment, decree, or
ruling of any court, arbitrator or Governmental Authority applicable to the Company or any
Subsidiary or (iii) violate any provision of any statute or other rule or regulation of any
Governmental Authority applicable to the Company or any Subsidiary.

     Section 5.7. Governmental Authorizations, Etc. No consent, approval or authorization of, or
registration, filing or declaration with, any Governmental Authority is required in connection with
the execution, delivery or performance by the Company of this Agreement or the Notes.

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     Section 5.8. Litigation; Observance of Agreements, Statutes and Orders. (a) There are no
actions, suits, investigations or proceedings pending or, to the knowledge of the Company,
threatened against or affecting the Company or any Subsidiary or any property of the Company or any
Subsidiary in any court or before any arbitrator of any kind or before or by any Governmental
Authority that, individually or in the aggregate, would reasonably be expected to have a Material
Adverse Effect.

          (b) Neither the Company nor any Subsidiary is in default under any term of any agreement or
instrument to which it is a party or by which it is bound, or any order, judgment, decree or ruling
of any court, arbitrator or Governmental Authority or is in violation of any applicable law,
ordinance, rule or regulation (including without limitation Environmental Laws or the USA Patriot
Act) of any Governmental Authority, which default or violation, individually or in the aggregate,
would reasonably be expected to have a Material Adverse Effect.

     Section 5.9. Taxes. The Company and its Subsidiaries have filed all tax returns that are
required to have been filed in any jurisdiction (other than those tax returns which individually or
in the aggregate are not Material) and have paid all taxes shown to be due and payable on such
returns and all other taxes and assessments levied upon them or their properties, assets, income or
franchises, to the extent such taxes and assessments have become due and payable and before they
have become delinquent, except for any taxes and assessments (i) the amount of which is not
individually or in the aggregate Material or (ii) the amount, applicability or validity of which is
currently being contested in good faith by appropriate proceedings and with respect to which the
Company or a Subsidiary, as the case may be, has established adequate reserves in accordance with
GAAP. The Company knows of no basis for any other tax or assessment that would reasonably be
expected to have a Material Adverse Effect. The charges, accruals and reserves on the books of the
Company and its Subsidiaries in respect of Federal, state or other taxes for all fiscal periods are
adequate. There
are no open or unaudited tax years with respect to Federal income tax liabilities of the Company
and its Subsidiaries.

     Section 5.10. Title to Property; Leases. The Company and its Subsidiaries have good and
sufficient title to their respective properties that individually or in the aggregate are Material,
including all such properties reflected in the most recent audited balance sheet referred to in
Section 5.5 or purported to have been acquired by the Company or any Subsidiary after said date
(except as sold or otherwise disposed of in the ordinary course of business), in each case free and
clear of Liens prohibited by this Agreement. All leases that individually or in the aggregate are
Material are valid and subsisting and are in full force and effect in all material respects.

     Section 5.11. Licenses, Permits, Etc. (a) The Company and its Subsidiaries own or possess all
licenses, permits, franchises, authorizations, patents, copyrights, proprietary software, service
marks, trademarks and trade names, or rights thereto, that individually or in the aggregate are
Material, without known conflict with the rights of others.

          (b) To the best knowledge of the Company, no product of the Company or any of its Subsidiaries
infringes in any material respect any license, permit, franchise, authorization, patent, copyright,
proprietary software, service mark, trademark, trade name or other right owned by any

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other Person,
except for any infringement which could not reasonably be expected to have a Material Adverse
Effect.

          (c) To the best knowledge of the Company, there is no Material violation by any Person of any
right of the Company or any of its Subsidiaries with respect to any patent, copyright, proprietary
software, service mark, trademark, trade name or other right owned or used by the Company or any of
its Subsidiaries, except for violations which could not reasonably be expected to have a Material
Adverse Effect.

     Section 5.12. Compliance with ERISA. (a) The Company and each ERISA Affiliate have operated
and administered each Plan (other than Multiemployer Plans) in compliance with all applicable laws
except for such instances of noncompliance as have not resulted in and could not reasonably be
expected to result in a Material Adverse Effect. Neither the Company nor any ERISA Affiliate has
incurred any liability pursuant to Title I or IV of ERISA or the penalty or excise tax provisions
of the Code relating to employee benefit plans (as defined in section 3 of ERISA), and no event,
transaction or condition has occurred or exists that would reasonably be expected to result in the
incurrence of any such liability by the Company or any ERISA Affiliate, or in the imposition of any
Lien on any of the rights, properties or assets of the Company or any ERISA Affiliate, in either
case pursuant to Title I or IV of ERISA or to such penalty or excise tax provisions or to section
401(a)(29) or 412 of the Code or section 4068 of ERISA, other than such liabilities or Liens as
would not be individually or in the aggregate Material.

          (b) The present value of the aggregate benefit liabilities under each of the Plans (other than
Multiemployer Plans) subject to Title IV of ERISA, determined as of the end of such Plan’s
most recently ended plan year on the basis of the actuarial assumptions specified for funding
purposes in such Plan’s most recent actuarial valuation report, did not exceed the aggregate
current value of the assets of such Plan allocable to such benefit liabilities by more than
$15,000,000 in the aggregate for all Plans. The term “benefit liabilities” has the meaning
specified in section 4001 of ERISA and the terms “current value” and “present value” have the
meaning specified in section 3 of ERISA.

          (c) The Company and its ERISA Affiliates have not incurred withdrawal liabilities (and are not
subject to contingent withdrawal liabilities) under section 4201 or 4204 of ERISA in respect of
Multiemployer Plans that individually or in the aggregate are Material.

          (d) The expected postretirement benefit obligation (determined as of the last day of the
Company’s most recently ended fiscal year in accordance with Financial Accounting Standards Board
Statement No. 106, without regard to liabilities attributable to continuation coverage mandated by
section 4980B of the Code) of the Company and its Subsidiaries is not Material.

          (e) The execution and delivery of this Agreement and the issuance and sale of the Notes
hereunder will not involve any transaction that is subject to the prohibitions of section 406 of
ERISA or in connection with which a tax would be imposed pursuant to section 4975(c)(1)(A)-(D) of
the Code. The representation by the Company to each Purchaser in the first sentence of this
Section 5.12(e) is made in reliance upon and subject to the accuracy of such Purchaser’s

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representation in Section 6.2 as to the sources of the funds used to pay the purchase price of the
Notes to be purchased by such Purchaser.

     Section 5.13. Private Offering by the Company. Neither the Company nor anyone acting on its
behalf has offered the Notes or any similar securities for sale to, or solicited any offer to buy
any of the same from, or otherwise approached or negotiated in respect thereof with, any person
other than the Purchasers and not more than 19 other Institutional Investors, each of which has
been offered the Notes at a private sale for investment. Neither the Company nor anyone acting on
its behalf has taken, or will take, any action that would subject the issuance or sale of the Notes
to the registration requirements of Section 5 of the Securities Act or to the registration
requirements of any securities or blue sky laws of any applicable jurisdiction.

     Section 5.14. Use of Proceeds; Margin Regulations. The Company will apply the proceeds of the
sale of the Notes to refinance existing Indebtedness under its revolving credit facility and for
general corporate purposes. No part of the proceeds from the sale of the Notes hereunder will be
used, directly or indirectly, for the purpose of buying or carrying any margin stock within the
meaning of Regulation U of the Board of Governors of the Federal Reserve System (12 CFR 221), or
for the purpose of buying or carrying or trading in any securities under such circumstances as to
involve the Company in a violation of Regulation X of said Board (12 CFR 224) or to involve any
broker or dealer in a violation of Regulation T of said Board (12 CFR 220). Margin stock does not
constitute more than 1.0% of the value of the consolidated assets of the Company and its
Subsidiaries and the Company does not have any present intention that margin stock will constitute
more than 1.0% of the value of such assets. As used in this Section, the terms
“margin stock” and “purpose of buying or carrying” shall have the meanings assigned to them in said
Regulation U.

     Section 5.15. Existing Indebtedness; Future Liens. (a) Except as described
therein, Schedule 5.15 sets forth a complete and correct list of all outstanding Indebtedness of
the Company and its Subsidiaries as of June 30, 2006 (including a description of the obligors and
obligees, principal amount outstanding and collateral therefor, if any, and Guaranty thereof, if
any), since which date there has been no Material change in the amounts, interest rates, sinking
funds, installment payments or maturities of the Indebtedness of the Company or its Subsidiaries.
Neither the Company nor any Subsidiary is in default and no waiver of default is currently in
effect, in the payment of any principal or interest on any Indebtedness of the Company or such
Subsidiary and no event or condition exists with respect to any Indebtedness of the Company or any
Subsidiary that would permit (or that with notice or the lapse of time, or both, would permit) one
or more Persons to cause such Indebtedness to become due and payable before its stated maturity or
before its regularly scheduled dates of payment.

          (b) Except as disclosed in Schedule 5.15, neither the Company nor any Subsidiary has agreed or
consented to cause or permit in the future (upon the happening of a contingency or otherwise) any
of its property, whether now owned or hereafter acquired, to be subject to a Lien not permitted by
Section 10.5.

          (c) Neither the Company nor any Subsidiary is a party to, or otherwise subject to any
provision contained in, any instrument evidencing Indebtedness of the Company or such

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Subsidiary,
any agreement relating thereto or any other agreement (including, but not limited to, its charter
or other organizational document) which limits the amount of, or otherwise imposes restrictions on
the incurring of, Indebtedness of the Company, except as specifically indicated in Schedule 5.15.

     Section 5.16. Foreign Assets Control Regulations, Etc. (a) Neither the sale of the Notes by
the Company hereunder nor its use of the proceeds thereof will violate the Trading with the Enemy
Act, as amended, or any of the foreign assets control regulations of the United States Treasury
Department (31 CFR, Subtitle B, Chapter V, as amended) or any enabling legislation or executive
order relating thereto.

          (b) Neither the Company nor any Subsidiary (i) is a Person described or designated in the
Specially Designated Nationals and Blocked Persons List of the Office of Foreign Assets Control or
in Section 1 of the Anti-Terrorism Order or (ii) engages in any dealings or transactions with any
such Person. The Company and its Subsidiaries are in compliance, in all material respects, with
the USA Patriot Act.

          (c) No part of the proceeds from the sale of the Notes hereunder will be used, directly or
indirectly, for any payments to any governmental official or employee, political party, official of
a political party, candidate for political office, or anyone else acting in an official capacity,
in order to obtain, retain or direct business or obtain any improper advantage, in violation of the
United States Foreign Corrupt Practices Act of 1977, as amended, assuming in all cases that such
Act applies to the Company.

     Section 5.17. Status under Certain Statutes. Neither the Company nor any Subsidiary is
subject to regulation under the Investment Company Act of 1940, as amended, the Public Utility
Holding Company Act of 2005, as amended, the ICC Termination Act of 1995, as amended, or the
Federal Power Act, as amended.

     Section 5.18. Environmental Matters. (a) Neither the Company nor any Subsidiary has knowledge
of any claim or has received any notice of any claim, and no proceeding has been instituted raising
any claim against the Company or any of its Subsidiaries or any of their respective real properties
now or formerly owned, leased or operated by any of them or other assets, alleging any damage to
the environment or violation of any Environmental Laws, except, in each case, such as could not
reasonably be expected to result in a Material Adverse Effect.

          (b) Neither the Company nor any Subsidiary has knowledge of any facts which would give rise to
any claim, public or private, of violation of Environmental Laws or damage to the environment
emanating from, occurring on or in any way related to real properties now or formerly owned, leased
or operated by any of them or to other assets or their use, except, in each case, such as could not
reasonably be expected to result in a Material Adverse Effect.

          (c) Neither the Company nor any Subsidiary has stored any Hazardous Materials on real
properties now or formerly owned, leased or operated by any of them and has not disposed of any
Hazardous Materials in a manner contrary to any Environmental Laws in each case in any manner that
would reasonably be expected to result in a Material Adverse Effect; and

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          (d) All buildings on all real properties now owned, leased or operated by the Company or any
Subsidiary are in compliance with applicable Environmental Laws, except where failure to comply
could not reasonably be expected to result in a Material Adverse Effect.

Section 6. Representations of the Purchasers.

     Section 6.1. Purchase for Investment. Each Purchaser severally represents that it is
purchasing the Notes for its own account or for one or more separate accounts maintained by such
Purchaser or for the account of one or more pension or trust funds and not with a view to the
distribution thereof, provided that the disposition of such Purchaser’s or their property shall at
all times be within such Purchaser’s or their control. Each Purchaser understands that the Notes
have not been registered under the Securities Act and may be resold only if registered pursuant to
the provisions of the Securities Act or if an exemption from registration is available, except
under circumstances where neither such registration nor such an exemption is required by law, and
that the Company is not required to register the Notes.

     Section 6.2. Source of Funds. Each Purchaser severally represents that at least one of the
following statements is an accurate representation as to each source of funds (a “Source”) to be
used by such Purchaser to pay the purchase price of the Notes to be purchased by such Purchaser
hereunder:

     (a) the Source is an “insurance company general account” (as the term is defined in the
United States Department of Labor’s Prohibited Transaction Exemption (“PTE”) 95-60) in
respect of which the reserves and liabilities (as defined by the annual statement for life
insurance companies approved by the National Association of Insurance Commissioners (the
“NAIC Annual Statement”)) for the general account contract(s) held by or on behalf of any
employee benefit plan together with the amount of the reserves and liabilities for the
general account contract(s) held by or on behalf of any other employee benefit plans
maintained by the same employer (or affiliate thereof as defined in PTE 95-60) or by the
same employee organization in the general account do not exceed 10% of the total reserves
and liabilities of the general account (exclusive of separate account liabilities) plus
surplus as set forth in the NAIC Annual Statement filed with such Purchaser’s state of
domicile; or

     (b) the Source is a separate account that is maintained solely in connection with such
Purchaser’s fixed contractual obligations under which the amounts payable, or credited, to
any employee benefit plan (or its related trust) that has any interest in such separate
account (or to any participant or beneficiary of such plan (including any annuitant)) are
not affected in any manner by the investment performance of the separate account; or

     (c) the Source is either (i) an insurance company pooled separate account, within the
meaning of PTE 90-1 or (ii) a bank collective investment fund, within the meaning of the PTE
91-38 and, except as disclosed by such Purchaser to the Company in writing pursuant to this
clause (c), no employee benefit plan or group of plans maintained

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by the same employer or
employee organization beneficially owns more than 10% of all assets allocated to such pooled
separate account or collective investment fund; or

     (d) the Source constitutes assets of an “investment fund” (within the meaning of Part V
of PTE 84-14 (the “QPAM Exemption”)) managed by a “qualified professional asset manager” or
“QPAM” (within the meaning of Part V of the QPAM Exemption), no employee benefit plan’s
assets that are included in such investment fund, when combined with the assets of all other
employee benefit plans established or maintained by the same employer or by an affiliate
(within the meaning of Section V(c)(1) of the QPAM Exemption) of such employer or by the
same employee organization and managed by such QPAM, exceed 20% of the total client assets
managed by such QPAM, the conditions of Part I(c) and (g) of the QPAM Exemption are
satisfied, as of the last day of its most recent calendar quarter, the QPAM does not own a
10% or more interest in the Company and no person controlling or controlled by the QPAM
(applying the definition of “control” in Section V(e) of the QPAM Exemption) owns a 20% or
more interest in the Company (or less than 20% but greater than 10%, if such person
exercises control over the management or policies of the Company by reason of
its ownership interest) and (i) the identity of such QPAM and (ii) the names of all employee
benefit plans whose assets are included in such investment fund have been disclosed to the
Company in writing pursuant to this clause (d); or

     (e) the Source constitutes assets of a “plan(s)” (within the meaning of Section IV of
PTE 96-23 (the “INHAM Exemption”)) managed by an “in-house asset manager” or “INHAM” (within
the meaning of Part IV of the INHAM Exemption), the conditions of Part I(a), (g) and (h) of
the INHAM Exemption are satisfied, neither the INHAM nor a person controlling or controlled
by the INHAM (applying the definition of “control” in Section IV(d) of the INHAM Exemption)
owns a 5% or more interest in the Company and (i) the identity of such INHAM and (ii) the
name(s) of the employee benefit plan(s) whose assets constitute the Source have been
disclosed to the Company in writing pursuant to this clause (e); or

     (f) the Source is a governmental plan; or

     (g) the Source is one or more employee benefit plans, or a separate account or trust
fund comprised of one or more employee benefit plans, each of which has been identified to
the Company in writing pursuant to this clause (g); or

     (h) the Source does not include assets of any employee benefit plan, other than a plan
exempt from the coverage of ERISA.

As used in this Section 6.2, the terms “employee benefit plan,” “governmental plan,” and “separate
account” shall have the respective meanings assigned to such terms in section 3 of ERISA.

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	 	Note Purchase Agreement

Section 7. Information as to Company.

     Section 7.1. Financial and Business Information. The Company shall deliver to each holder of
Notes that is an Institutional Investor:

     (a) Quarterly Statements — within 60 days (or such shorter period as is 15 days greater
than the period applicable to the filing of the Company’s Quarterly Report on Form 10-Q (the
“Form 10-Q”) with the SEC regardless of whether the Company is subject to the filing
requirements thereof) after the end of each quarterly fiscal period in each fiscal year of
the Company (other than the last quarterly fiscal period of each such fiscal year),
duplicate copies of,

     (i) a consolidated balance sheet of the Company and its Subsidiaries as at the
end of such quarter, and

     (ii) consolidated statements of income, changes in shareholders’ equity and
cash flows of the Company and its Subsidiaries, for such quarter and (in the
case of the second and third quarters) for the portion of the fiscal year ending
with such quarter,

setting forth in each case in comparative form the figures for the corresponding periods in
the previous fiscal year, all in reasonable detail, prepared in accordance with GAAP
applicable to quarterly financial statements generally, and certified by a Senior Financial
Officer as fairly presenting, in all material respects, the financial position of the
companies being reported on and their results of operations and cash flows, subject to
changes resulting from year-end adjustments, provided that delivery within the time period
specified above of copies of the Company’s Form 10-Q prepared in compliance with the
requirements therefor and filed with the SEC shall be deemed to satisfy the requirements of
this Section 7.1(a), provided, further, that the Company shall be deemed to have made such
delivery of such Form 10-Q if it shall have timely made such Form 10-Q available (x) on
“EDGAR” (or similar service that the Company has confirmed in writing is accessible by each
holder of Notes) and (y) on its home page on the worldwide web (at the date of this
Agreement located at: http//www.treehousefoods.com) (or on another relevant web page that
the Company has confirmed in writing is accessible by each holder of Notes) and shall have
given each Purchaser prior notice (which such notice may be made by electronic mail to any
holder of Notes who has provided to the Company one or more email addresses as set forth in
its Schedule A) of such availability on EDGAR and on its home page (or any similar sources
permitted in the foregoing clauses (x) and (y)) in connection with each delivery (such
availability and notice thereof being referred to as “Electronic Delivery”);

     (b) Annual Statements — within 120 days (or such shorter period as is 15 days greater
than the period applicable to the filing of the Company’s Annual Report on Form 10-K (the
“Form 10-K”) with the SEC regardless of whether the Company is subject to the filing
requirements thereof) after the end of each fiscal year of the Company, duplicate copies of

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	 	Note Purchase Agreement

     (i) a consolidated balance sheet of the Company and its Subsidiaries as at the
end of such year, and

     (ii) consolidated statements of income, changes in shareholders’ equity and
cash flows of the Company and its Subsidiaries for such year,

setting forth in each case in comparative form the figures for the previous fiscal year, all
in reasonable detail, prepared in accordance with GAAP, and accompanied by an opinion
thereon of independent public accountants of recognized national standing, which opinion
shall state that such financial statements present fairly, in all material respects, the
financial position of the companies being reported upon and their results of operations and
cash flows and have been prepared in conformity with GAAP, and that the examination of such
accountants in connection with such financial statements has been made in accordance with
generally accepted auditing standards, and that such audit provides a reasonable basis for
such opinion in the circumstances, provided that the delivery within the time period
specified above of the Company’s Form 10-K for such
fiscal year (together with the Company’s annual report to shareholders, if any, prepared
pursuant to Rule 14a-3 under the Exchange Act) prepared in accordance with the requirements
therefor and filed with the SEC shall be deemed to satisfy the requirements of this Section
7.1(b), provided, further, that the Company shall be deemed to have made such delivery of
such Form 10-K if it shall have timely made Electronic Delivery thereof;

     (c) SEC and Other Reports — except for information delivered in accordance with
Sections 7.1(a) and (b), promptly upon their becoming available, one copy of (i) each
financial statement, report, notice or proxy statement sent by the Company or any Subsidiary
to its principal lending banks as a whole (excluding information sent to such banks in the
ordinary course of administration of a bank facility, such as information relating to
pricing and borrowing availability) or to its public securities holders generally, and (ii)
each regular or periodic report, each registration statement (without exhibits except as
expressly requested by such holder), and each prospectus and all amendments thereto filed by
the Company or any Subsidiary with the SEC and of all press releases and other statements
made available generally by the Company or any Subsidiary to the public concerning
developments that are Material, provided, that the Company shall be deemed to have made
delivery of the documents in this Section 7.1(c) if it shall have timely made Electronic
Delivery thereof;

     (d) Notice of Default or Event of Default — promptly, and in any event within ten
Business Days after a Responsible Officer becomes aware of the existence of any Default or
Event of Default or that any Person has given any notice or taken any action with respect to
a claimed default hereunder or that any Person has given any notice or taken any action with
respect to a claimed default of the type referred to in Section 11(f), a written notice
specifying the nature and period of existence thereof and what action the Company is taking
or proposes to take with respect thereto;

     (e) ERISA Matters — promptly, and in any event within five Business Days after a
Responsible Officer becomes aware of any of the following, a written notice

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setting forth
the nature thereof and the action, if any, that the Company or an ERISA Affiliate proposes
to take with respect thereto:

     (i) with respect to any Plan, any reportable event, as defined in section
4043(c) of ERISA and the regulations thereunder, for which notice thereof has not
been waived pursuant to such regulations as in effect on the date hereof; or

     (ii) the taking by the PBGC of steps to institute, or the threatening by the
PBGC of the institution of, proceedings under section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Plan, or the
receipt by the Company or any ERISA Affiliate of a notice from a Multi-employer Plan
that such action has been taken by the PBGC with respect to such Multi-employer
Plan; or

     (iii) any event, transaction or condition that would result in the incurrence
of any liability by the Company or any ERISA Affiliate pursuant to Title I or IV of
ERISA or the imposition of a penalty or excise tax under the provisions of the Code
relating to employee benefit plans, or in the imposition of any Lien on any of the
rights, properties or assets of the Company or any ERISA Affiliate pursuant to Title
I or IV of ERISA or such penalty or excise tax provisions, if such liability or
Lien, taken together with any other such liabilities or Liens then existing, would
reasonably be expected to have a Material Adverse Effect;

     (f) Notices from Governmental Authority — promptly, and in any event within 30 days of
receipt thereof, copies of any notice to the Company or any Subsidiary from any Federal or
state Governmental Authority relating to any order, ruling, statute or other law or
regulation that would reasonably be expected to have a Material Adverse Effect; and

     (g) Requested Information — with reasonable promptness, such other data and information
relating to the business, operations, affairs, financial condition, assets or properties of
the Company or any of its Subsidiaries (including, but without limitation, actual copies of
the Company’s Form 10-Q and Form 10-K) or relating to the ability of the Company to perform
its obligations hereunder and under the Notes as from time to time may be reasonably
requested by any such holder of Notes.

     Section 7.2. Officer’s Certificate. Each set of financial statements delivered to a holder of
Notes pursuant to Section 7.1(a) or Section 7.1(b) shall be accompanied by a certificate of a
Senior Financial Officer setting forth (which, in the case of Electronic Delivery of any such
financial statements, shall be by separate concurrent delivery of such certificate to each holder
of Notes):

     (a) Covenant Compliance — the information (including detailed calculations) required in
order to establish whether the Company was in compliance with the

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	 	Note Purchase Agreement

requirements of Sections
10.5(k), 10.6(e), 10.7 and 10.8 during the quarterly or annual period covered by the
statements then being furnished (including with respect to each such Section, where
applicable, the calculations of the maximum or minimum amount, ratio or percentage, as the
case may be, permissible under the terms of such Sections, and the calculation of the
amount, ratio or percentage then in existence); and

     (b) Event of Default — a statement that such Senior Financial Officer has reviewed the
relevant terms hereof and has made, or caused to be made, under his or her supervision, a
review of the transactions and conditions of the Company and its Subsidiaries from the
beginning of the quarterly or annual period covered by the statements then being furnished
to the date of the certificate and that such review shall not have disclosed the existence
during such period of any condition or event that constitutes a Default or an Event of
Default or, if any such condition or event existed or exists (including, without limitation,
any such event or condition resulting from the failure of the Company or any Subsidiary to
comply with any Environmental Law),
specifying the nature and period of existence thereof and what action the Company has taken
or proposes to take with respect thereto.

     Section 7.3. Visitation. The Company shall permit the representatives of each holder of Notes
that is an Institutional Investor:

     (a) No Default — if no Default or Event of Default then exists, at the expense of such
holder and upon reasonable prior notice to the Company, to visit the principal executive
office of the Company, to discuss the affairs, finances and accounts of the Company and its
Subsidiaries with the Company’s officers, and (with the consent of the Company, which
consent will not be unreasonably withheld) its independent public accountants, and (with the
consent of the Company, which consent will not be unreasonably withheld) to visit the other
offices and properties of the Company and each Subsidiary, all at such reasonable times
during normal business hours as may be reasonably requested in writing, provided that
visitations pursuant to this paragraph (a) shall be limited to no more than once per
calendar year; and

     (b) Default — if a Default or Event of Default then exists, at the expense of the
Company, to visit and inspect any of the offices or properties of the Company or any
Subsidiary, to examine all their respective books of account, records, reports and other
papers, to make copies and extracts therefrom, and to discuss their respective affairs,
finances and accounts with their respective officers and independent public accountants (and
by this provision the Company authorizes said accountants to discuss the affairs, finances
and accounts of the Company and its Subsidiaries), all at such times during normal business
hours and as often as may be requested.

Section 8. Payment and Prepayment of the Notes.

     Section 8.1. Maturity. As provided therein, the entire unpaid principal balance of the Notes
shall be due and payable on the stated maturity date thereof.

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	 	Note Purchase Agreement

     Section 8.2. Optional Prepayments with Make-Whole Amount. The Company may, at its option,
upon notice as provided below, prepay at any time all, or from time to time any part of, the Notes,
in an amount not less than 5.0% of the aggregate principal amount of the Notes then outstanding in
the case of a partial prepayment, at 100% of the principal amount so prepaid, and the Make-Whole
Amount determined for the prepayment date with respect to such principal amount. The Company will
give each holder of Notes written notice of each optional prepayment under this Section 8.2 not
less than 30 days and not more than 60 days prior to the date fixed for such prepayment. Each such
notice shall specify such date (which shall be a Business Day), the aggregate principal amount of
the Notes to be prepaid on such date, the principal amount of each Note held by such holder to be
prepaid (determined in accordance with Section 8.3), and the interest to be paid on the prepayment
date with respect to such principal amount being prepaid, and shall be accompanied by a certificate
of a Senior Financial Officer as
to the estimated Make-Whole Amount due in connection with such prepayment (calculated as if the
date of such notice were the date of the prepayment), setting forth the details of such
computation. Two Business Days prior to such prepayment, the Company shall deliver to each holder
of Notes a certificate of a Senior Financial Officer specifying the calculation of such Make-Whole
Amount as of the specified prepayment date.

     Section 8.3. Allocation of Partial Prepayments. In the case of each partial prepayment of the
Notes, the principal amount of the Notes to be prepaid shall be allocated among all of the Notes at
the time outstanding in proportion, as nearly as practicable, to the respective unpaid principal
amounts thereof.

     Section 8.4. Maturity; Surrender, Etc. In the case of each prepayment of Notes pursuant to
this Section 8, the principal amount of each Note to be prepaid shall mature and become due and
payable on the date fixed for such prepayment (which shall be a Business Day), together with
interest on such principal amount accrued to such date and the applicable Make-Whole Amount, if
any. From and after such date, unless the Company shall fail to pay such principal amount when so
due and payable, together with the interest and Make-Whole Amount, if any, as aforesaid, interest
on such principal amount shall cease to accrue. Any Note paid or prepaid in full shall be
surrendered to the Company and cancelled and shall not be reissued, and no Note shall be issued in
lieu of any prepaid principal amount of any Note.

     Section 8.5. Purchase of Notes. The Company will not and will not permit any Affiliate to
purchase, redeem, prepay or otherwise acquire, directly or indirectly, any of the outstanding Notes
except upon the payment or prepayment of the Notes in accordance with the terms of this Agreement
and the Notes. The Company will promptly cancel all Notes acquired by it or any Affiliate pursuant
to any payment or prepayment of Notes pursuant to any provision of this Agreement and no Notes may
be issued in substitution or exchange for any such Notes.

     Section 8.6. Make-Whole Amount.

          “Make-Whole Amount” means, with respect to any Note, an amount equal to the excess, if any, of
the Discounted Value of the Remaining Scheduled Payments with respect to the Called Principal of
such Note over the amount of such Called Principal, provided that the

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	 	Note Purchase Agreement

Make-Whole Amount may in no
event be less than zero. For the purposes of determining the Make-Whole Amount, the following
terms have the following meanings:

     “Called Principal” means, with respect to any Note, the principal of such Note that is to be
prepaid pursuant to Section 8.2 or has become or is declared to be immediately due and payable
pursuant to Section 12.1, as the context requires.

     “Discounted Value” means, with respect to the Called Principal of any Note, the amount
obtained by discounting all Remaining Scheduled Payments with respect to such Called Principal
from their respective scheduled due dates to the Settlement Date with respect to such Called
Principal, in accordance with accepted financial practice and at a discount factor (applied on the
same periodic basis as that on which interest on the Notes is payable) equal to the Reinvestment
Yield with respect to such Called Principal.

     “Reinvestment Yield” means, with respect to the Called Principal of any Note, .50% over the
yield to maturity implied by (i) the yields reported as of 10:00 a.m. (New York City time) on the
second Business Day preceding the Settlement Date with respect to such Called Principal, on the
display designated as “Page PX1” (or such other display as may replace Page PX1) on Bloomberg
Financial Markets for the most recently issued actively traded on the run U.S. Treasury securities
having a maturity equal to the Remaining Average Life of such Called Principal as of such
Settlement Date, or (ii) if such yields are not reported as of such time or the yields
reported as of such time are not ascertainable (including by way of interpolation), the Treasury
Constant Maturity Series Yields reported, for the latest day for which such yields have been so
reported as of the second Business Day preceding the Settlement Date with respect to such Called
Principal, in Federal Reserve Statistical Release H.15 (or any comparable successor publication)
for U.S. Treasury securities having a constant maturity equal to the Remaining Average Life of such
Called Principal as of such Settlement Date.

     In the case of each determination under clause (i) or clause (ii), as the case may be, of the
preceding paragraph, such implied yield will be determined, if necessary, by (a) converting U.S.
Treasury bill quotations to bond equivalent yields in accordance with accepted financial practice
and (b) interpolating linearly between (1) the applicable U.S. Treasury security with the maturity
closest to and greater than such Remaining Average Life and (2) the applicable U.S. Treasury
security with the maturity closest to and less than such Remaining Average Life. The Reinvestment
Yield shall be rounded to the number of decimal places as appears in the interest rate of the
applicable Note.

     “Remaining Average Life” means, with respect to any Called Principal, the number of years
(calculated to the nearest one-twelfth year) obtained by dividing (i) such Called Principal into
(ii) the sum of the products obtained by multiplying (a) the principal component of each Remaining
Scheduled Payment with respect to such Called Principal by (b) the number of years (calculated to
the nearest one-twelfth year) that will elapse between the Settlement Date with respect to such
Called Principal and the scheduled due date of such Remaining Scheduled Payment.

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	 	Note Purchase Agreement

          “Remaining Scheduled Payments” means, with respect to the Called Principal of any Note, all
payments of such Called Principal and interest thereon that would be due after the Settlement Date
with respect to such Called Principal if no payment of such Called Principal were made prior to its
scheduled due date, provided that if such Settlement Date is not a date on which interest payments
are due to be made under the terms of the Notes, then the amount of the next succeeding scheduled
interest payment will be reduced by the amount of interest accrued to such Settlement Date and
required to be paid on such Settlement Date pursuant to Section 8.2 or Section 12.1.

          “Settlement Date” means, with respect to the Called Principal of any Note, the date on which
such Called Principal is to be prepaid pursuant to Section 8.2 or has become or is declared to be
immediately due and payable pursuant to Section 12.1, as the context requires.

     Section 8.7. Prepayments in Connection with a Change of Control.

     (a) Notice of Change of Control. The Company will promptly, and in any event within 10
Business Days after the occurrence of any Change of Control, give written notice of such
Change of Control to each holder of Notes unless notice in respect of such Change of Control
shall have been given pursuant to paragraph (b) below. If a Change of Control has occurred,
such notice shall contain and constitute an offer to prepay Notes as described in paragraph
(c) below and shall be accompanied by the certificate described in paragraph (f) below.

     (b) Notice of Proposed Change of Control. If the Company proposes to take any action
that the Company reasonably believes will result in the consummation of a Change of Control,
the Company will at least 15 and not more than 60 days prior to the taking of such action
give written notice thereof to each holder of Notes containing and constituting an offer to
prepay Notes as described in paragraph (c) below, accompanied by the certificate described
in paragraph (f) below, and contemporaneously with such Change of Control, prepay all Notes
required to be prepaid in accordance with this Section 8.7.

     The obligation of the Company to prepay Notes pursuant to the offers made in accordance
with this paragraph (b) and accepted in accordance with paragraph (d) below is subject to
the occurrence of the Change of Control in respect of which such offers and acceptances
shall have been made. In the event that such Change of Control does not occur on the
Proposed Prepayment Date in respect thereof, the prepayment shall be deferred until and
shall be made on the date on which such Change of Control in fact occurs. The Company shall
keep each holder of Notes reasonably and timely informed of (i) any such deferral of the
date of prepayment, (ii) the date on which such Change of Control and the prepayment are
expected to occur, and (iii) any determination by the Company that efforts to effect such
Change of Control have ceased or been abandoned (in which case the offers and acceptances
made pursuant to this Section 8.7 in respect of such Change of Control shall be deemed
rescinded).

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	 	Note Purchase Agreement

     (c) Offer to Prepay Notes. The offer to prepay Notes contemplated by paragraphs (a)
and (b) above shall be an offer to prepay, in accordance with and subject to this Section
8.7, all, but not less than all, the Notes held by each holder of a Note on a date specified
in such offer (the “Proposed Prepayment Date”). If such Proposed Prepayment Date is in
connection with an offer contemplated by paragraph (a) above, such date shall be not less
than 30 days and not more than 60 days after the date of such offer. If such Proposed
Prepayment Date is in connection with an offer contemplated by paragraph (b) above, such
date shall be the date that the Company reasonably believes the Change of Control will be
consummated.

     (d) Acceptance. A holder of Notes may accept the offer to prepay made pursuant to this
Section 8.7 by causing a notice of such acceptance to be delivered to the Company at least
10 days prior to the Proposed Prepayment Date. A failure by a holder of Notes to respond to
an offer to prepay made pursuant to this Section 8.7 shall be deemed to constitute rejection
of such offer by such holder.

     (e) Prepayment. Prepayment of the Notes to be prepaid pursuant to this Section 8.7
shall be at 100% of the principal amount of such Notes together with interest on such Notes
accrued to the date of prepayment, without the payment of any Make-Whole Amount. The
prepayment shall be made on the Proposed Prepayment Date except as provided in the second
paragraph of paragraph (b) above.

     (f) Officer’s Certificate. Each offer to prepay the Notes pursuant to this Section 8.7
shall be accompanied by a certificate, executed by a Senior Financial Officer of the Company
and dated the date of such offer, specifying: (i) the Proposed Prepayment Date; (ii) that
such offer is made pursuant to this Section 8.7; (iii) the principal amount of each Note
offered to be prepaid (which shall be the outstanding principal amount of each Note); (iv)
the interest that would be due on each Note offered to be prepaid, accrued to the Proposed
Prepayment Date; and (v) in reasonable detail, the nature and date or proposed date of the
Change of Control.

     Section 8.8. Prepayment in Connection with Asset Dispositions. In the event of any Debt
Prepayment Application as contemplated by Section 10.8, the Company shall offer (the “Initial 8.8
Offer”) to prepay each outstanding Note in a principal amount which equals the Ratable Portion for
such Note (which offer shall be in writing and shall offer to make such prepayment on a Business
Day which is not less than 30 and not more than 60 days after the date of the notice of offer (the
“Disposition Prepayment Date”)), together with accrued interest thereon to the date of such
prepayment, but without any Make-Whole Amount. Each holder of a Note shall notify the Company of
such holder’s acceptance or rejection of such offer within 15 days of receipt thereof by giving
notice of such acceptance or rejection to the Company, provided, however, that any holder who fails
to so notify the Company within 15 days of receipt of the notice of offer of prepayment shall be
deemed to have rejected such offer. If any holder rejects or is deemed to have rejected such offer
of prepayment in accordance with the preceding sentence (collectively, the “Rejecting Holders”),
then, for the purposes of determining compliance with Section 10.8(c), the Company nevertheless
will be deemed to have made a Debt

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	 	Note Purchase Agreement

Prepayment Application in an amount equal to the Ratable Portion
offered to the Rejecting Holders.

          In the event (i) there are Rejecting Holders and (ii) the Leverage Ratio exceeded 3.0 to 1.0
as of the end of the fiscal quarter immediately preceding the date of the Initial 8.8 Offer, then
the Company shall offer on a pro rata basis (based on the respective principal amounts of Notes
held by each holder receiving the offer pursuant to this sentence) the Ratable Portion previously
offered to such Rejecting Holders (collectively, the “Second Round Offered Amount”) to those
holders of Notes that have accepted the initial offer of prepayment. Such additional offer shall
be made to the accepting holders not less than 10 days before the Disposition Prepayment Date
and each holder receiving such notice shall accept or reject such additional offer within 5
days of receipt thereof by giving notice of such acceptance or rejection to the Company (provided,
that any holder who fails to so notify the Company within 5 days of receipt of the notice of such
additional offer shall be deemed to have rejected such additional offer). The Company shall prepay
on the Disposition Prepayment Date the Ratable Portion of each Note held by the holders who have
accepted such offer in accordance with this Section 8.8, plus the amount of any Second Round
Offered Amount to those holders who have accepted such additional offer in accordance with this
Section 8.8, and, in each case, together with accrued interest thereon to the date of such
prepayment.

          “Ratable Portion” for any Note means, with respect to a Debt Prepayment Application, an amount
equal to the product of (x) the Net Proceeds Amount being applied (or offered to be prepaid in the
case of the Notes) to the payment of Senior Debt multiplied by (y) a fraction the numerator of
which is the outstanding principal amount of such Note and the denominator of which is the
aggregate principal amount of Senior Debt of the Company and its Subsidiaries.

Section 9. Affirmative Covenants.

          The Company covenants that so long as any of the Notes are outstanding:

     Section 9.1. Compliance with Law. Without limiting Section 10.4, the Company will, and will
cause each of its Subsidiaries to, comply with all laws, ordinances or governmental rules or
regulations to which each of them is subject, including, without limitation, ERISA, the USA Patriot
Act and Environmental Laws, and will obtain and maintain in effect all licenses, certificates,
permits, franchises and other governmental authorizations necessary to the ownership of their
respective properties or to the conduct of their respective businesses, in each case to the extent
necessary to ensure that non-compliance with such laws, ordinances or governmental rules or
regulations or failures to obtain or maintain in effect such licenses, certificates, permits,
franchises and other governmental authorizations would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.

     Section 9.2. Insurance. The Company will, and will cause each of its Subsidiaries to,
maintain, with financially sound and reputable insurers, insurance with respect to their respective
properties and businesses against such casualties and contingencies, of such types, on such terms
and in such amounts (including deductibles, co-insurance and self-insurance, if adequate reserves
are maintained with respect thereto) as is customary in the case of entities of established

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reputations engaged in the same or a similar business and similarly situated, except where the
failure to do so would not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.

     Section 9.3. Maintenance of Properties. The Company will, and will cause each of its
Subsidiaries to, maintain and keep, or cause to be maintained and kept, their respective properties
in good repair, working order and condition (other than ordinary wear and tear), so that the
business carried on in
connection therewith may be properly conducted at all times, provided that this Section shall not
prevent the Company or any Subsidiary from discontinuing the operation and the maintenance of any
of its properties if such discontinuance is desirable in the conduct of its business and the
Company has concluded that such discontinuance would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.

     Section 9.4. Payment of Taxes and Claims. The Company will, and will cause each of its
Subsidiaries to, file all tax returns required to be filed in any jurisdiction and to pay and
discharge all taxes shown to be due and payable on such returns and all other taxes, assessments,
governmental charges, or levies imposed on them or any of their properties, assets, income or
franchises, to the extent the same have become due and payable and before they have become
delinquent and all claims for which sums have become due and payable that have or might become a
Lien on properties or assets of the Company or any Subsidiary, provided that neither the Company
nor any Subsidiary need pay any such tax, assessment, charge, levy or claim if (i) the amount,
applicability or validity thereof is contested by the Company or such Subsidiary on a timely basis
in good faith and in appropriate proceedings, and the Company or a Subsidiary has established
adequate reserves therefor in accordance with GAAP on the books of the Company or such Subsidiary
or (ii) the nonpayment of all such taxes, assessments, charges, levies and claims in the aggregate
would not reasonably be expected to have a Material Adverse Effect.

     Section 9.5. Corporate Existence, Etc. Subject to Section 10.2, the Company will at all times
preserve and keep in full force and effect its corporate existence. Subject to Section 10.2, the
Company will at all times preserve and keep in full force and effect the corporate existence of
each of its Subsidiaries (unless merged into the Company or a Wholly-Owned Subsidiary) and all
rights and franchises of the Company and its Subsidiaries unless, in the good faith judgment of the
Company, the termination of or failure to preserve and keep in full force and effect such corporate
existence, right or franchise would not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect.

     Section 9.6. Books and Records. The Company will, and will cause each of its Subsidiaries to,
maintain proper books of record and account in conformity with GAAP and all applicable requirements
of any Governmental Authority having legal or regulatory jurisdiction over the Company or such
Subsidiary, as the case may be.

     Section 9.7. Guaranty Agreement; Release. (a) The Company may at any time and from time to
time cause any Subsidiary which is not then a Guarantor to become a Guarantor by executing and
delivering a Guaranty Joinder Agreement to each holder of Notes and by providing the following to
each holder of a Note:

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          (i) an opinion from legal counsel to such Subsidiary in form and substance
substantially consistent with the opinions to be delivered under Section 4.4 relating to the
Guaranty Agreement entered into on the date of Closing, and

          (ii) certified copies of corporate showings (including, without limitation, closing
certificates) of such Subsidiary which are consistent in scope with the showings delivered
by the Guarantor at Closing.

          (b) Notwithstanding anything in this Agreement or in the Guaranty Agreement to the contrary,
in the event that the Company or any Subsidiary sells the capital stock of a Guarantor such that
the Guarantor ceases to be a Subsidiary, then upon delivery to each holder of the Notes of an
Officer’s Certificate by the Company giving notice thereof, such Guarantor shall be automatically
released from its obligations under the Guaranty Agreement (without the need for the execution or
delivery of any other document by any holder of a Note or any other Person) if, as of the date of
such event, after giving effect to such release, no Default or Event of Default shall have occurred
and be continuing (and a representation and warranty to that effect shall be contained in such
Officer’s Certificate), provided that any Guarantor may also be released from its obligations under
the Guaranty Agreement at any time with prior written consent of each holder of a Note.

Section 10. Negative Covenants.

          The Company covenants that so long as any of the Notes are outstanding:

     Section 10.1. Transactions with Affiliates. The Company will not and will not permit any
Subsidiary to enter into directly or indirectly any Material transaction or Material group of
related transactions (including without limitation the Material purchase, lease, sale or exchange
of properties of any kind or the rendering of any service) with any Affiliate (other than the
Company or another Subsidiary), except in the ordinary course and pursuant to the reasonable
requirements of the Company’s or such Subsidiary’s business and upon fair and reasonable terms no
less favorable to the Company or such Subsidiary than would be obtainable in a comparable
arm’s-length transaction with a Person not an Affiliate.

     Section 10.2. Merger, Consolidation, Etc. The Company will not and will not permit any
Guarantor to consolidate with or merge with any other Person or convey, transfer or lease all or
substantially all of its assets in a single transaction or series of transactions to any Person
unless:

          (a) the successor formed by such consolidation or the survivor of such merger or the
Person that acquires by conveyance, transfer or lease all or substantially all of the assets
of the Company or such Guarantor as an entirety, as the case may be, shall be a solvent
corporation or limited liability company organized and existing under the laws of the United
States or any State thereof (including the District of Columbia), and, if the Company or
such Guarantor is not such corporation or limited liability company, (i) such corporation or
limited liability company shall have executed and delivered to each holder of any Notes its
assumption of the due and punctual performance and observance of each

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covenant and condition
of this Agreement and the Notes in the case of the Company and of the Guaranty Agreement in
the case of any Guarantor and (ii) such corporation or
limited liability company shall have caused to be delivered to each holder of any Notes an
opinion of nationally recognized independent counsel, or other independent counsel
reasonably satisfactory to the Required Holders, to the effect that all agreements or
instruments effecting such assumption are enforceable in accordance with their terms and
comply with the terms hereof; and

          (b) immediately before and immediately after giving effect to such transaction, no
Default or Event of Default shall have occurred and be continuing, it being agreed that for
purposes of determining compliance with Section 10.7(a) and (c), such transaction shall be
treated on a Pro Forma Basis for the relevant period as having been consummated as of the
last day of the immediately preceding fiscal quarter.

No such conveyance, transfer or lease of substantially all of the assets of the Company or such
Guarantor shall have the effect of releasing the Company or such Guarantor or any successor
corporation or limited liability company that shall theretofore have become such in the manner
prescribed in this Section 10.2 from its liability under this Agreement or the Notes or the
Guaranty Agreement as the case may be.

     Section 10.3. Line of Business. The Company will not and will not permit any Subsidiary to
engage in any business if, as a result, the general nature of the business in which the Company and
its Subsidiaries, taken as a whole, would then be engaged would be substantially changed from the
general nature of the business in which the Company and its Subsidiaries, taken as a whole, are
engaged on the date of this Agreement as described in the Memorandum; provided, that the foregoing
shall not be deemed to prohibit Acquisitions by the Company or its Subsidiaries as long as the
acquired Persons are consumer products companies or other companies operating in businesses similar
to or related to the current businesses conducted by the Company and its Subsidiaries, as well as
suppliers to or distributors of products similar to those of the Company and its Subsidiaries.

     Section 10.4. Terrorism Sanctions Regulations. The Company will not and will not permit any
Subsidiary to (a) become a Person described or designated in the Specially Designated Nationals and
Blocked Persons List of the Office of Foreign Assets Control or in Section 1 of the Anti-Terrorism
Order or (b) engage in any dealings or transactions with any such Person.

     Section 10.5. Liens. The Company will not, and will not permit any of its Subsidiaries to,
directly or indirectly create, incur, assume or permit to exist (upon the happening of a
contingency or otherwise) any Lien on or with respect to any property or asset (including, without
limitation, any document or instrument in respect of goods or accounts receivable) of the Company
or any such Subsidiary, whether now owned or held or hereafter acquired, or any income or profits
therefrom or assign or otherwise convey any right to receive income or profits (unless it makes, or
causes to be made, effective provision whereby the Notes will be equally and ratably secured with
any and all other obligations thereby secured, such security to be pursuant to an agreement
reasonably satisfactory to the Required Holders and, in any such case, the Notes

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shall have the
benefit, to the fullest extent that, and with
such priority as, the holders of the Notes may be entitled under applicable law, of an equitable
Lien on such property), except:

     (a) Liens for taxes, assessments or other governmental charges which are not yet due
and payable or the payment of which is not at the time required by Section 9.4;

     (b) Liens created by or resulting from any litigation or legal proceeding which is
currently being contested in good faith by appropriate proceedings, provided that payment
thereof is not required by Section 9.4, and Liens securing judgments for the payment of
money not constituting an Event of Default under Section 11(i);

     (c) Liens incidental to the conduct of the business of the Company and its Subsidiaries
or the ownership of their property, including, without limitation, deposits and landlords’,
lessors’, carriers’, warehousemen’s, mechanics’, materialmen’s and other similar liens, and
Liens with respect to the performance of bids, trade contracts, leases, statutory
obligations, surety and appeal bonds, performance bonds and other obligations of a like
nature, in each case which are not incurred in connection with the incurrence of
Indebtedness and which do not, in the aggregate, Materially impair the use of such property
in the operation of the business of the Company and its Subsidiaries taken as a whole or the
value of such property for the purposes of such business;

     (d) easements, zoning restrictions, rights of way and similar encumbrances on real
property imposed by law as arising in the ordinary course of business that do not secure any
monetary obligation and do not Materially detract from the value of the affected property or
interfere with the ordinary conduct of business of the Company or such Subsidiary;

     (e) Liens existing on the date of this Agreement and securing the Indebtedness of the
Company and its Subsidiaries referred to in Schedule 5.15;

     (f) (i) any Lien in property comprising fixed or capital assets or in rights relating
thereto to secure any rights granted with respect to such property in connection with the
provision of all or a part of the purchase price or cost of the construction of such
property created contemporaneously with, or within 365 days after, such acquisition or the
completion of such construction, or

     (ii) any Lien in property comprising fixed or capital assets existing in such property
at the time of acquisition thereof, whether or not the Indebtedness secured thereby is
assumed by the Company or such Subsidiary, or

     (iii) any Lien existing in the property of a Person at the time such Person is acquired
by, merged into or consolidated with the Company or a Subsidiary or at the time of a sale,
lease or other disposition of the properties of a Person as an entirety or substantially as
an entirety to the Company or a Subsidiary;

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provided, however, that with respect to any of the Liens permitted by this Section 10.5(f),
(A) the principal amount of the Indebtedness secured by any such Liens shall not exceed, in
the aggregate, 100% of the fair market value of the related property (as determined in good
faith by the Company), (B) any such Lien shall extend solely to the item or items of such
property (or improvement thereon) so acquired or constructed and (C) with respect to the
Liens permitted by clauses (ii) or (iii) of this Section 10.5(f), no such Lien shall have
been created or assumed in contemplation of such consolidation or merger or such Person’s
becoming a Subsidiary or such acquisition of property;

     (g) Liens securing the extension, renewal or replacement of any obligation secured by a
Lien permitted by the foregoing paragraphs (e) and (f); provided that (x) the principal
amount of Indebtedness secured by such Lien immediately prior to such extension, renewal or
replacement is not increased or the maturity thereof reduced, (y) such Lien is not extended
to any other property, and (z) immediately after such extension, renewal or replacement no
Default or Event of Default would exist;

     (h) Liens on property or assets of the Company or any of its Subsidiaries securing
Indebtedness owing to the Company or to a Wholly-Owned Subsidiary;

     (i) customary bankers’ Liens and rights of setoff arising by operation of law and
incurred on deposits made in the ordinary course of business;

     (j) Liens on accounts receivable (and related supporting obligations and books and
records) subject to any Permitted Securitization Facility; and

     (k) Liens on assets securing Indebtedness of the Company or any Subsidiary in addition
to those described in clauses (a) through (j) above, provided, that no such Liens shall be
incurred if at the time thereof or after giving effect thereto, a Default or Event of
Default exists or would exist hereunder, including, without limitation, under Section
10.7(b).

For the purposes of this Section 10.5, any Person becoming a Subsidiary after the date of this
Agreement shall be deemed to have incurred all of its then outstanding Liens at the time it becomes
a Subsidiary, and any Person extending, renewing or refunding any Indebtedness secured by any Lien
shall be deemed to have incurred such Lien at the time of such extension, renewal or refunding.

     Section 10.6. Subsidiary Debt Limitation. The Company will not, at any time, permit any
Subsidiary to, directly or indirectly, create, incur, assume, guarantee, have outstanding, or
otherwise become or remain directly or indirectly liable with respect to, any Indebtedness other
than:

     (a) Indebtedness of a Subsidiary outstanding on the date of this Agreement and
described on Schedule 5.15 and any refinancing, refunding, extension or renewal of such
Indebtedness that does not increase the principal amount thereof;

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     (b) Indebtedness of a Subsidiary owed to the Company or a Wholly-Owned Subsidiary;

     (c) Indebtedness of a Subsidiary outstanding at the time such Subsidiary becomes a
Subsidiary (and any renewal, extension or replacement thereof permitted hereunder without
increase in the principal amount thereof), provided that (i) such Indebtedness shall not
have been incurred in contemplation of such Subsidiary becoming a Subsidiary and (ii)
immediately after such Subsidiary becomes a Subsidiary no Default or Event of Default shall
exist;

     (d) Indebtedness pursuant to any Permitted Securitization Facility;

     (e) Indebtedness of a Subsidiary which is a Guarantor hereunder; and

     (f) Indebtedness of a Subsidiary in addition to that otherwise permitted by paragraphs
(a) through (e) of this Section 10.6, provided that on the date such Subsidiary incurs or
otherwise becomes liable with respect to any such additional Indebtedness and immediately
after giving effect thereto and the concurrent retirement of any other Indebtedness, no
Default or Event of Default exists, including, without limitation, under Section 10.7(b).

     Section 10.7. Financial Covenants.

             (a) Leverage Ratio. The Company will not permit, as of the end of each fiscal quarter, the
Leverage Ratio to exceed 3.50 to 1.00, provided, that the Company may permit the Leverage Ratio to
exceed 3.50 to 1.00, but in no event greater than 4.00 to 1.00, for any period of not more than six
successive fiscal quarters so long as the Company timely pays the Additional Interest required
pursuant to the provisions of Section 1 and the Notes.

             (b) Priority Debt. The Company will not, at any time, permit Priority Debt to exceed 20% of
Consolidated Net Worth. For purposes of this Section 10.7(b), Consolidated Net Worth shall be
determined as of the end of the most recently ended fiscal quarter.

             (c) Minimum Interest Coverage. The Company will not permit, as of the end of each fiscal
quarter, the ratio of Consolidated EBITDA to Consolidated Interest Expense, in each case for the
immediately preceding four quarter period ending with the end of such fiscal quarter, to be less
than 2.50 to 1.00.

     Section 10.8. Sale of Assets. Except as permitted under Section 10.2, the Company will not,
and will not permit any Subsidiary to, make any Asset Disposition unless:

     (a) in the good faith opinion of the board of directors or a Responsible Officer of the
Company or the board of directors or a Responsible Officer of such Subsidiary making the
Asset Disposition, the Asset Disposition is in exchange for
consideration having a fair market value at least equal to that of the property exchanged and such Asset
Disposition is, in the good faith judgment of the board of directors or a Responsible

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Officer of the Company or such Subsidiary, in the best interest of the Company or such
Subsidiary;

     (b) at the time thereof and immediately after giving effect to the Asset Disposition,
no Default or Event of Default would exist, it being agreed that for purposes of determining
compliance with Section 10.7(a) and (c), such Asset Disposition shall be treated on a Pro
Forma Basis for the relevant period as having been consummated as of the last day of the
immediately preceding fiscal quarter; and

     (c) immediately after giving effect to the Asset Disposition, the sum of (i) the
Disposition Value of the property subject to such Asset Disposition, plus (ii) the aggregate
Disposition Value for all other property that was the subject of an Asset Disposition during
the period of 365 days immediately preceding such Asset Disposition, would not exceed 15% of
Consolidated Total Assets determined as of the end of the most recently ended fiscal quarter
preceding such Asset Disposition.

To the extent that the Net Proceeds Amount consisting of cash for any Transfer to a Person other
than an Affiliate of the Company or Subsidiary is applied to a Debt Prepayment Application or
applied to a Property Reinvestment Application within one year after such Transfer, then such
Transfer (or, if less than all such Net Proceeds Amount is applied as contemplated hereinabove, the
pro rata percentage thereof which corresponds to the Net Proceeds Amount so applied), only for the
purpose of determining compliance with subsection (c) of this Section 10.8 as of any date, shall be
deemed not to be an Asset Disposition.

Section 11. Events of Default.

          An “Event of Default” shall exist if any of the following conditions or events shall occur and
be continuing:

     (a) the Company defaults in the payment of any principal or Make-Whole Amount, if any,
on any Note when the same becomes due and payable, whether at maturity or at a date fixed
for prepayment or by declaration or otherwise; or

     (b) the Company defaults in the payment of any interest on any Note for more than five
Business Days after the same becomes due and payable; or

     (c) (i) the Company defaults in the performance of or compliance with any term
contained in Section 7.1(d) or Section 10 or (ii) a Guarantor defaults in the performance or
compliance with any term of the Guaranty Agreement; or

     (d) the Company defaults in the performance of or compliance with any term contained
herein (other than those referred to in Sections 11(a), (b) and (c)) and such default is not
remedied within 30 days after the earlier of (i) a Responsible Officer obtaining actual
knowledge of such default and (ii) the Company receiving written notice of such default from any holder of a Note (any such written notice to be identified as a
“notice of default” and to refer specifically to this Section 11(d)); or

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     (e) any representation or warranty made in writing by or on behalf of the Company or
any Guarantor or by any officer of the Company or any Guarantor in this Agreement or the
Guaranty Agreement, as the case may be, or in any writing furnished in connection with the
transactions contemplated hereby proves to have been false or incorrect in any material
respect on the date as of which made; or

     (f) (i) the Company or any Subsidiary is in default (as principal or as guarantor or
other surety) in the payment of any principal of or premium or make-whole amount or interest
on any Indebtedness that is outstanding in an aggregate principal amount of at least
$25,000,000 beyond any period of grace provided with respect thereto, or (ii) the Company or
any Subsidiary is in default in the performance of or compliance with any term of any
evidence of any Indebtedness in an aggregate outstanding principal amount of at least
$25,000,000 or of any mortgage, indenture or other agreement relating thereto or any other
condition exists, and as a consequence of such default or condition such Indebtedness has
become, or has been declared (or one or more Persons are entitled to declare such
Indebtedness to be), due and payable before its stated maturity or before its regularly
scheduled dates of payment, or (iii) as a consequence of the occurrence or continuation of
any event or condition (other than the passage of time or the right of the holder of
Indebtedness to convert such Indebtedness into equity interests), (x) the Company or any
Subsidiary has become obligated to purchase or repay Indebtedness before its regular
maturity or before its regularly scheduled dates of payment in an aggregate outstanding
principal amount of at least $25,000,000, or (y) one or more Persons have the right to
require the Company or any Subsidiary so to purchase or repay such Indebtedness; or

     (g) the Company or any Material Subsidiary (i) is generally not paying, or admits in
writing its inability to pay, its debts as they become due, (ii) files, or consents by
answer or otherwise to the filing against it of, a petition for relief or reorganization or
arrangement or any other petition in bankruptcy, for liquidation or to take advantage of any
bankruptcy, insolvency, reorganization, moratorium or other similar law of any jurisdiction,
(iii) makes an assignment for the benefit of its creditors, (iv) consents to the appointment
of a custodian, receiver, trustee or other officer with similar powers with respect to it or
with respect to any substantial part of its property, (v) is adjudicated as insolvent or to
be liquidated, or (vi) takes corporate action for the purpose of any of the foregoing; or

     (h) a court or Governmental Authority of competent jurisdiction enters an order
appointing, without consent by the Company or any of its Material Subsidiaries, a custodian,
receiver, trustee or other officer with similar powers with respect to it or with respect to
any substantial part of its property, or constituting an order for relief or approving a
petition for relief or reorganization or any other petition in bankruptcy or for liquidation
or to take advantage of any bankruptcy or insolvency law of any jurisdiction, or ordering
the dissolution, winding-up or liquidation of the Company or any of its Material Subsidiaries, or any such petition shall be filed against the Company or any of its
Material Subsidiaries and such petition shall not be dismissed within 60 days; or

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     (i) a final judgment or judgments at any one time outstanding for the payment of money
aggregating in excess of $25,000,000 are rendered against one or more of the Company and its
Subsidiaries and which judgments are not, within 60 days after entry thereof, bonded,
discharged or stayed pending appeal, or are not discharged within 60 days after the
expiration of such stay; or

     (j) (i) an ERISA Event occurs with respect to a Pension Plan or Multiemployer Plan
which has resulted or would reasonably be expected to result in liability of the Company
under Title IV of ERISA to the Pension Plan, Multiemployer Plan or the PBGC in an aggregate
amount in excess of $40,000,000, or (ii) the Company or any ERISA Affiliate fails to pay
when due, after the expiration of any applicable grace period, any installment payment with
respect to its withdrawal liability under Section 4201 of ERISA under a Multiemployer Plan
in an aggregate amount in excess of $40,000,000; or

     (k) the Guaranty Agreement shall cease to be in full force and effect (other than
pursuant to and in accordance with Section 9.7(b)) or the Company or any Guarantor shall
contest in any manner the validity, binding nature or enforceability of the Guaranty
Agreement.

Section 12. Remedies on Default, Etc.

     Section 12.1. Acceleration. (a) If an Event of Default with respect to the Company described
in Section 11(g) or (h) (other than an Event of Default described in clause (i) of Section 11(g) or
described in clause (vi) of Section 11(g) by virtue of the fact that such clause encompasses clause
(i) of Section 11(g)) has occurred, all the Notes then outstanding shall automatically become
immediately due and payable.

          (b) If any other Event of Default has occurred and is continuing, the Required Holders may at
any time at its or their option, by notice or notices to the Company, declare all the Notes then
outstanding to be immediately due and payable.

          (c) If any Event of Default described in Section 11(a) or (b) has occurred and is continuing,
any holder or holders of Notes at the time outstanding affected by such Event of Default may at any
time, at its or their option, by notice or notices to the Company, declare all the Notes held by it
or them to be immediately due and payable.

          Upon any Notes becoming due and payable under this Section 12.1, whether automatically or by
declaration, such Notes will forthwith mature and the entire unpaid principal amount of such Notes,
plus (x) all accrued and unpaid interest thereon (including, but not limited to, interest accrued
thereon at the Default Rate) and (y) the Make-Whole Amount determined in respect of such principal amount (to the full extent permitted by applicable law), shall all
be immediately due and payable, in each and every case without presentment, demand, protest or
further notice, all of which are hereby waived. The Company acknowledges, and the parties hereto
agree, that each holder of a Note has the right to maintain its investment in the Notes free from
repayment by the Company (except as herein specifically provided for) and that the

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provision for
payment of a Make-Whole Amount by the Company in the event that the Notes are prepaid or are
accelerated as a result of an Event of Default, is intended to provide compensation for the
deprivation of such right under such circumstances.

     Section 12.2. Other Remedies. If any Default or Event of Default has occurred and is
continuing, and irrespective of whether any Notes have become or have been declared immediately due
and payable under Section 12.1, the holder of any Note at the time outstanding may proceed to
protect and enforce the rights of such holder by an action at law, suit in equity or other
appropriate proceeding, whether for the specific performance of any agreement contained herein or
in any Note or in the Guaranty Agreement, or for an injunction against a violation of any of the
terms hereof or thereof, or in aid of the exercise of any power granted hereby or thereby or by law
or otherwise.

     Section 12.3. Rescission. At any time after any Notes have been declared due and payable
pursuant to Section 12.1(b) or (c), the Required Holders, by written notice to the Company, may
rescind and annul any such declaration and its consequences if (a) the Company has paid all overdue
interest on the Notes, all principal of and Make-Whole Amount, if any, on any Notes that are due
and payable and are unpaid other than by reason of such declaration, and all interest on such
overdue principal and Make-Whole Amount, if any, and (to the extent permitted by applicable law)
any overdue interest in respect of the Notes, at the Default Rate, (b) neither the Company nor any
other Person shall have paid any amounts which have become due solely by reason of such
declaration, (c) all Events of Default and Defaults, other than non-payment of amounts that have
become due solely by reason of such declaration, have been cured or have been waived pursuant to
Section 17, and (d) no judgment or decree has been entered for the payment of any monies due
pursuant hereto or to the Notes. No rescission and annulment under this Section 12.3 will extend
to or affect any subsequent Event of Default or Default or impair any right consequent thereon.

     Section 12.4. No Waivers or Election of Remedies, Expenses, Etc. No course of dealing and no
delay on the part of any holder of any Note in exercising any right, power or remedy shall operate
as a waiver thereof or otherwise prejudice such holder’s rights, powers or remedies. No right,
power or remedy conferred by this Agreement or by any Note upon any holder thereof shall be
exclusive of any other right, power or remedy referred to herein or therein or now or hereafter
available at law, in equity, by statute or otherwise. Without limiting the obligations of the
Company under Section 15, the Company will pay to the holder of each Note on demand such further
amount as shall be sufficient to cover all costs and expenses of such holder reasonably incurred in
any enforcement or collection under this Section 12, including, without limitation, reasonable
attorneys’ fees, expenses and disbursements.

Section 13. Registration; Exchange; Substitution of Notes.

     Section 13.1. Registration of Notes. The Company shall keep at its principal executive office
a register for the registration and registration of transfers of Notes. The name and address of
each holder of one or more Notes, each transfer thereof and the name and address of each transferee
of one or more Notes shall be registered in such register. Prior to due presentment for
registration of transfer, the Person in whose name any Note shall be registered shall be deemed

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and
treated as the owner and holder thereof for all purposes hereof, and the Company shall not be
affected by any notice or knowledge to the contrary. The Company shall give to any holder of a
Note that is an Institutional Investor promptly upon request therefor, a complete and correct copy
of the names and addresses of all registered holders of Notes.

     Section 13.2. Transfer and Exchange of Notes. Upon surrender of any Note to the Company at
the address and to the attention of the designated officer (all as specified in Section 18(iii)),
for registration of transfer or exchange (and in the case of a surrender for registration of
transfer accompanied by a written instrument of transfer duly executed by the registered holder of
such Note or such holder’s attorney duly authorized in writing and accompanied by the relevant
name, address and other information for notices of each transferee of such Note or part thereof),
within ten Business Days thereafter, the Company shall execute and deliver, at the Company’s
expense (except as provided below), one or more new Notes (as requested by the holder thereof) in
exchange therefor, in an aggregate principal amount equal to the unpaid principal amount of the
surrendered Note. Each such new Note shall be payable to such Person as such holder may request
and shall be substantially in the form of Exhibit 1. Each such new Note shall be dated and bear
interest from the date to which interest shall have been paid on the surrendered Note or dated the
date of the surrendered Note if no interest shall have been paid thereon. The Company may require
payment of a sum sufficient to cover any stamp tax or governmental charge imposed in respect of any
such transfer of Notes. Notes shall not be transferred in denominations of less than $1,000,000,
provided that if necessary to enable the registration of transfer by a holder of its entire holding
of Notes, one Note may be in a denomination of less than $1,000,000. Any transferee, by its
acceptance of a Note registered in its name (or the name of its nominee), shall be deemed to have
made the representation set forth in Section 6.2.

     Section 13.3. Replacement of Notes. Upon receipt by the Company at the address and to the
attention of the designated officer (all as specified in Section 18(iii)) of evidence reasonably
satisfactory to it of the ownership of and the loss, theft, destruction or mutilation of any Note
(which evidence shall be, in the case of an Institutional Investor, notice from such Institutional
Investor of such ownership and such loss, theft, destruction or mutilation), and

     (a) in the case of loss, theft or destruction, of indemnity reasonably satisfactory to
it (provided that if the holder of such Note is, or is a nominee for, an original Purchaser
or another holder of a Note with a minimum net worth of at least $10,000,000 or a Qualified Institutional Buyer, such Person’s own unsecured agreement of
indemnity shall be deemed to be satisfactory), or

     (b) in the case of mutilation, upon surrender and cancellation thereof,

within ten Business Days thereafter, the Company at its own expense shall execute and deliver, in
lieu thereof, a new Note, dated and bearing interest from the date to which interest shall have
been paid on such lost, stolen, destroyed or mutilated Note or dated the date of such lost, stolen,
destroyed or mutilated Note if no interest shall have been paid thereon.

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     Section 13.4. Prohibition on Transfer to a Competitor. Each Purchaser agrees that, prior to
the existence of a Default or Event of Default, it will not sell, assign or otherwise transfer any
Note or portion thereof to a Competitor or Competitor Affiliate. As used herein “Competitor” means
any Person which is primarily engaged in the lines of business of the Company and its Subsidiaries
as described in the Memorandum or as changed from time to time as permitted under the terms of this
Agreement. “Competitor Affiliate” means, with respect to any Competitor, (a) any Person at the
time directly or indirectly controlling, controlled by or under common control with such
Competitor, (b) any other Person of which such Competitor at the time owns 50% or more on a
consolidated basis of the equity interest of such Person, and (c) any other Person which at the
time owns 50% or more of any class of the capital stock or other equity interest of such
Competitor, provided that: (i) the provision of investment advisory services by a Person to an
employee benefit plan which is owned or controlled by a Person which would otherwise be a
Competitor or Competitor Affiliate shall not of itself cause the Person providing such services to
be deemed a Competitor or Competitor Affiliate; and (ii) in no event shall an Institutional
Investor be deemed a Competitor or Competitor Affiliate.

Section 14. Payments on Notes.

     Section 14.1. Place of Payment. Subject to Section 14.2, payments of principal, Make-Whole
Amount, if any, and interest becoming due and payable on the Notes shall be made in New York, New
York at the principal office of JPMorgan Chase Bank, N.A. in such jurisdiction. The Company may at
any time, by notice to each holder of a Note, change the place of payment of the Notes so long as
such place of payment shall be either the principal office of the Company in such jurisdiction or
the principal office of a bank or trust company in such jurisdiction.

     Section 14.2. Home Office Payment. So long as any Purchaser or its nominee shall be the
holder of any Note, and notwithstanding anything contained in Section 14.1 or in such Note to the
contrary, the Company will pay all sums becoming due on such Note for principal, Make-Whole Amount,
if any, and interest by the method and at the address specified for such purpose below such
Purchaser’s name in Schedule A, or by such other method or at such other address as such Purchaser
shall have from time to time specified to the Company in writing for such purpose, without the
presentation or surrender of such Note or the making of any notation thereon, except that upon
written request of the Company made concurrently with or reasonably promptly after payment or prepayment in full of any Note, such Purchaser shall surrender such Note for cancellation,
reasonably promptly after any such request, to the Company at its principal executive office or at
the place of payment most recently designated by the Company pursuant to Section 14.1. Prior to
any sale or other disposition of any Note held by a Purchaser or its nominee, such Purchaser will,
at its election, either endorse thereon the amount of principal paid thereon and the last date to
which interest has been paid thereon or surrender such Note to the Company in exchange for a new
Note or Notes pursuant to Section 13.2. The Company will afford the benefits of this Section 14.2
to any Institutional Investor that is the direct or indirect transferee of any Note purchased by a
Purchaser under this Agreement and that has made the same agreement relating to such Note as the
Purchasers have made in this Section 14.2.

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Section 15. Expenses, Etc.

     Section 15.1. Transaction Expenses. Whether or not the transactions contemplated hereby are
consummated, the Company will pay all reasonable costs and expenses (including reasonable
attorneys’ fees of a special counsel for the Purchasers and, if reasonably required by the Required
Holders, local or other counsel) incurred by the Purchasers and each other holder of a Note in
connection with such transactions and in connection with any amendments, waivers or consents under
or in respect of this Agreement or the Notes (whether or not such amendment, waiver or consent
becomes effective), including, without limitation: (a) the reasonable costs and expenses incurred
in enforcing or defending (or determining whether or how to enforce or defend) any rights under
this Agreement or the Notes or in responding to any subpoena or other legal process or informal
investigative demand issued in connection with this Agreement or the Notes, or by reason of being a
holder of any Note, (b) the reasonable costs and expenses, including financial advisors’ fees,
incurred in connection with the insolvency or bankruptcy of the Company or any Subsidiary or in
connection with any work-out or restructuring of the transactions contemplated hereby and by the
Notes and (c) the reasonable costs and expenses incurred in connection with the initial filing of
this Agreement and all related documents and financial information with the SVO provided, that such
costs and expenses under this clause (c) shall not exceed $3,000. The Company will pay, and will
save each Purchaser and each other holder of a Note harmless from, all claims in respect of any
fees, costs or expenses, if any, of brokers and finders (other than those, if any, retained by a
Purchaser or other holder in connection with its purchase of the Notes).

     Section 15.2. Survival. The obligations of the Company under this Section 15 will survive the
payment or transfer of any Note, the enforcement, amendment or waiver of any provision of this
Agreement or the Notes, and the termination of this Agreement.

Section 16. Survival of Representations and Warranties; Entire Agreement.

     All representations and warranties contained herein shall survive the execution and delivery
of this Agreement and the Notes, the purchase or transfer by any Purchaser of any Note or portion
thereof or interest therein and the payment of any Note, and may be relied upon by any subsequent holder of a Note, regardless of any investigation made at any time by or on
behalf of such Purchaser or any other holder of a Note. All statements contained in any
certificate or other instrument delivered by or on behalf of the Company pursuant to this Agreement
shall be deemed representations and warranties of the Company under this Agreement. Subject to
the preceding sentence, this Agreement and the Notes embody the entire agreement and understanding
between each Purchaser and the Company and supersede all prior agreements and understandings
relating to the subject matter hereof.

Section 17. Amendment and Waiver. 

     Section 17.1. Requirements. This Agreement and the Notes may be amended, and the observance
of any term hereof or of the Notes may be waived (either retroactively or prospectively), with (and
only with) the written consent of the Company and the Required Holders, except that (a) no
amendment or waiver of any of the provisions of Section 1, 2, 3, 4, 5,

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6 or 21 hereof, or any
defined term (as it is used therein), will be effective as to any Purchaser unless consented to by
such Purchaser in writing, and (b) no such amendment or waiver may, without the written consent of
the holder of each Note at the time outstanding affected thereby, (i) subject to the provisions of
Section 12 relating to acceleration or rescission, change the amount or time of any prepayment or
payment of principal of, or reduce the rate or change the time of payment or method of computation
of interest or of the Make-Whole Amount on, the Notes, (ii) change the percentage of the principal
amount of the Notes the holders of which are required to consent to any such amendment or waiver,
or (iii) amend any of Sections 8, 11(a), 11(b), 12, 17 or 20.

     Section 17.2. Solicitation of Holders of Notes.

          (a) Solicitation. The Company will provide each holder of the Notes (irrespective of the
amount of Notes then owned by it) with sufficient information, sufficiently far in advance of the
date a decision is required, to enable such holder to make an informed and considered decision with
respect to any proposed amendment, waiver or consent in respect of any of the provisions hereof or
of the Notes. The Company will deliver executed or true and correct copies of each amendment,
waiver or consent effected pursuant to the provisions of this Section 17 to each holder of
outstanding Notes promptly following the date on which it is executed and delivered by, or receives
the consent or approval of, the requisite holders of Notes.

          (b) Payment. The Company will not directly or indirectly pay or cause to be paid any
remuneration, whether by way of supplemental or additional interest, fee or otherwise, or grant any
security or provide other credit support, to any holder of Notes as consideration for or as an
inducement to the entering into by any holder of Notes of any waiver or amendment of any of the
terms and provisions hereof unless such remuneration is concurrently paid, or security is
concurrently granted or other credit support concurrently provided, on the same terms, ratably to
each holder of Notes then outstanding even if such holder did not consent to such waiver or
amendment.

     Section 17.3. Binding Effect, etc. Any amendment or waiver consented to as provided in this
Section 17 applies equally to all holders of Notes and is binding upon them and upon each future
holder of any Note and upon the Company without regard to whether such Note has been marked to
indicate such amendment or waiver. No such amendment or waiver will extend to or affect any
obligation, covenant, agreement, Default or Event of Default not expressly amended or waived or
impair any right consequent thereon. No course of dealing between the Company and the holder of
any Note nor any delay in exercising any rights hereunder or under any Note shall operate as a
waiver of any rights of any holder of such Note. As used herein, the term “this Agreement” and
references thereto shall mean this Agreement as it may from time to time be amended or
supplemented.

     Section 17.4. Notes Held by Company, etc. Solely for the purpose of determining whether the
holders of the requisite percentage of the aggregate principal amount of Notes then outstanding
approved or consented to any amendment, waiver or consent to be given under this Agreement or the
Notes, or have directed the taking of any action provided herein or in the Notes to be taken upon
the direction of the holders of a specified percentage of the aggregate principal

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amount of Notes
then outstanding, Notes directly or indirectly owned by the Company or any of its Affiliates shall
be deemed not to be outstanding.

Section 18. Notices.

     All notices and communications provided for hereunder shall be in writing and sent (a) by
telecopy if the sender on the same day sends a confirming copy of such notice by a recognized
overnight delivery service (charges prepaid), or (b) by registered or certified mail with return
receipt requested (postage prepaid), or (c) by a recognized overnight delivery service (with
charges prepaid). Any such notice must be sent:

     (i) if to any Purchaser or its nominee, to such Purchaser or nominee at the address
specified for such communications in Schedule A, or at such other address as such Purchaser
or nominee shall have specified to the Company in writing,

     (ii) if to any other holder of any Note, to such holder at such address as such other
holder shall have specified to the Company in writing, or

     (iii) if to the Company, to the Company at its address set forth at the beginning
hereof to the attention of the Chief Financial Officer with a copy to the General Counsel,
or at such other address as the Company shall have specified to the holder of each Note in
writing.

Notices under this Section 18 will be deemed given only when actually received.

Section 19. Reproduction of Documents.

     This Agreement and all documents relating thereto, including, without limitation, (a)
consents, waivers and modifications that may hereafter be executed, (b) documents received by any
Purchaser at the Closing (except the Notes themselves), and (c) financial statements, certificates
and other information previously or hereafter furnished to any Purchaser, may be reproduced by such
Purchaser by any photographic, photostatic, electronic, digital, or other similar process and such
Purchaser may destroy any original document so reproduced. The Company agrees and stipulates that,
to the extent permitted by applicable law, any such reproduction shall be admissible in evidence as
the original itself in any judicial or administrative proceeding (whether or not the original is in
existence and whether or not such reproduction was made by such Purchaser in the regular course of
business) and any enlargement, facsimile or further reproduction of such reproduction shall
likewise be admissible in evidence. This Section 19 shall not prohibit the Company or any other
holder of Notes from contesting any such reproduction to the same extent that it could contest the
original, or from introducing evidence to demonstrate the inaccuracy of any such reproduction.

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Section 20. Confidential Information.

     For the purposes of this Section 20, “Confidential Information” means non-public information
delivered to any Purchaser by or on behalf of the Company or any Subsidiary in connection with the
transactions contemplated by or otherwise pursuant to this Agreement, provided that such term does
not include information that (a) was publicly known or otherwise known to such Purchaser prior to
the time of such disclosure, (b) subsequently becomes publicly known through no act or omission by
such Purchaser or any person acting on such Purchaser’s behalf, (c) otherwise becomes known to such
Purchaser other than through disclosure by the Company or any Subsidiary or (d) constitutes
financial statements delivered to such Purchaser under Section 7.1 that are otherwise publicly
available. Each Purchaser will maintain the confidentiality of such Confidential Information in
accordance with procedures adopted by such Purchaser in good faith to protect confidential
information of third parties delivered to such Purchaser, provided that such Purchaser may deliver
or disclose Confidential Information to (i) its directors, officers, employees, agents, attorneys,
trustees and affiliates (to the extent such disclosure reasonably relates to the administration of
the investment represented by its Notes), (ii) its financial advisors and other professional
advisors who agree to hold confidential the Confidential Information in accordance with the terms
of this Section 20, (iii) any other holder of any Note, (iv) any Institutional Investor to which it
sells or offers to sell such Note or any part thereof or any participation therein (if such Person
has agreed in writing prior to its receipt of such Confidential Information to be bound by the
provisions of this Section 20), (v) any Person from which it offers to purchase any security of the
Company (if such Person has agreed in writing prior to its receipt of such Confidential Information
to be bound by the provisions of this Section 20), (vi) any federal or state regulatory authority
having jurisdiction over such Purchaser, (vii) the NAIC or the SVO or, in each case, any similar
organization, or any nationally recognized rating agency that requires access to information about
such Purchaser’s investment portfolio, or (viii) any other Person to which such delivery or
disclosure may be necessary or appropriate (w) to effect compliance with any law, rule, regulation or order applicable to
such Purchaser, (x) in response to any subpoena or other legal process, (y) in connection with any
litigation to which such Purchaser is a party or (z) if an Event of Default has occurred and is
continuing, to the extent such Purchaser may reasonably determine such delivery and disclosure to
be necessary or appropriate in the enforcement or for the protection of the rights and remedies
under such Purchaser’s Notes and this Agreement. Each holder of a Note, by its acceptance of a
Note, will be deemed to have agreed to be bound by and to be entitled to the benefits of this
Section 20 as though it were a party to this Agreement. On reasonable request by the Company in
connection with the delivery to any holder of a Note of information required to be delivered to
such holder under this Agreement or requested by such holder (other than a holder that is a party
to this Agreement or its nominee), such holder will enter into an agreement with the Company
embodying the provisions of this Section 20.

Section 21. Substitution of Purchaser.

     Each Purchaser shall have the right to substitute any one of its Affiliates as the purchaser
of the Notes that it has agreed to purchase hereunder, by written notice to the Company, which
notice shall be signed by both such Purchaser and such Affiliate, shall contain such Affiliate’s
agreement to be bound by this Agreement and shall contain a confirmation by such Affiliate of

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the
accuracy with respect to it of the representations set forth in Section 6. Upon receipt of such
notice, any reference to such Purchaser in this Agreement (other than in this Section 21), shall be
deemed to refer to such Affiliate in lieu of such original Purchaser. In the event that such
Affiliate is so substituted as a Purchaser hereunder and such Affiliate thereafter transfers to
such original Purchaser all of the Notes then held by such Affiliate, upon receipt by the Company
of notice of such transfer, any reference to such Affiliate as a “Purchaser” in this Agreement
(other than in this Section 21), shall no longer be deemed to refer to such Affiliate, but shall
refer to such original Purchaser, and such original Purchaser shall again have all the rights of an
original holder of the Notes under this Agreement.

Section 22. Miscellaneous.

     Section 22.1. Successors and Assigns. All covenants and other agreements contained in this
Agreement by or on behalf of any of the parties hereto bind and inure to the benefit of their
respective successors and assigns (including, without limitation, any subsequent holder of a Note)
whether so expressed or not.

     Section 22.2. Payments Due on Non-Business Days. Anything in this Agreement or the Notes to
the contrary notwithstanding (but without limiting the requirement in Section 8.4 that the notice
of any optional prepayment specify a Business Day as the date fixed for such prepayment), any
payment of principal of or Make-Whole Amount or interest on any Note that is due on a date other
than a Business Day shall be made on the next succeeding Business Day without including the
additional days elapsed in the computation of the interest payable on such next succeeding Business
Day; provided that if the maturity date of any Note is a date other than a Business Day, the
payment otherwise due on such maturity date shall be made on the next succeeding Business Day and shall include the additional days elapsed in the computation of interest payable on such
next succeeding Business Day.

     Section 22.3. Accounting Terms. All accounting terms used herein which are not expressly
defined in this Agreement have the meanings respectively given to them in accordance with GAAP.
Except as otherwise specifically provided herein, (i) all computations made pursuant to this
Agreement shall be made in accordance with GAAP, and (ii) all financial statements shall be
prepared in accordance with GAAP.

     Section 22.4. Severability. Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall (to the full extent permitted by
law) not invalidate or render unenforceable such provision in any other jurisdiction.

     Section 22.5. Construction, etc. Each covenant contained herein shall be construed (absent
express provision to the contrary) as being independent of each other covenant contained herein, so
that compliance with any one covenant shall not (absent such an express contrary provision) be
deemed to excuse compliance with any other covenant. Where any provision herein refers to action
to be taken by any Person, or which such Person is prohibited from taking,

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such provision shall be
applicable whether such action is taken directly or indirectly by such Person.

          For the avoidance of doubt, all Schedules and Exhibits attached to this Agreement shall be
deemed to be a part hereof.

     Section 22.6. Counterparts. This Agreement may be executed in any number of counterparts,
each of which shall be an original but all of which together shall constitute one instrument. Each
counterpart may consist of a number of copies hereof, each signed by less than all, but together
signed by all, of the parties hereto.

     Section 22.7. Governing Law. This Agreement shall be construed and enforced in accordance
with, and the rights of the parties shall be governed by, the law of the State of New York
excluding choice-of-law principles of the law of such State that would permit the application of
the laws of a jurisdiction other than such State.

     Section 22.8. Jurisdiction and Process; Waiver of Jury Trial. (a) The Company irrevocably
submits to the non-exclusive jurisdiction of any New York State or federal court sitting in the
Borough of Manhattan, The City of New York, over any suit, action or proceeding arising out of or
relating to this Agreement or the Notes. To the fullest extent permitted by applicable law, the
Company irrevocably waives and agrees not to assert, by way of motion, as a defense or otherwise,
any claim that it is not subject to the jurisdiction of any such court, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding
brought in any such court and any claim that any such suit, action or proceeding brought in any
such court has been brought in an inconvenient forum.

          (b) The Company consents to process being served by or on behalf of any holder of Notes in any
suit, action or proceeding of the nature referred to in Section 22.8(a) by mailing a copy thereof
by registered or certified mail (or any substantially similar form of mail), postage prepaid,
return receipt requested, to it at its address specified in Section 18 or at such other address of
which such holder shall then have been notified pursuant to said Section. The Company agrees that
such service upon receipt (i) shall be deemed in every respect effective service of process upon it
in any such suit, action or proceeding and (ii) shall, to the fullest extent permitted by
applicable law, be taken and held to be valid personal service upon and personal delivery to it.
Notices hereunder shall be conclusively presumed received as evidenced by a delivery receipt
furnished by the United States Postal Service or any reputable commercial delivery service.

          (c) Nothing in this Section 22.8 shall affect the right of any holder of a Note to serve
process in any manner permitted by law, or limit any right that the holders of any of the Notes may
have to bring proceedings against the Company in the courts of any appropriate jurisdiction or to
enforce in any lawful manner a judgment obtained in one jurisdiction in any other jurisdiction.

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	 	Note Purchase Agreement

     (d) The parties hereto hereby waive trial by jury in any action brought on or with respect
to this Agreement, the Notes or any other document executed in connection herewith or
therewith.

* * * * *

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	 	Note Purchase Agreement

     If you are in agreement with the foregoing, please sign the form of agreement on a counterpart
of this Agreement and return it to the Company, whereupon this Agreement shall become a binding
agreement between you and the Company.

	 	 	 	 	 	 	 	 
	 	 	Very truly yours,
	 
	 	 	 	 	 	 
	 	 	TreeHouse Foods, Inc.
	 
	 	 	 	 	 	 
	 

	 	By	 	/s/ Dennis F. Riordan	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	Dennis F. Riordan	 
	 	 	 	 	Title:	Senior Vice President and
Chief Financial Officer	 

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	 	Note Purchase Agreement

	 	 	 	 	 	 
	The foregoing is hereby agreed to as of the date thereof.
	 
	 	 	 	 
	The Northwestern Mutual Life Insurance Company
	 
	 	 	 	 
	By
	 	/s/ Timothy S. Collins
	 	 	 
	 

	 	Name:	 	Timothy S. Collins
	 

	 	 	 	 
	 

	 	Title:	 	Its Authorized Representative
	 

	 	 	 	 

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	 	Note Purchase Agreement

	 	 	 	 	 	 
	The foregoing is hereby agreed to as of the date thereof.
	 
	 	 	 	 
	The Guardian Life Insurance Company of America
	 
	 	 	 	 
	By
	 	/s/ Ellen I. Whittaker
	 	 	 
	 

	 	Name:	 	Ellen I. Whittaker
	 

	 	 	 	 
	 

	 	Title:	 	Director, Fixed Income Investments
	 

	 	 	 	 
	 
	 	 	 	 
	The Guardian Insurance & Annuity Company, Inc. 
	 
	 	 	 	 
	By
	 	/s/ Ellen I. Whittaker
	 	 	 
	 

	 	Name:	 	Ellen I. Whittaker
	 

	 	 	 	 
	 

	 	Title:	 	Director, Fixed Income Investments
	 

	 	 	 	 

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	 	Note Purchase Agreement

	 	 	 	 	 	 
	The foregoing is hereby agreed to as of the date thereof.
	 
	 	 	 	 
	CUNA Mutual Insurance Society
	CUMIS Insurance Society, Inc.
	MEMBERS Life Insurance Company
	CUNA Mutual Life Insurance Company
	 
	 	 	 	 
	By:	 	MEMBERS Capital Advisors, Inc.,
	 	 	acting as Investment Advisor
	 
	 	 	 	 
	 

	 	By:	 	/s/ James E. McDonald, Jr.
	 

	 	 	 	 
	 

	 	 	 	Name: James E. McDonald, Jr.
	 

	 	 	 	Title: Director, Private Placements

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	 	Note Purchase Agreement
	 
	 	 
	The
foregoing is hereby agreed to as of the date thereof.
	 	 
	 
	 	 
	 
	 	 
	Farm Credit Bank of Texas
	 	 

	 	 	 	 	 	 	 
	By:
	 	/s/ Eric J. Paul	 	 
	 	 	 	 	 
	 

	 	Name:	 	Eric J. Paul	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	Vice President	 	 
	 

	 	 	 	 	 	 

-45-

 

Defined Terms

     As used herein, the following terms have the respective meanings set forth below or set forth
in the Section hereof following such term:

     “Acquisition” means the acquisition (whether by purchase, merger, consolidation or otherwise)
of (a) a controlling equity or other ownership interest in another Person or (b) assets of another
Person which constitute all or substantially all of the assets of such Person or of a line or lines
of business conducted by such Person.

     “Acquisition and Disposition Adjustments” means, in connection with calculating Consolidated
EBITDA or Consolidated Interest Expense for any period on a Pro Forma Basis with respect to any
Acquisition and/or Disposition (a) any projected synergies or similar benefits expected to be
realized as a result of such Acquisition and/or Disposition to the extent such synergies or similar
benefits would be permitted to be reflected in financial statements prepared in compliance with
Article XI of Regulation S-X under the Securities Act, as set forth in the Officer’s Certificate
delivered pursuant to Section 7.2(a), and (b) any other demonstrable cost-savings and other
adjustments not included in the foregoing clause (a) that are reasonably anticipated by the Company
to be achieved in connection with any such Acquisition and/or Disposition for the 12-month period
following the consummation of such Acquisition and/or Disposition, which the Company determines are
reasonable and as set forth in the Officer’s Certificate delivered pursuant to Section 7.2(a),
provided, that the aggregate additions to Consolidated EBITDA, for any period being tested,
pursuant to this clause (b) shall not exceed 10% of the sum of (i) Consolidated EBITDA plus (ii)
any adjustment pursuant to the foregoing clause (a).

     “Additional Interest” is defined in Section 1.2.

     “Affiliate” means, at any time, (i) with respect to any Person, any other Person that at such
time directly or indirectly through one or more intermediaries Controls, or is Controlled by, or is
under common Control with, such first Person, and, (ii) for purposes of Section 10.1 only, with
respect to the Company, shall also include any Person beneficially owning or holding, directly or
indirectly, 10% or more of any class of voting or equity interests of the Company or any Subsidiary
or any Person of which the Company and its Subsidiaries beneficially own or hold, in the aggregate,
directly or indirectly, 10% or more of any class of voting or equity interests. As used in this
definition, “Control” means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of a Person, whether through the ownership of voting
securities, by contract or otherwise. Unless the context otherwise clearly requires, any reference
to an “Affiliate” is a reference to an Affiliate of the Company.

     “Anti-Terrorism Order” means Executive Order No. 13224 of September 24, 2001, Blocking
Property and Prohibiting Transactions with Persons Who Commit, Threaten to Commit or Support
Terrorism, 66 U.S. Fed. Reg. 49, 079 (2001), as amended.

Schedule B

(to Note Purchase Agreement)

 

 

     “Asset Disposition” means any Transfer except:

     (a) any Transfer from the Company to a Wholly-Owned Subsidiary or from a Subsidiary to
the Company or to another Subsidiary;

     (b) any Transfer made in the ordinary course of business and involving only property
that is either (1) held for lease or sale or (2) equipment, fixtures, supplies or materials
no longer required in the operation of the business of the Company or any of its
Subsidiaries or that is obsolete;

     (c) any Transfer involving only accounts receivable (and related supporting obligations
and books and records) owned by the Company or a Subsidiary being sold or otherwise
transferred to a Special Purpose Finance Subsidiary pursuant to any Permitted Securitization
Facility; and

     (d) any Transfer by the Company or a Subsidiary of property acquired or constructed
after the date of Closing so long as such property is leased back by the Company or such
Subsidiary, as lessee, substantially concurrently with such Transfer (a “Sale-Leaseback”),
provided that such Sale-Leaseback occurs within 365 days of the original acquisition or
construction of such property by the Company or such Subsidiary.

     “Business Day” means (a) for the purposes of Section 8.6 only, any day other than a Saturday,
a Sunday or a day on which commercial banks in New York City are required or authorized to be
closed, and (b) for the purposes of any other provision of this Agreement, any day other than a
Saturday, a Sunday or a day on which commercial banks in New York, New York or Chicago, Illinois
are required or authorized to be closed.

     “Capital Lease” means, at any time, a lease with respect to which the lessee is required
concurrently to recognize the acquisition of an asset and the incurrence of a liability in
accordance with GAAP.

     “Change of Control” means an event or series of events by which any “person” or “group” (as
such terms are used in Sections 13(d) and 14(d) of the Exchange Act, but excluding any employee
benefit plan of such person or its subsidiaries, and any person or entity acting in its capacity as
trustee, agent or other fiduciary or administrator of any such plan) becomes the “beneficial owner”
(as defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly, of 50% or
more of the equity securities of the Borrower entitled to vote for members of the board of
directors or equivalent governing body of the Company on a fully-diluted basis.

     “Closing” is defined in Section 3.

     “Code” means the Internal Revenue Code of 1986, as amended from time to time, and the rules
and regulations promulgated thereunder from time to time.

     “Company”
means TreeHouse Foods, Inc., a Delaware corporation, or any successor that becomes
such in the manner prescribed in Section 10.2.

-2-

 

     “Confidential Information” is defined in Section 20.

     “Consolidated Domestic Assets” means, as of any date of determination, the net book value of
all assets of the Company and its Domestic Subsidiaries on such date determined on a consolidated
basis in accordance with GAAP.

     “Consolidated EBITDA” means, with reference to any period, Consolidated Net Earnings for such
period plus, to the extent deducted in calculating Consolidated Net Earnings, (i) Consolidated
Interest Expense, (ii) provisions for Federal, state, local and foreign income taxes, (iii)
depreciation, (iv) amortization, (v) non-recurring expenses or losses of the Company and its
Subsidiaries reducing such Consolidated Net Earnings which do not represent a cash item in such
period, provided that Consolidated EBITDA shall be decreased by the amount of any cash expenditures
in such period related to non-cash expenses or losses added back to Consolidated EBITDA during any
prior period, (vi) any non-cash stock-based compensation expenses of the Company and its
Subsidiaries reducing Consolidated Net Income for such period and (vii) Acquisition and Disposition
Adjustments, all calculated for the Company and its Subsidiaries in accordance with GAAP on a
consolidated basis. For purposes of determining compliance with Section 10.7(a) and (c) only,
Consolidated EBITDA shall be determined on a Pro Forma Basis.

     “Consolidated Interest Expense” means, for any period, for the Company and its Subsidiaries on
a consolidated basis and without duplication, the sum of (a) all interest, premium payments, debt
discount, fees, charges and related expenses of the Company and its Subsidiaries in connection with
borrowed money (including capitalized interest) or in connection with the deferred purchase price
of assets, in each case to the extent treated as interest in accordance with GAAP, (b) the portion
of rent expense of the Company and its Subsidiaries with respect to such period under Capital
Leases that is treated as interest in accordance with GAAP, and (c) the amount of payments in
respect of Off-Balance Sheet Liabilities of the Company and its Subsidiaries with respect to such
period that are in the nature of interest (including, with respect to securitization transactions,
the aggregate discount (net of reserves) from the face value of the assets transferred), provided
that Consolidated Interest Expense for any period shall exclude any amortization or write-off of
deferred financing fees during such period. For purposes of determining compliance with Section
10.7(c) only, Consolidated Interest Expense shall be determined on a Pro Forma Basis.

     “Consolidated Net Earnings” means, for any period, the net earnings (or loss) of the Company
and its Subsidiaries for such period, determined on a consolidated basis in accordance with GAAP,
excluding (to the extent deducted to calculate Consolidated Net Earnings) any extraordinary and
non-recurring gains or losses.

     “Consolidated Net Worth” means, as at any date of determination, the value of stockholders’
equity of the Company and its Subsidiaries as of such date determined on a consolidated basis in
accordance with GAAP.

-3-

 

     “Consolidated Total Assets” means, as at any date of determination, the total assets of the
Company and its Subsidiaries on such date, determined on a consolidated basis in accordance with
GAAP.

     “Consolidated Total Indebtedness” means, as at any date of determination and without
duplication, the aggregate Indebtedness of the Company and its Subsidiaries as of such date
calculated on a consolidated basis in accordance with GAAP.

     “Debtor Relief Laws” means the Bankruptcy Code of the United States, and all other
liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium,
rearrangement, receivership, insolvency, reorganization, or similar debtor relief laws of the
United States or other applicable jurisdictions from time to time in effect and affecting the
rights of creditors generally.

     “Debt Prepayment Application” means, with respect to any Transfer of property constituting an
Asset Disposition, the application by the Company or any Subsidiary of cash in an amount equal to
the Net Proceeds Amount (or portion thereof) with respect to such Transfer to pay Senior Debt of
the Company or any Subsidiary (other than Senior Debt in respect of any revolving credit or similar
credit facility providing the Company or any Subsidiary with the right to obtain loans or other
extensions of credit from time to time, except to the extent that in connection with such payment
of Senior Debt the availability of credit under such credit facility is permanently reduced by an
amount not less than the amount of such proceeds applied to the payment of such Senior Debt).

     “Default” means an event or condition the occurrence or existence of which would, with the
lapse of time or the giving of notice or both, become an Event of Default.

     “Default Rate” means that rate of interest that is the greater of (i) 2.0% per annum above the
rate of interest stated in clause (a) of the first paragraph of the Notes or (ii) 2.0% over the
rate of interest publicly announced by JPMorgan Chase Bank, N.A. in New York, New York as its
“base” or “prime” rate.

     “Disposition” means the sale, transfer, license, lease or other disposition (including any
sale and leaseback transaction) of any property by any Person, including any sale, assignment,
transfer or other disposal, with or without recourse, of any notes or accounts receivable or any
rights and claims associated therewith.

     “Disposition Value” means, at any time, with respect to any property

     (a) in the case of property that does not constitute Subsidiary Stock, the book value
thereof, valued at the time of the disposition thereof in good faith by the Company, and

     (b) in the case of property that constitutes Subsidiary Stock, an amount equal to that
percentage of book value of the assets of the Subsidiary that issued such Subsidiary Stock
as is equal to the percentage that such Subsidiary Stock represents of

-4-

 

all of the outstanding capital stock or similar equity interests of such Subsidiary
(assuming, in making such calculations, that all Securities convertible into such capital
stock or similar equity interests are so converted and giving full effect to all
transactions that would occur or be required in connection with such conversion) determined
at the time of the disposition thereof, in good faith by the Company.

     “Domestic Subsidiary” means any Subsidiary that is organized under the laws of any
governmental subdivision of the United States.

     “Electronic Delivery” is defined in Section 7.1(a).

     “Environmental Laws” means any and all Federal, state, local, and foreign statutes, laws,
regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants,
franchises, licenses, agreements or governmental restrictions relating to pollution and the
protection of the environment or the release of any materials into the environment, including but
not limited to those related to Hazardous Materials.

     “ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to
time, and the rules and regulations promulgated thereunder from time to time in effect.

     “ERISA Affiliate” means any trade or business (whether or not incorporated) that is treated
as a single employer together with the Company under section 414 of the Code.

     “ERISA Event” means (a) a Reportable Event with respect to a Pension Plan; (b) a withdrawal by
the Company or any ERISA Affiliate from a Pension Plan subject to Section 4063 of ERISA during a
plan year in which it was a substantial employer (as defined in Section 4001(a)(2) of ERISA) or a
cessation of operations that is treated as such a withdrawal under Section 4062(e) of ERISA; (c) a
complete or partial withdrawal by the Company or any ERISA Affiliate from a Multiemployer Plan or
the receipt of notification that a Multiemployer Plan is in reorganization that could reasonably be
expected to result in a material liability to the Company or any ERISA Affiliate; (d) the filing of
a notice of intent to terminate, the treatment of a Plan amendment as a termination under Section
4041 or 4041A of ERISA, or the commencement of proceedings by the PBGC to terminate a Pension Plan
or Multiemployer Plan; (e) an event or condition which constitutes grounds under Section 4042 of
ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan or
Multiemployer Plan; or (f) the imposition of any material liability under Title IV of ERISA, other
than for PBGC premiums due but not delinquent under Section 4007 of ERISA, upon the Company or any
ERISA Affiliate.

     “Event of Default” is defined in Section 11.

     “Form 10-K” is defined in Section 7.1(b).

     “Form 10-Q” is defined in Section 7.1(a).

-5-

 

     “GAAP” means generally accepted accounting principles as in effect from time to time in the
United States of America.

     “Governmental Authority” means

     (a) the government of

     (i) the United States of America or any State or other political subdivision
thereof, or

     (ii) any other jurisdiction in which the Company or any Subsidiary conducts all
or any part of its business, or which asserts jurisdiction over any properties of
the Company or any Subsidiary, or

     (b) any entity exercising executive, legislative, judicial, regulatory or
administrative functions of, or pertaining to, any such government.

     “Guarantor” means (i) as of the date of Closing, Bay Valley Foods, LLC, a Delaware limited
liability company, and (ii) subsequent to the date of Closing, any Subsidiary which has satisfied
the requirements of Section 9.7(a), subject, in each case, to release pursuant to and in accordance
with the provisions of Section 9.7(b).

     “Guaranty” means, with respect to any Person, any obligation (except the endorsement in the
ordinary course of business of negotiable instruments for deposit or collection) of such Person
guaranteeing or in effect guaranteeing any indebtedness, dividend or other obligation of any other
Person in any manner, whether directly or indirectly, including (without limitation) obligations
incurred through an agreement, contingent or otherwise, by such Person:

     (a) to purchase such indebtedness or obligation or any property constituting security
therefor;

     (b) to advance or supply funds (i) for the purchase or payment of such indebtedness or
obligation, or (ii) to maintain any working capital or other balance sheet condition or any
income statement condition of any other Person or otherwise to advance or make available
funds for the purchase or payment of such indebtedness or obligation;

     (c) to lease properties or to purchase properties or services primarily for the purpose
of assuring the owner of such indebtedness or obligation of the ability of any other Person
to make payment of the indebtedness or obligation; or

     (d) otherwise to assure the owner of such indebtedness or obligation against loss in
respect thereof.

In any computation of the indebtedness or other liabilities of the obligor under any Guaranty, the
indebtedness or other obligations that are the subject of such Guaranty shall be assumed to be
direct obligations of such obligor.

-6-

 

     “Guaranty Agreement” shall mean the Guaranty Agreement dated September 22, 2006, substantially
in the form of Exhibit 9.7, as amended, modified or supplemented from time to time.

     “Guaranty Joinder Agreement” means the Guaranty Joinder Agreement substantially in the form of
Exhibit A to the Guaranty Agreement, as amended, modified or supplemented from time to time.

     “Hazardous Material” means any and all pollutants, toxic or hazardous wastes or other
substances that might pose a hazard to health and safety, the removal of which may be required or
the generation, manufacture, refining, production, processing, treatment, storage, handling,
transportation, transfer, use, disposal, release, discharge, spillage, seepage or filtration of
which is or shall be restricted, prohibited or penalized by any applicable law including, but not
limited to, asbestos, urea formaldehyde foam insulation, polychlorinated biphenyls, petroleum,
petroleum products, lead based paint, radon gas or similar restricted, prohibited or penalized
substances.

     “holder” means, with respect to any Note the Person in whose name such Note is registered in
the register maintained by the Company pursuant to Section 13.1.

     “Indebtedness” with respect to any Person means, at any time, without duplication,

     (a) its liabilities for borrowed money and its redemption obligations in respect of
mandatorily redeemable Preferred Stock;

     (b) its liabilities for the deferred purchase price of property acquired by such Person
(excluding accounts payable arising in the ordinary course of business but including all
liabilities created or arising under any conditional sale or other title retention agreement
with respect to any such property);

     (c) all liabilities appearing on its balance sheet in accordance with GAAP in respect
of Capital Leases;

     (d) all liabilities for borrowed money secured by any Lien with respect to any property
owned by such Person (whether or not it has assumed or otherwise become liable for such
liabilities);

     (e) all its liabilities in respect of letters of credit or instruments serving a
similar function issued or accepted for its account by banks and other financial
institutions (whether or not representing obligations for borrowed money);

     (f) the aggregate Swap Termination Value of all Swap Contracts of such Person; and

     (g) any Guaranty of such Person with respect to liabilities of a type described in any
of clauses (a) through (f) hereof.

-7-

 

Indebtedness of any Person shall include all obligations of such Person of the character described
in clauses (a) through (g) to the extent such Person remains legally liable in respect thereof
notwithstanding that any such obligation is deemed to be extinguished under GAAP.

     “Institutional Investor” means (a) any Purchaser of a Note, (b) any holder of a Note holding
(together with one or more of its affiliates) more than 10% of the aggregate principal amount of
the Notes then outstanding, (c) any bank, trust company, savings and loan association or other
financial institution, any pension plan, any investment company, any insurance company, any broker
or dealer, or any other similar financial institution or entity, regardless of legal form, and (d)
any Related Fund of any holder of any Note.

     “Leverage Ratio” means, with respect to the Company on a consolidated basis with its
Subsidiaries, as of the end of any fiscal quarter, the ratio of Consolidated Total Indebtedness at
the end of such fiscal quarter to Consolidated EBITDA for the four fiscal quarters then ending.

     “Lien” means, with respect to any Person, any mortgage, lien, pledge, charge, security
interest or other encumbrance, or any interest or title of any vendor, lessor, lender or other
secured party to or of such Person under any conditional sale or other title retention agreement or
Capital Lease, upon or with respect to any property or asset of such Person (including in the case
of stock, stockholder agreements, voting trust agreements and all similar arrangements).

     “Make-Whole Amount” is defined in Section 8.6.

     “Material” means material in relation to the business, operations, affairs, financial
condition, assets or properties of the Company and its Subsidiaries taken as a whole.

     “Material Adverse Effect” means a material adverse effect on (a) the business, operations,
affairs, financial condition, assets or properties of the Company and its Subsidiaries taken as a
whole, or (b) the ability of the Company to perform its obligations under this Agreement and the
Notes, or (c) the validity or enforceability of this Agreement or the Notes.

     “Material Subsidiary” means (i) any Guarantor and (ii) any direct or indirect Domestic
Subsidiary of the Company (a) the total assets of which exceed, as at the end of any calendar
quarter or, in the case of the consummation of any Acquisition (calculated on a Pro Forma Basis
taking into account the consummation of such Acquisition), 10% of Consolidated Domestic Assets, or
(b) is attributed 10% or more of Consolidated EBITDA in any fiscal year or, in the case of the
consummation of any Acquisition, calculated on a Pro Forma Basis taking into account the
consummation of such Acquisition as if such Acquisition occurred on the first day of the fiscal
year most recently ended.

     “Memorandum” is defined in Section 5.3.

     “Multiemployer Plan” means any Plan that is a “multiemployer plan” (as such term is defined in
section 4001(a)(3) of ERISA).

-8-

 

     “NAIC” means the National Association of Insurance Commissioners or any successor thereto.

     “Net Proceeds Amount” means, with respect to any Transfer by the Company or any Subsidiary, an
amount equal to the difference of

     (a) the aggregate amount of the consideration (valued at the fair market value thereof
by the Company or such Subsidiary in good faith) received by the Company or such Subsidiary
in respect of such Transfer, minus

     (b) (i) all ordinary and reasonable out-of-pocket costs, fees and expenses actually
incurred by such Person in connection with such Transfer and (ii) taxes paid or reasonably
estimated to be payable as a result of such Transfer.

     “Notes” is defined in Section 1.

     “Off-Balance Sheet Liabilities” means, with respect to any Person as of any date of
determination thereof, without duplication and to the extent not included as a liability on the
consolidated balance sheet of such Person and its Subsidiaries in accordance with GAAP: (a) with
respect to any asset securitization transaction (including any accounts receivable purchase
facility) (i) the unrecovered investment of purchasers or transferees of assets so transferred, and
(ii) any other payment, recourse, repurchase, hold harmless, indemnity or similar obligation of
such Person or any of its Subsidiaries in respect of assets transferred or payments made in respect
thereof, other than limited recourse provisions that are customary for transactions of such type
and that neither (x) have the effect of limiting the loss or credit risk of such purchasers or
transferees with respect to payment or performance by the obligors of the assets so transferred nor
(y) impair the characterization of the transaction as a true sale under applicable laws (including,
without limitation, Debtor Relief Laws); (b) the monetary obligations under any financing lease or
so-called “synthetic,” tax retention or off-balance sheet lease transaction which, upon the
application of any Debtor Relief Law to such Person or any of its Subsidiaries, would be
characterized as indebtedness; and (c) any other monetary obligation arising with respect to any
other transaction which (i) is characterized as indebtedness for tax purposes but not for
accounting purposes in accordance with GAAP or (ii) is the functional equivalent of or takes the
place of borrowing but which does not constitute a liability on the consolidated balance sheet of
such Person and its Subsidiaries (for purposes of this clause (c), any transaction structured to
provide tax deductibility as interest expense of any dividend, coupon or other periodic payment
will be deemed to be the functional equivalent of a borrowing).

     “Officer’s Certificate” means a certificate of a Senior Financial Officer or of any other
officer of the Company whose responsibilities extend to the subject matter of such certificate.

     “PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in ERISA or any
successor thereto.

-9-

 

     “Pension Plan” means any “employee pension benefit plan” (as such term is defined in Section
3(2) of ERISA), other than a Multiemployer Plan, that is subject to Title IV of ERISA and is
sponsored or maintained by the Company or any ERISA Affiliate or to which the Company or any ERISA
Affiliate contributes or has an obligation to contribute, or in the case of a multiple employer or
other plan described in Section 4064(a) of ERISA, has made contributions at any time during the
immediately preceding five plan years.

     “Permitted Securitization Facility” means any transaction or series of transactions involving
the sale of accounts receivable (and related supporting obligations and books and records) so long
as the Indebtedness thereunder and other payment obligations with respect thereto are nonrecourse
to the Company and its Subsidiaries (other than any Special Purpose Finance Subsidiary), other than
limited recourse provisions that are customary for transactions of such type and do not have the
effect of guaranteeing the repayment of any such Indebtedness or limiting the loss or credit risk
of lenders or purchasers with respect to payment or performance by the obligors of the accounts
receivable so transferred.

     “Person” means an individual, partnership, corporation, limited liability company,
association, trust, unincorporated organization, business entity or Governmental Authority.

     “Plan” means an “employee benefit plan” (as defined in section 3(3) of ERISA) subject to Title
I of ERISA that is or, within the preceding five years, has been established or maintained, or to
which contributions are or, within the preceding five years, have been made or required to be made,
by the Company or any ERISA Affiliate or with respect to which the Company or any ERISA Affiliate
may have any liability.

     “Preferred Stock” means any class of capital stock of a Person that is preferred over any
other class of capital stock (or similar equity interests) of such Person as to the payment of
dividends or the payment of any amount upon liquidation or dissolution of such Person.

     “Priority Debt” means the sum, without duplication, of (i) Indebtedness of the Company and any
Subsidiary secured by Liens not otherwise permitted by paragraphs (a) through (j) of Section 10.5
plus (ii) Indebtedness of Subsidiaries not otherwise permitted by paragraphs (a) through (e) of
Section 10.6.

     “Pro Forma Basis” means, with respect to the calculation of Consolidated EBITDA or
Consolidated Interest Expense for any period, that such calculation shall give pro forma effect to
all Acquisitions and/or Dispositions during such period as if such Acquisitions and/or Dispositions
occurred on the first day of such period, including the incurrence or repayment of any Indebtedness
in connection therewith and (to the extent such information in sufficient detail is reasonably
available) including or excluding the results of operations of the business acquired or disposed
of.

     “property” or “properties” means, unless otherwise specifically limited, real or personal
property of any kind, tangible or intangible, choate or inchoate.

-10-

 

     “Property Reinvestment Application” means, with respect to any Transfer of property
constituting an Asset Disposition, the application of an amount equal to the Net Proceeds Amount
(or portion thereof) with respect to such Transfer to the acquisition by the Company or any of its
Subsidiaries of operating assets for the Company or any Subsidiary to be used in the principal
business of such Person (or of an entity owning operating assets, in which event the Property
Reinvestment Application shall be limited to the fair market value of such operating assets).

     “PTE” is defined in Section 6.2(a).

     “Purchaser” is defined in the first paragraph of this Agreement.

     “Qualified Institutional Buyer” means any Person who is a “qualified institutional buyer”
within the meaning of such term as set forth in Rule 144A(a)(1) under the Securities Act.

     “Related Fund” means, with respect to any holder of any Note, any fund or entity that (i)
invests in Securities or bank loans, and (ii) is advised or managed by such holder, the same
investment advisor as such holder or by an affiliate of such holder or such investment advisor.

     “Reportable Event” means any of the events set forth in Section 4043(c) of ERISA, other than
events for which the 30 day notice period has been waived.

     “Required Holders” means, at any time, the holders of at least 51% in principal amount of the
Notes at the time outstanding (exclusive of Notes then owned by the Company or any of its
Affiliates).

     “Responsible Officer” means any Senior Financial Officer and any other officer of the Company
with responsibility for the administration of the relevant portion of this Agreement.

     “SEC” shall mean the Securities and Exchange Commission of the United States, or any successor
thereto.

     “Securities” or “Security” shall have the meaning specified in Section 2(1) of the Securities
Act.

     “Securities Act” means the Securities Act of 1933, as amended from time to time, and the rules
and regulations promulgated thereunder from time to time in effect.

     “Senior Debt” means any Indebtedness of the Company or any Subsidiary owing to any Person
which is not the Company, a Subsidiary or an Affiliate and which is not expressed to be junior or
subordinate to any other Indebtedness of the Company or such Subsidiary.

     “Senior Financial Officer” means the chief financial officer, principal accounting officer,
treasurer or comptroller of the Company.

-11-

 

     “Special Purpose Finance Subsidiary” means any Subsidiary of the Company created solely for
the purpose of, and whose sole activity shall consist of, acquiring and financing accounts
receivable of the Company and its Subsidiaries pursuant to a Permitted Securitization Facility.

     “Subsidiary” means, as to any Person, any other Person in which such first Person or one or
more of its Subsidiaries or such first Person and one or more of its Subsidiaries owns sufficient
equity or voting interests to enable it or them (as a group) ordinarily, in the absence of
contingencies, to elect a majority of the directors (or Persons performing similar functions) of
such second Person, and any partnership or joint venture if more than a 50% interest in the profits
or capital thereof is owned by such first Person or one or more of its Subsidiaries or such first
Person and one or more of its Subsidiaries (unless such partnership or joint venture can and does
ordinarily take major business actions without the prior approval of such Person or one or more of
its Subsidiaries). Unless the context otherwise clearly requires, any reference to a “Subsidiary”
is a reference to a Subsidiary of the Company.

     “Subsidiary Stock” means, with respect to any Person, the capital stock or limited liability
company or other equity interests (or any options or warrants to purchase stock or similar equity
interests or other Securities exchangeable for or convertible into stock or similar equity
interests) of any Subsidiary of such Person.

     “SVO” means the Securities Valuation Office of the NAIC or any successor to such Office.

     “Swap Contract” means (a) any and all interest rate swap transactions, basis swap
transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity
swaps, commodity options, forward commodity contracts, equity or equity index swaps or options,
bond or bond price or bond index swaps or options or forward foreign exchange transactions, cap
transactions, floor transactions, currency options, spot contracts or any other similar
transactions or any of the foregoing (including, but without limitation, any options to enter into
any of the foregoing), and (b) any and all transactions of any kind, and the related confirmations,
which are subject to the terms and conditions of, or governed by, any form of master agreement
published by the International Swaps and Derivatives Association, Inc., any International Foreign
Exchange Master Agreement, or any other form of master agreement.

     “Swap Termination Value” means, in respect of any one or more Swap Contracts, after taking
into account the effect of any legally enforceable netting agreement relating to such Swap
Contracts, (a) for any date on or after the date such Swap Contracts have been closed out and
termination value(s) determined in accordance therewith, such termination value(s), and (b) for any
date prior to the date referenced in clause (a), the amounts(s) determined as the mark-to-market
values(s) for such Swap Contracts, as determined based upon one or more mid-market or other readily
available quotations provided by any recognized dealer in such Swap Contracts.

     “Transfer” means, with respect to any Person, any transaction (including by merger,
consolidation or disposition of all or substantially all the assets of such Person) in which such

-12-

 

Person sells, conveys, transfers or leases (as lessor) any of its property, including, without
limitation, Subsidiary Stock.

     “USA Patriot Act” means United States Public Law 107-56, Uniting and Strengthening America by
Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT ACT) Act of
2001, as amended from time to time, and the rules and regulations promulgated thereunder from time
to time in effect.

     “Wholly-Owned Subsidiary” means, at any time, any Subsidiary one hundred percent of all of the
equity interests (except directors’ qualifying shares) and voting interests of which are owned by
any one or more of the Company and the Company’s other Wholly-Owned Subsidiaries at such time.

-13-

 

Disclosure Materials

	1.	 	Power Point slides of Treehouse Foods, Inc. Private Placement Investor Conference Call
Presentation dated August 15, 2006.

Schedule 5.3

(to Note Purchase Agreement)

 

 

Subsidiaries, Affiliates, Directors and Senior Officers

Subsidiaries:

	 	 	 	 	 
	Name	 	Jurisdiction	 	Ownership
	Bay Valley Foods, LLC
	 	Delaware	 	100%
	 
	 	 	 	 
	THF Partner, Inc.
	 	Delaware	 	100%
	 
	 	 	 	 
	THF Equities, LP
	 	Delaware	 	Treehouse Foods, Inc. — 1%
	 
	 	 	 	general partner
	 
	 	 	 	 
	 
	 	 	 	THF Partner, Inc. — 99%
	 
	 	 	 	limited partner

Affiliates:

None.

Directors:

Sam K. Reed

George V. Bayly

Gregg L. Engles

Michelle R. Obama

Frank J. O’Connell

Gary D. Smith

Terdema L. Ussery, II

Officers:

Sam K. Reed, Chief Executive Officer

David B. Vermylen, President and Chief Operating Officer

Dennis F. Riordan, Senior Vice President and Chief Financial Officer

Thomas E. O’Neill, Senior Vice President, General Counsel and

     Chief Administrative Officer

Harry J. Walsh, Senior Vice President of Operations

Schedule 5.4

(to Note Purchase Agreement)

 

 

Financial Statements

	1.	 	Financial Statements for the fiscal year ended December 31, 2005
	 
	2.	 	Financial Statements for the fiscal quarter ended March 31, 2006
	 
	3.	 	Financial Statements for the fiscal quarter ended June 30, 2006

Schedule 5.5

(to Note Purchase Agreement)

 

 

Existing Indebtedness

	1.	 	Approximately $248,300,000 outstanding under that certain Credit Agreement dated as of June
27, 2005, among TreeHouse Foods, Inc., Bank of America, N.A., as Administrative Agent, Swing
Line Agent and L/C Issuer, and the Lenders from time to time party thereto, as amended by that
certain Amendment No. 1 to Credit Agreement and Joinder Agreement dated as of August 31, 2006
(as amended, the “Credit Agreement”).

	2.	 	Guaranty Agreement dated as of June 27, 2005, by Bay Valley Foods, LLC in favor of Bank of
America, N.A., as Administrative Agent, guaranteeing the obligations of TreeHouse Foods, Inc.
under the Credit Agreement described in item #1 above.
	 
	3.	 	Capital lease and other obligations, in the aggregate principal amount of $9,660,000.

Schedule 5.15

(to Note Purchase Agreement)

 

 

[Form of Note]

Treehouse Foods, Inc.

6.03% Senior Note Due September 30, 2013 

			
	No. [____]
	 	[Date]
	$[______]
	 	PPN 89469A A* 5

     For Value Received, the undersigned, Treehouse Foods, Inc. (herein called
the “Company”), a corporation organized and existing under the laws of the State of Delaware,
hereby promises to pay to
[                    ], or registered assigns, the principal sum of [                                 ] Dollars (or so much thereof as shall not have been prepaid) on
September 30, 2013, with interest (computed on the basis of a 360-day year of twelve 30-day months)
(a) on the unpaid balance hereof at the rate of 6.03% per annum from the date hereof, payable
semiannually, on the 31st day of March and the 30th day of September in each year, commencing March
31, 2007 and, thereafter, with the March or September next succeeding the date hereof, until the
principal hereof shall have become due and payable, and (b) to the extent permitted by law, on any
overdue payment of interest and, during the continuance of an Event of Default, on such unpaid
balance and on any overdue payment of any Make-Whole Amount, at a rate per annum from time to time
equal to the greater of (i) 8.03% or (ii) 2.0% over the rate of interest publicly announced by
JPMorgan Chase Bank, N.A. from time to time in New York, New York as its “base” or “prime” rate,
payable semiannually as aforesaid (or, at the option of the registered holder hereof, on demand).
Additional interest hereon may also be required pursuant to Section 1 of the Note Purchase
Agreement.

     Payments of principal of, interest on and any Make-Whole Amount with respect to this Note are
to be made in lawful money of the United States of America at JPMorgan Chase Bank, N.A. in New
York, New York or at such other place as the Company shall have designated by written notice to the
holder of this Note as provided in the Note Purchase Agreement referred to below.

     This Note is one of a series of Senior Notes (herein called the “Notes”) issued pursuant to
the Note Purchase Agreement, dated as of September 22, 2006 (as from time to time amended, the
“Note Purchase Agreement”), between the Company and the respective Purchasers named therein and is
entitled to the benefits thereof. Each holder of this Note will be deemed, by its acceptance
hereof, to have (i) agreed to the confidentiality provisions set forth in Section 20 of the Note
Purchase Agreement and (ii) made the representation set forth in Section 6.2 of the Note Purchase
Agreement. Unless otherwise indicated, capitalized terms used in this Note shall have the
respective meanings ascribed to such terms in the Note Purchase Agreement.

     This Note is guaranteed pursuant to the provisions of the Guaranty Agreement.

Exhibit 1

(to Note Purchase Agreement)

 

 

     This Note is a registered Note and, as provided in the Note Purchase Agreement, upon surrender
of this Note for registration of transfer accompanied by a written instrument of transfer duly
executed, by the registered holder hereof or such holder’s attorney duly authorized in writing, a
new Note for a like principal amount will be issued to, and registered in the name of, the
transferee. Prior to due presentment for registration of transfer, the Company may treat the
person in whose name this Note is registered as the owner hereof for the purpose of receiving
payment and for all other purposes, and the Company will not be affected by any notice to the
contrary.

     The Company will make required prepayments of principal on the dates and in the amounts
specified in the Note Purchase Agreement. This Note is also subject to optional prepayment, in
whole or from time to time in part, at the times and on the terms specified in the Note Purchase
Agreement, but not otherwise.

     If an Event of Default occurs and is continuing, the principal of this Note may be declared or
otherwise become due and payable in the manner, at the price (including any applicable Make-Whole
Amount) and with the effect provided in the Note Purchase Agreement.

     This Note shall be construed and enforced in accordance with, and the rights of the Company
and the holder of this Note shall be governed by, the law of the State of New York excluding
choice-of-law principles of the law of such State that would permit the application of the laws of
a jurisdiction other than such State.

	 	 	 	 	 
	 	 	Treehouse Foods, Inc.
	 
	 	 	 	 
	 

	 	By	 	 
	 

	 	 	 	 
	 

	 	 	 	[Title]

-2-

 

FORM OF GUARANTY AGREEMENT

     THIS GUARANTY AGREEMENT (as amended, restated, modified or supplemented from time to time,
this “Guaranty Agreement”), dated as of September 22, 2006, is made by EACH OF THE
UNDERSIGNED AND EACH OTHER PERSON WHO SHALL BECOME A PARTY HERETO BY EXECUTION OF A GUARANTY
JOINDER AGREEMENT (each a “Guarantor” and collectively the “Guarantors”) for the
benefit of the Noteholders (as defined below). Capitalized terms used but not otherwise defined
herein shall have the meanings ascribed to such terms in the Note Purchase Agreement referred to
below.

W I T N E S S E T H:

     WHEREAS, each Guarantor is a direct or indirect subsidiary of Treehouse Foods, Inc., a
Delaware corporation (the “Company”); and

     WHEREAS, in order to repay certain outstanding debt and for other general corporate purposes,
the Company has entered into a Note Purchase Agreement dated as of September 22, 2006, as may be
amended, restated, or otherwise modified from time to time (the “Note Purchase Agreement”)
with the institutions named on Schedule A to such Note Purchase Agreement (such institutions,
together with their successors, assigns and any other future holder of the Notes, the
“Noteholders”), providing for, among other things, the issue and sale to the Noteholders of
$100,000,000 aggregate principal amount of the Company’s 6.03% Senior Notes due September 30, 2013
(such senior notes, as may be amended, restated or otherwise modified from time to time, and also
including any senior notes issued in substitution therefor pursuant to Section 13 of the Note
Purchase Agreement, the “Notes”); and

     WHEREAS, pursuant to the terms of Section 9.7 of the Note Purchase Agreement, the Company may
from time to time cause any of its Subsidiaries to become a party to this Guaranty Agreement
(either by execution on the date hereof or at a future date by way of execution and delivery of a
Guaranty Joinder Agreement) and thereby guarantee the Company’s obligations under the Notes and the
Note Purchase Agreement; and

     WHEREAS, in order to induce the Noteholders to enter into the Note Purchase Agreement with,
and purchase the Notes from, the Company, the Guarantors have agreed to execute this Guaranty
Agreement, and, by their execution and delivery hereof, each acknowledge that they will derive
substantial direct and indirect benefits from the issuance of the Notes;

     NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein, the
parties hereto agree as follows:

     1. Guaranty. Each Guarantor hereby jointly and severally, unconditionally,
absolutely, continually and irrevocably guarantees to the Noteholders the payment in full of the
Guaranteed Liabilities (as defined below). For all purposes of this Guaranty Agreement,
“Guaranteed Liabilities” means: (a) the Company’s prompt payment in full, when due or
declared due and at all such times, of the principal of and Make-Whole Amount, if any, and interest
on (including, without limitation, interest, whether or not an allowable claim, accruing

Exhibit 9.7

(to Note Purchase Agreement)

 

 

after the date of filing of any petition in bankruptcy, or the commencement of any bankruptcy,
insolvency or similar proceeding relating to the Company) the Notes and all other amounts under the
Note Purchase Agreement and all other obligations, agreements and covenants of the Company now or
hereafter existing under the Note Purchase Agreement whether for principal, Make-Whole Amount, if
any, interest (including, without limitation, interest, whether or not an allowable claim, accruing
after the date of filing of any petition in bankruptcy, or the commencement of any bankruptcy,
insolvency or similar proceeding relating to the Company), indemnification payments, expenses
(including reasonable attorneys’ fees and expenses) or otherwise, and all reasonable costs and
expenses, if any, incurred by any Noteholder in connection with enforcing any rights under this
Guaranty Agreement. The Guarantors’ obligations to the Noteholders under this Guaranty Agreement
are hereinafter collectively referred to as the “Guarantors’ Obligations” and, with respect
to each Guarantor individually, the “Guarantor’s Obligations”. Notwithstanding the
foregoing, the liability of each Guarantor individually with respect to its Guarantor’s Obligations
shall be limited to an aggregate amount equal to the largest amount that would not render its
obligations hereunder subject to avoidance under Section 548 of the United States Bankruptcy Code
or any comparable provisions of any applicable state law.

     Each Guarantor agrees that it is jointly and severally, directly and primarily liable (subject
to the limitation in the immediately preceding sentence) for the Guaranteed Liabilities.

     2. Payment. If the Company shall default in payment of any of the Guaranteed
Liabilities, whether principal, interest, Make-Whole Amount, fees (including, but not limited to,
the reasonable fees, expenses and disbursements of counsel), or otherwise, when and as the same
shall become due, and after expiration of any applicable grace period, whether according to the
terms of the Note Purchase Agreement, by acceleration, or otherwise, or upon the occurrence and
during the continuance of any Event of Default under the Note Purchase Agreement, then any or all
of the Guarantors will, upon demand thereof by any Noteholder, fully pay to the Noteholders,
subject to any restriction on each Guarantor’s Obligations set forth in Section 1 hereof,
an amount equal to all the Guaranteed Liabilities then due and owing.

     3. Absolute Rights and Obligations. This is a guaranty of payment and not of
collection. The Guarantors’ Obligations under this Guaranty Agreement shall be joint and several,
absolute and unconditional irrespective of, and each Guarantor hereby expressly waives, to the
extent permitted by law, any defense to its obligations under this Guaranty Agreement to which it
is a party by reason of:

     (a) any lack of legality, validity or enforceability of the Note Purchase Agreement, of
any of the Notes, of this Guaranty Agreement, or of any other agreement or instrument
creating, providing security for, or otherwise relating to any of the Guarantors’
Obligations, any of the Guaranteed Liabilities, or any other guaranty of any of the
Guaranteed Liabilities (the Note Purchase Agreement, the Notes, this Guaranty

E-9.7-3

 

 

Agreement, and all such other agreements and instruments being collectively referred to
as the “Related Agreements”);

     (b) any action taken by any Noteholder hereunder or under any of the Related
Agreements, any exercise of any right or power therein conferred, any failure or omission to
enforce any right conferred thereby, or any waiver of any covenant or condition therein
provided;

     (c) any acceleration of the maturity of any of the Guaranteed Liabilities, of the
Guarantor’s Obligations of any other Guarantor, or of any other obligations or liabilities
of any Person under any of the Related Agreements;

     (d) any release, exchange, non-perfection, lapse in perfection, disposal, deterioration
in value, or impairment of any security for any of the Guaranteed Liabilities, for any of
the Guarantor’s Obligations of any Guarantor, or for any other obligations or liabilities of
any Person under any of the Related Agreements;

     (e) any dissolution of the Company or any Guarantor or any other party to a Related
Agreement, or the combination or consolidation of the Company or any Guarantor or any other
party to a Related Agreement into or with another entity or any transfer or disposition of
any assets of the Company or any Guarantor or any other party to a Related Agreement;

     (f) any extension (including without limitation extensions of time for payment),
renewal, amendment, restructuring or restatement of, any acceptance of late or partial
payments under, or any change in the amount of principal or interest on, or Make-Whole
Amount under, the Note Purchase Agreement, any of the Notes or any other Related Agreement,
in whole or in part;

     (g) the existence, addition, modification, termination, reduction or impairment of
value, or release of any other guaranty (or security therefor) of the Guaranteed Liabilities
(including without limitation the Guarantor’s Obligations of any other Guarantor and
obligations arising under any other Guaranty now or hereafter in effect);

     (h) any waiver of, forbearance or indulgence under, or other consent to any change in
or departure from any term or provision contained in the Note Purchase Agreement, the Notes
or any other Related Agreement, including without limitation any term pertaining to the
payment of any of the Guaranteed Liabilities, any of the Guarantor’s Obligations of any
other Guarantor, or any of the obligations or liabilities of any party to any other Related
Agreement; and

     (i) any other circumstance whatsoever (with or without notice to or knowledge of any
Guarantor) which may or might in any manner or to any extent vary

E-9.7-4

 

 

the risks of such Guarantor, or might otherwise constitute a legal or equitable defense
available to, or discharge of, a surety or a guarantor, including without limitation any
right to require or claim that resort be had to the Company or any other Guarantor or to any
collateral in respect of the Guaranteed Liabilities or Guarantors’ Obligations.

It is the express purpose and intent of the parties hereto that this Guaranty Agreement and the
Guarantors’ Obligations hereunder and under each Guaranty Joinder Agreement shall be absolute and
unconditional under any and all circumstances and shall not be discharged except by payment as
herein provided.

     4. Currency and Funds of Payment. All Guarantors’ Obligations will be paid in lawful
currency of the United States of America and in immediately available funds, regardless of any law,
regulation or decree now or hereafter in effect that might in any manner affect the Guaranteed
Liabilities, or the rights of any Noteholder with respect thereto as against the Company, or cause
or permit to be invoked any alteration in the time, amount or manner of payment by the Company of
any or all of the Guaranteed Liabilities.

     5. Intentionally Deleted.

     6. Subordination. Until this Guaranty Agreement is terminated in accordance with
Section 21 hereof, each Guarantor hereby unconditionally subordinates all present and
future debts, liabilities or obligations now or hereafter owing to such Guarantor (i) of the
Company, to the payment in full of the Guaranteed Liabilities, (ii) of every other Guarantor (an
“obligated guarantor”), to the payment in full of the Guarantors’ Obligations of such obligated
guarantor, and (iii) of each other Person now or hereafter party to a Related Arrangement, to the
payment in full of the obligations of such Person owing to any Noteholder and arising under the
Note Purchase Agreement, the Notes or the other Related Arrangements. All amounts due under such
subordinated debts, liabilities, or obligations shall, upon the occurrence and during the
continuance of an Event of Default, be collected and, upon request by any Noteholder, paid over
forthwith to the Noteholders on account of the Guaranteed Liabilities, the Guarantors’ Obligations,
or such other obligations, as applicable, and, after such request and pending such payment, shall
be held by such Guarantor as agent and bailee of the Noteholders separate and apart from all other
funds, property and accounts of such Guarantor.

     7. Suits. Each Guarantor from time to time shall pay to each Noteholder, on demand
from such Noteholder, at such Noteholder’s place of business as provided for in the Note Purchase
Agreement, such Noteholder’s pro rata share of the Guarantors’ Obligations as they become or are
declared due, and in the event such payment is not made forthwith, the Noteholders or any of them
may proceed to suit against any one or more or all of the Guarantors. One or more and successive
or concurrent suits may be brought hereon by the Noteholders or any of them against any one or more
or all of the Guarantors, whether or not suit has been commenced against the Company, any other
Guarantor, or any other Person and whether or not the Noteholders have taken or failed to take any
other action to collect all or any portion of the

E-9.7-5

 

 

Guaranteed Liabilities or have taken or failed to take any actions against any collateral
securing payment of all or any portion of the Guaranteed Liabilities, and irrespective of any
event, occurrence, or condition described in Section 3 hereof.

     8. Set-Off and Waiver. Each Guarantor waives any right to assert against any
Noteholder as a defense, counterclaim, set-off, recoupment or cross claim in respect of its
Guarantor’s Obligations, any defense (legal or equitable) or other claim which such Guarantor may
now or at any time hereafter have against the Company or any or all of the Noteholders without
waiving any additional defenses, set-offs, counterclaims or other claims otherwise available to
such Guarantor. Each Guarantor agrees that each Noteholder shall have a lien for all the
Guarantor’s Obligations upon all deposits or deposit accounts, of any kind, or any interest in any
deposits or deposit accounts, now or hereafter pledged, mortgaged, transferred or assigned to such
Noteholder or otherwise in the possession or control of such Noteholder for any purpose (other than
solely for safekeeping) for the account or benefit of such Guarantor, including any balance of any
deposit account or of any credit of such Guarantor with the Noteholder, whether now existing or
hereafter established, and hereby authorizes each Noteholder from and after the occurrence of an
Event of Default at any time or times with or without prior notice to apply such balances or any
part thereof to such of the Guarantor’s Obligations to the Noteholders then due and in such amounts
as provided for in the Note Purchase Agreement or the Notes or otherwise as they may elect. For
the purposes of this Section 8, all remittances and property shall be deemed to be in the
possession of a Noteholder as soon as the same may be put in transit to it by mail or carrier or by
other bailee.

     9. Waiver of Notice; Subrogation.

     (a) Each Guarantor hereby waives to the extent permitted by law notice of the following
events or occurrences: (i) acceptance of this Guaranty Agreement; (ii) the incurrence from
time to time of any of the Guaranteed Liabilities, or any Noteholder’s entering into
arrangements with the Company, any Guarantor or any other Person giving rise to Guaranteed
Liabilities, whether pursuant to the Note Purchase Agreement or the Notes or any other
Related Agreement or any amendments, modifications, or supplements thereto, or replacements
or extensions thereof; (iii) presentment, demand, default, non-payment, partial payment and
protest; and (iv) any other event, condition, or occurrence described in Section 3
hereof. Each Guarantor agrees that each Noteholder may heretofore, now or at any time
hereafter do any or all of the foregoing in such manner, upon such terms and at such times
as each Noteholder, in its sole and absolute discretion, deems advisable, without in any way
or respect impairing, affecting, reducing or releasing such Guarantor from its Guarantor’s
Obligations, and each Guarantor hereby consents to each and all of the foregoing events or
occurrences.

     (b) Each Guarantor hereby agrees that payment by such Guarantor of its Guarantor’s
Obligations under this Guaranty Agreement may be enforced by the Noteholders or any of them
upon demand by the Noteholders or any of them to such

E-9.7-6

 

 

Guarantor without the Noteholders being required, such Guarantor expressly waiving to the
extent permitted by law any right it may have to require the Noteholders, to (i) prosecute
collection or seek to enforce or resort to any remedies against the Company or any other
Guarantor or any other guarantor of the Guaranteed Liabilities, or (ii) seek to enforce or
resort to any remedies with respect to any security interests, Liens or encumbrances granted
to or on behalf of the Noteholders or other party to a Related Agreement by the Company, any
other Guarantor or any other Person on account of the Guaranteed Liabilities or any guaranty
thereof, IT BEING EXPRESSLY UNDERSTOOD, ACKNOWLEDGED AND AGREED TO BY SUCH GUARANTOR THAT
DEMAND UNDER THIS GUARANTY AGREEMENT MAY BE MADE BY ANY NOTEHOLDER, AND THE PROVISIONS
HEREOF ENFORCED BY THE NOTEHOLDERS OR ANY OF THEM, EFFECTIVE AS OF THE FIRST DATE ANY EVENT
OF DEFAULT OCCURS AND IS CONTINUING UNDER THE NOTE PURCHASE AGREEMENT.

     (c) Each Guarantor further agrees with respect to this Guaranty Agreement that it shall
have no right of subrogation, reimbursement, contribution or indemnity, nor any right of
recourse to security for the Guaranteed Liabilities unless and until 93 days immediately
following the Note Termination Date (as defined below) shall have elapsed without the filing
or commencement, by or against the Company or any Guarantor, of any state or federal action,
suit, petition or proceeding seeking any reorganization, liquidation or other relief or
arrangement in respect of creditors of, or the appointment of a receiver, liquidator,
trustee or conservator in respect to, the Company or such Guarantor or its assets. This
waiver is expressly intended to prevent the existence of any claim in respect to such
subrogation, reimbursement, contribution or indemnity by any Guarantor against the estate of
the Company or any other Guarantor within the meaning of Section 101 of the Bankruptcy Code,
in the event of a subsequent case involving the Company or any other Guarantor. If an
amount shall be paid to any Guarantor on account of such rights at any time prior to
termination of this Guaranty Agreement in accordance with the provisions of Section
21 hereof, such amount shall be held in trust for the benefit of the Noteholders and
shall forthwith be paid to the Noteholders, to be credited and applied upon the Guarantors’
Obligations, whether matured or unmatured. The agreements in this subsection shall survive
repayment of all of the Guarantors’ Obligations, the termination or expiration of this
Guaranty Agreement in any manner, including but not limited to termination in accordance
with Section 21 hereof, and occurrence of the Note Termination Date. For purposes
of this Guaranty Agreement, “Note Termination Date” means the date as of which the
Company and the Guarantors shall have fully, finally and irrevocably paid and satisfied in
full in cash all of the Guaranteed Liabilities.

     10. Effectiveness; Enforceability. This Guaranty Agreement shall be effective as of
the date first above written and shall continue in full force and effect until termination in
accordance with Section 21 hereof. Any claim or claims that the Noteholders may at any
time

E-9.7-7

 

 

hereafter have against a Guarantor under this Guaranty Agreement may be asserted by the
Noteholders by written notice directed to such Guarantor in accordance with Section 23
hereof.

     11. Representations and Warranties. Each Guarantor warrants and represents to the
Noteholders, that:

     (a) it is duly authorized to execute and deliver this Guaranty Agreement (or the Guaranty
Joinder Agreement to which it is a party, as applicable), and to perform its obligations under this
Guaranty Agreement, that this Guaranty Agreement (or the Guaranty Joinder Agreement to which it is
a party, as applicable) has been duly executed and delivered on behalf of such Guarantor by its
duly authorized representatives;

     (b) this Guaranty Agreement (and any Guaranty Joinder Agreement to which such Guarantor is a
party) is legal, valid, binding and enforceable against such Guarantor in accordance with its terms
except as enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors’ rights generally and by general equitable
principles;

     (c) such Guarantor’s execution, delivery and performance of this Guaranty Agreement (and any
Guaranty Joinder Agreement to which such Guarantor is a party) do not violate or constitute a
breach of any of its charter or other organizational documents, any agreement or instrument to
which such Guarantor is a party, or any law, order, regulation, decree or award of any governmental
authority or arbitral body to which it or its properties or operations is subject; and

     (d) (i) the fair value of the business and assets of such Guarantor exceeds, as of and
immediately after giving effect to this Guaranty Agreement (and any Guaranty Joinder Agreement to
which such Guarantor is a party), the liabilities of such Guarantor as of such time,

          (ii) immediately after giving effect to this Guaranty Agreement (and any Guaranty Joinder
Agreement to which such Guarantor is a party), such Guarantor: (A) will not be engaged in any
business or transaction, or about to engage in any business or transaction, for which its assets
would constitute unreasonably small capital (within the meaning of the Uniform Fraudulent Transfer
Act, the Uniform Fraudulent Conveyance Act and section 548 of the Bankruptcy Code), or (B) will not
be unable to pay its debts as such debts mature, and

          (iii) such Guarantor is not entering into this Guaranty Agreement with any intent to hinder,
delay, or defraud either current creditors or future creditors of such Guarantor.

     12. Expenses. Each Guarantor agrees to be jointly and severally liable for the
payment of all reasonable fees and expenses, including the reasonable fees, expenses and
disbursements of counsel, incurred by any Noteholder in connection with the enforcement of
this Guaranty Agreement, whether or not suit be brought.

E-9.7-8

 

 

     13. Reinstatement. Each Guarantor agrees that this Guaranty Agreement shall continue
to be effective or be reinstated, as the case may be, at any time payment received by any
Noteholder in respect of any Guaranteed Liabilities is rescinded or must be restored for any
reason, or is repaid by any Noteholder in whole or in part in good faith settlement of any pending
or threatened avoidance claim.

     14. Intentionally Deleted.

     15. Reliance. Each Guarantor represents and warrants to the Noteholders, that: (a)
such Guarantor has adequate means to obtain on a continuing basis (i) from the Company, information
concerning the Company and each other Guarantor and the Company’s and each other Guarantor’s
financial condition and affairs and (ii) from other reliable sources, such other information as it
deems material in deciding to provide this Guaranty Agreement and any Guaranty Joinder Agreement
(“Other Information”), and has full and complete access to the Company’s and each other
Guarantor’s books and records and to such Other Information; (b) such Guarantor is not relying on
any Noteholder or its employees, directors, agents or other representatives or Affiliates, to
provide any such information, now or in the future; (c) such Guarantor has been furnished with and
reviewed the terms of the Note Purchase Agreement, Notes and such other Related Agreements as it
has requested, is executing this Guaranty Agreement (or the Guaranty Joinder Agreement to which it
is a party, as applicable) freely and deliberately, and understands the obligations and financial
risk undertaken by providing this Guaranty Agreement (and any Guaranty Joinder Agreement); (d) such
Guarantor has relied solely on the Guarantor’s own independent investigation, appraisal and
analysis of the Company, the Company’s financial condition and affairs, the Other Information, and
such other matters as it deems material in deciding to provide this Guaranty Agreement (and any
Guaranty Joinder Agreement) and is fully aware of the same; and (e) such Guarantor has not depended
or relied on any Noteholder or its employees, directors, agents or other representatives or
Affiliates, for any information whatsoever concerning the Company or the Company’s financial
condition and affairs or any other matters material to such Guarantor’s decision to provide this
Guaranty Agreement (and any Guaranty Joinder Agreement), or for any counseling, guidance, or
special consideration or any promise therefor with respect to such decision. Each Guarantor agrees
that no Noteholder has any duty or responsibility whatsoever, now or in the future, to provide to
such Guarantor any information concerning the Company or the Company’s financial condition and
affairs, or any Other Information, other than as expressly provided herein, and that, if such
Guarantor receives any such information from any Noteholder or its employees, directors, agents or
other representatives or Affiliates, such Guarantor will independently verify the information and
will not rely on any Noteholder or its employees, directors, agents or other representatives or
Affiliates, with respect to such information.

     16. Survival of Representations and Warranties. All representations and warranties
contained herein shall survive the delivery of documents and any extension of credit referred to
herein or guaranteed hereby.

E-9.7-9

 

 

     17. Entire Agreement. This Guaranty Agreement and each Guaranty Joinder Agreement,
together with the Note Purchase Agreement, the Notes and other Related Agreements, constitutes and
expresses the entire understanding between the parties hereto with respect to the subject matter
hereof, and supersedes all prior negotiations, agreements, understandings, inducements, commitments
or conditions, express or implied, oral or written, except as herein contained. The express terms
hereof control and supersede any course of performance or usage of the trade inconsistent with any
of the terms hereof. Except as provided in Section 21, neither this Guaranty Agreement nor
any Guaranty Joinder Agreement nor any portion or provision hereof or thereof may be changed,
altered, modified, supplemented, discharged, canceled, terminated, or amended orally or in any
manner other than as provided in the Note Purchase Agreement.

     18. Binding Agreement; Assignment. This Guaranty Agreement, each Guaranty Joinder
Agreement and the terms, covenants and conditions hereof and thereof, shall be binding upon and
inure to the benefit of the parties hereto and thereto, and to their respective heirs, legal
representatives, successors and assigns; provided, however, that no Guarantor shall
be permitted to assign any of its rights, powers, duties or obligations under this Guaranty
Agreement, any Guaranty Joinder Agreement or any other interest herein or therein without the prior
written consent of the Noteholders. Each Guarantor expressly acknowledges that each Noteholder may
sell, assign or otherwise transfer its Notes in accordance with the Note Purchase Agreement without
affecting the obligations of the Guarantors hereunder.

     19. Severability. The provisions of this Guaranty Agreement are independent of and
separable from each other. If any provision hereof shall for any reason be held invalid or
unenforceable, such invalidity or unenforceability shall not affect the validity or enforceability
of any other provision hereof, but this Guaranty Agreement shall be construed as if such invalid or
unenforceable provision had never been contained herein.

     20. Counterparts. This Guaranty Agreement may be executed in any number of
counterparts each of which when so executed and delivered shall be deemed an original, and it shall
not be necessary in making proof of this Guaranty Agreement to produce or account for more than one
such counterpart executed by the Guarantor against whom enforcement is sought.

     21. Termination. (a) Subject to reinstatement pursuant to Section 13 hereof,
this Guaranty Agreement and each Guaranty Joinder Agreement, and all of the Guarantors’ Obligations
hereunder (excluding those Guarantors’ obligations relating to Guaranteed Liabilities that
expressly survive such termination) shall terminate automatically and without further action on the
Note Termination Date.

     (b) In the event that a Guarantor shall cease to be a Subsidiary of the Company as a result
of a transaction permitted by the Note Purchase Agreement, the liability of such Subsidiary
hereunder shall terminate automatically and without further action upon the date that the

E-9.7-10

 

 

Company
delivers a certification thereof to the Noteholders together with a certification that no Default
or Event or Default is occurring on such date or will occur at the time of such release, and in
each of the foregoing cases such matters shall in fact be true and correct.

     22. Remedies Cumulative; Late Payments. All remedies hereunder are cumulative and are
not exclusive of any other rights and remedies of the Noteholders provided by law or under the Note
Purchase Agreement, the Notes or other applicable agreements or instruments. The purchase of the
Notes by the Noteholders shall be conclusively presumed to have been made in reliance upon each
Guarantor’s guaranty of the Guaranteed Liabilities pursuant to the terms hereof. Any amounts not
paid when due under this Guaranty Agreement shall bear interest at the Default Rate.

     23. Notices. Any notice required or permitted hereunder or under any Guaranty Joinder
Agreement shall be given, (a) with respect to each Guarantor, at the address of the Company
indicated in Section 18 of the Note Purchase Agreement and (b) with respect to the Noteholders, at
each Noteholder’s address indicated in Section 18 of the Note Purchase Agreement. All such
addresses may be modified, and all such notices shall be given and shall be effective, as provided
in Section 18 of the Note Purchase Agreement for the giving and effectiveness of notices and
modifications of addresses thereunder.

     24. Joinder. Each Person who shall at any time execute and deliver to the Noteholders
a Guaranty Joinder Agreement substantially in the form attached as Exhibit A hereto shall thereupon
irrevocably, absolutely and unconditionally become a party hereto and obligated hereunder as a
Guarantor, and all references herein and in the Note Purchase Agreement and Notes to the Guarantors
or to the parties to this Guaranty Agreement shall be deemed to include such Person as a Guarantor
hereunder.

     25. Governing Law; Venue; Waiver of Jury Trial.

     (a) THIS GUARANTY AGREEMENT AND EACH GUARANTY JOINDER AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS
EXECUTED, AND TO BE FULLY PERFORMED, IN SUCH STATE.

     (b) EACH GUARANTOR HEREBY EXPRESSLY AND IRREVOCABLY AGREES AND CONSENTS THAT ANY SUIT,
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS GUARANTY AGREEMENT OR ANY GUARANTY
JOINDER AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREIN OR THEREIN MAY BE
INSTITUTED IN ANY STATE OR FEDERAL COURT SITTING IN THE COUNTY OF NEW YORK, STATE OF NEW
YORK, UNITED STATES OF AMERICA AND, BY THE EXECUTION AND DELIVERY OF THIS

E-9.7-11

 

 

GUARANTY AGREEMENT
OR A GUARANTY JOINDER AGREEMENT, SUCH GUARANTOR EXPRESSLY WAIVES ANY OBJECTION THAT IT MAY
NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE IN, OR TO THE EXERCISE OF JURISDICTION OVER IT
AND ITS PROPERTY BY, ANY SUCH COURT IN ANY SUCH SUIT, ACTION OR PROCEEDING, AND EACH
GUARANTOR HEREBY IRREVOCABLY SUBMITS GENERALLY AND UNCONDITIONALLY TO THE NON-EXCLUSIVE
JURISDICTION OF ANY SUCH COURT IN ANY SUCH SUIT, ACTION OR PROCEEDING.

     (c) EACH GUARANTOR AGREES THAT SERVICE OF PROCESS MAY BE MADE BY PERSONAL SERVICE OF A
COPY OF THE SUMMONS AND COMPLAINT OR OTHER LEGAL PROCESS IN ANY SUCH SUIT, ACTION OR
PROCEEDING, OR BY REGISTERED OR CERTIFIED MAIL (POSTAGE PREPAID) TO THE ADDRESS FOR NOTICES
TO SUCH GUARANTOR IN EFFECT PURSUANT TO SECTION 23 HEREOF, OR BY ANY OTHER METHOD OF
SERVICE PROVIDED FOR UNDER THE APPLICABLE LAWS IN EFFECT IN THE STATE OF NEW YORK.

     (d) NOTHING CONTAINED IN SUBSECTIONS (b) or (c) HEREOF SHALL PRECLUDE THE NOTEHOLDERS
OR ANY OF THEM FROM BRINGING ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO
THIS GUARANTY AGREEMENT OR ANY GUARANTY JOINDER AGREEMENT IN THE COURTS OF ANY JURISDICTION
WHERE ANY GUARANTOR OR ANY OF SUCH GUARANTOR’S PROPERTY OR ASSETS MAY BE FOUND OR LOCATED.
TO THE EXTENT PERMITTED BY THE APPLICABLE LAWS OF ANY SUCH JURISDICTION, EACH GUARANTOR
HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY SUCH COURT AND EXPRESSLY
WAIVES, IN RESPECT OF ANY SUCH SUIT, ACTION OR PROCEEDING, OBJECTION TO THE EXERCISE OF
JURISDICTION OVER IT AND ITS PROPERTY BY ANY SUCH OTHER COURT OR COURTS WHICH NOW OR
HEREAFTER MAY BE AVAILABLE UNDER APPLICABLE LAW.

     (e) IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS OR REMEDIES UNDER OR
RELATED TO THIS GUARANTY AGREEMENT OR ANY GUARANTY JOINDER AGREEMENT OR ANY AMENDMENT,
INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR THAT MAY IN THE FUTURE BE DELIVERED IN
CONNECTION THEREWITH, EACH GUARANTOR AND BY THEIR ACCEPTANCE HEREOF, THE NOTEHOLDERS, HEREBY
AGREE, TO THE EXTENT PERMITTED BY
APPLICABLE LAW, THAT ANY SUCH ACTION, SUIT OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND
NOT BEFORE A JURY AND HEREBY IRREVOCABLY WAIVE, TO THE EXTENT PERMITTED BY

E-9.7-12

 

 

APPLICABLE LAW,
ANY RIGHT ANY SUCH PERSON MAY HAVE TO TRIAL BY JURY IN ANY SUCH ACTION, SUIT OR PROCEEDING.

     (f) EACH GUARANTOR HEREBY EXPRESSLY WAIVES ANY OBJECTION IT MAY HAVE THAT ANY COURT TO
WHOSE JURISDICTION IT HAS SUBMITTED PURSUANT TO THE TERMS HEREOF IS AN INCONVENIENT FORUM.

     IN WITNESS WHEREOF, the parties hereto have duly executed and delivered this Guaranty
Agreement as of the day and year first written above.

	 	 	 	 	 	 	 
	 	 	GUARANTORS:	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:
	 	 

	 	 
	 

	 	 	 	 

	 	 

E-9.7-13

 

 

EXHIBIT A TO FORM OF GUARANTY AGREEMENT

FORM OF GUARANTY JOINDER AGREEMENT

     THIS GUARANTY JOINDER AGREEMENT (the “Guaranty Joinder Agreement”), dated as of
               
     , 20___ is made by      
              
               
      , a         
             (the
“Joining Guarantor”), delivered to the Noteholders of the 6.03% Senior Notes due September
30, 2013 of Treehouse Foods, Inc. (the “Company”) issued pursuant to that certain Note
Purchase Agreement dated as of September 22, 2006, as may be amended, restated, or otherwise
modified from time to time (the “Note Purchase Agreement”) between the Company and the
institutions named on Schedule A thereto (such institutions, together with their successors,
assigns and any other future holder of the Notes, the “Noteholders”). All capitalized
terms not otherwise defined herein shall have the meanings given to such terms in the Note Purchase
Agreement.

     WHEREAS, the Joining Guarantor is a Subsidiary of the Company;

     WHEREAS, certain existing Subsidiaries of the Company have guaranteed the obligations of the
Company under the Note Purchase Agreement and Notes pursuant to that certain Guaranty Agreement
dated as of September 22, 2006 (the “Guaranty Agreement”), executed by the Subsidiaries
parties thereto for the benefit of the Noteholders; and

     WHEREAS, Section 9.7(a) of the Note Purchase Agreement specifies that any Subsidiary of the
Company may become a Guarantor under the Guaranty Agreement by execution and delivery of a joinder
agreement. Each of the undersigned Joining Guarantors is executing this Guaranty Joinder Agreement
in accordance with the requirements of the Note Purchase Agreement in order to become a Guarantor
under the Guaranty Agreement as consideration for the Notes previously purchased.

     NOW, THEREFORE, the Joining Guarantor hereby agrees as follows for the benefit of the
Noteholders:

     1. Joinder. The Joining Guarantor hereby irrevocably, absolutely and unconditionally
becomes a party to the Guaranty Agreement as a Guarantor and bound by all the terms, conditions,
obligations, liabilities and undertakings of each Guarantor or to which each Guarantor is subject
thereunder, including without limitation the joint and several, unconditional, absolute, continuing
and irrevocable guarantee to the Noteholders of the payment in full of the Guaranteed Liabilities
(as defined in the Guaranty Agreement) whether now existing or hereafter arising, all with the same
force and effect as if the Joining Guarantor were an original signatory to the Guaranty Agreement.

     2. Affirmations. The Joining Guarantor hereby acknowledges and affirms as of the date
hereof with respect to itself, its properties and its affairs each of the waivers, representations,
warranties, acknowledgements and certifications applicable to any Guarantor contained in the
Guaranty.

 

 

     3. Severability. The provisions of this Guaranty Joinder Agreement are independent of
and separable from each other. If any provision hereof shall for any reason be held invalid or
unenforceable, such invalidity or unenforceability shall not affect the validity or enforceability
of any other provision hereof, but this Guaranty Joinder Agreement shall be construed as if such
invalid or unenforceable provision had never been contained herein.

     4. Counterparts. This Guaranty Joinder Agreement may be executed in any number of
counterparts each of which when so executed and delivered shall be deemed an original, and it shall
not be necessary in making proof of this Guaranty Joinder Agreement to produce or account for more
than one such counterpart executed by the Joining Guarantor.

     5. Delivery. Joining Guarantor hereby irrevocably waives notice of acceptance of this
Guaranty Joinder Agreement and acknowledges that the Guaranteed Liabilities are and shall be deemed
to be incurred in reliance on this Guaranty Joinder Agreement and the Guarantor’s joinder as a
party to the Guaranty as herein provided.

     6. Governing Law; Venue; Waiver of Jury Trial. The provisions of Section 25
of the Guaranty are hereby incorporated by reference as if fully set forth herein.

     IN WITNESS WHEREOF, the Joining Guarantor has duly executed and delivered this Guaranty
Joinder Agreement as of the day and year first written above.

	 	 	 	 	 	 	 
	 	 	JOINING GUARANTOR:	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:

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