Document:

Exhibit 10.1(a)

 

EXECUTION COPY

 

AGREEMENT AND PLAN OF MERGER

 

among

 

VARIETAL DISTRIBUTION HOLDINGS, LLC,

 

VARIETAL DISTRIBUTION MERGER SUB, INC.,

 

and

 

CDRV INVESTORS, INC.

 

 

Dated as of May 2, 2007

 

 

	
  ARTICLE I

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  THE MERGER;
  CONVERSION OF SHARES; CANCELLATION OF CONVERTIBLE INSTRUMENTS

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  1.1

  	
  The Merger

  	
   

  	
  1

  
	
  1.2

  	
  Merger
  Consideration

  	
   

  	
  1

  
	
  1.3

  	
  Closing;
  Effective Time

  	
   

  	
  2

  
	
  1.4

  	
  Conversion
  of Shares

  	
   

  	
  3

  
	
  1.5

  	
  Cancellation
  of Company Options; Restricted and Deferred Stock Units

  	
   

  	
  4

  
	
  1.6

  	
  Certificate
  of Incorporation; By-Laws

  	
   

  	
  4

  
	
  1.7

  	
  Directors
  and Officers of the Surviving Corporation

  	
   

  	
  5

  
	
  1.8

  	
  Dissenting
  Stockholders

  	
   

  	
  5

  
	
  1.9

  	
  Paying Agent

  	
   

  	
  5

  
	
  1.10

  	
  Withholding
  Taxes

  	
   

  	
  7

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE II

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  REPRESENTATIONS
  AND WARRANTIES OF THE COMPANY

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  2.1

  	
  Corporate
  Status, etc

  	
   

  	
  8

  
	
  2.2

  	
  Capitalization

  	
   

  	
  8

  
	
  2.3

  	
  Conflicts,
  Consents

  	
   

  	
  9

  
	
  2.4

  	
  SEC Filings;
  Financial Statements; Certain Compliance Matters

  	
   

  	
  10

  
	
  2.5

  	
  Absence of
  Undisclosed Liabilities

  	
   

  	
  11

  
	
  2.6

  	
  Absence of
  Changes

  	
   

  	
  12

  
	
  2.7

  	
  Tax Matters

  	
   

  	
  12

  
	
  2.8

  	
  Litigation

  	
   

  	
  12

  
	
  2.9

  	
  Compliance
  with Laws; Permits

  	
   

  	
  13

  
	
  2.10

  	
  Employee
  Benefits

  	
   

  	
  13

  
	
  2.11

  	
  Labor
  Matters

  	
   

  	
  14

  
	
  2.12

  	
  Real
  Property; Tangible Property

  	
   

  	
  15

  
	
  2.13

  	
  Intellectual
  Property

  	
   

  	
  15

  
	
  2.14

  	
  Contracts

  	
   

  	
  16

  
	
  2.15

  	
  Insurance

  	
   

  	
  18

  
	
  2.16

  	
  Environmental
  Matters

  	
   

  	
  18

  
	
  2.17

  	
  Affiliate
  Transactions

  	
   

  	
  19

  
	
  2.18

  	
  Brokers

  	
   

  	
  19

  

 

i

 

	
  ARTICLE III

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  REPRESENTATIONS
  AND WARRANTIES OF PARENT AND MERGERCO

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  3.1

  	
  Company
  Status

  	
   

  	
  19

  
	
  3.2

  	
  Authorization,
  etc

  	
   

  	
  19

  
	
  3.3

  	
  No
  Conflicts; Consents

  	
   

  	
  19

  
	
  3.4

  	
  Litigation

  	
   

  	
  20

  
	
  3.5

  	
  Financing

  	
   

  	
  20

  
	
  3.6

  	
  Guarantee

  	
   

  	
  21

  
	
  3.7

  	
  Brokers

  	
   

  	
  21

  
	
  3.8

  	
  Formation of
  MergerCo; No Prior Activities

  	
   

  	
  21

  
	
  3.9

  	
  No Knowledge
  of Misrepresentations or Omissions

  	
   

  	
  22

  
	
  3.10

  	
  Certain
  Acquisitions

  	
   

  	
  22

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IV

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  COVENANTS

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  4.1

  	
  Conduct of
  the Company and its Subsidiaries

  	
   

  	
  22

  
	
  4.2

  	
  Satisfaction
  of Closing Conditions; Filings

  	
   

  	
  25

  
	
  4.3

  	
  Access and
  Information

  	
   

  	
  26

  
	
  4.4

  	
  Contact with
  Customers, Suppliers, etc

  	
   

  	
  27

  
	
  4.5

  	
  Publicity

  	
   

  	
  27

  
	
  4.6

  	
  Employee
  Matters

  	
   

  	
  27

  
	
  4.7

  	
  Transfer
  Taxes

  	
   

  	
  28

  
	
  4.8

  	
  Indemnification
  of Directors and Officers

  	
   

  	
  28

  
	
  4.9

  	
  Financing

  	
   

  	
  29

  
	
  4.10

  	
  Resignations

  	
   

  	
  30

  
	
  4.11

  	
  Exclusive
  Dealing

  	
   

  	
  31

  
	
  4.12

  	
  Financial
  Statements and Other Information

  	
   

  	
  31

  
	
  4.13

  	
  Affidavit

  	
   

  	
  31

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE V

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  CONDITIONS
  TO CLOSING

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  5.1

  	
  Conditions to
  the Obligations of the Company, Parent and MergerCo

  	
   

  	
  31

  
	
  5.2

  	
  Conditions
  to the Obligation of Parent and MergerCo

  	
   

  	
  32

  
	
  5.3

  	
  Conditions
  to the Obligation of the Company

  	
   

  	
  32

  

 

ii

 

	
  ARTICLE VI

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  NO SURVIVAL
  OF REPRESENTATIONS, WARRANTIES AND COVENANTS

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  6.1

  	
  No Survival
  of Representations, Warranties and Covenants

  	
   

  	
  33

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VII

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  TERMINATION

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  7.1

  	
  Termination

  	
   

  	
  33

  
	
  7.2

  	
  Effect of
  Termination

  	
   

  	
  34

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VIII

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  DEFINITIONS
  AND INTERPRETATION

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  8.1

  	
  Definition
  of Certain Terms; Interpretation

  	
   

  	
  35

  
	
  8.2

  	
  Disclosure
  Letter

  	
   

  	
  45

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IX

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  GENERAL
  PROVISIONS

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  9.1

  	
  Expenses

  	
   

  	
  45

  
	
  9.2

  	
  Further
  Actions

  	
   

  	
  46

  
	
  9.3

  	
  Certain
  Limitations

  	
   

  	
  46

  
	
  9.4

  	
  Notices

  	
   

  	
  46

  
	
  9.5

  	
  Binding
  Effect

  	
   

  	
  48

  
	
  9.6

  	
  Assignment;
  Successors

  	
   

  	
  48

  
	
  9.7

  	
  Amendment;
  Waivers, etc

  	
   

  	
  48

  
	
  9.8

  	
  Entire
  Agreement

  	
   

  	
  48

  
	
  9.9

  	
  Severability

  	
   

  	
  48

  
	
  9.10

  	
  Headings

  	
   

  	
  49

  
	
  9.11

  	
  Counterparts

  	
   

  	
  49

  
	
  9.12

  	
  Governing
  Law

  	
   

  	
  49

  
	
  9.13

  	
  Consent to
  Jurisdiction, etc

  	
   

  	
  49

  
	
  9.14

  	
  Waiver of
  Punitive and Other Damages and Jury Trial

  	
   

  	
  50

  
	
  9.15

  	
  Specific
  Performance

  	
   

  	
  50

  

 

iii

 

EXHIBITS

 

Exhibit A                Form of Guarantee

 

iv

 

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

 

R  E  C  I  T
A  L  S:

 

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

 

B.            On
or prior to the date hereof, Parent, acting as the sole stockholder of
MergerCo, has approved the Merger, and immediately after the entry into this
Agreement, the Company will obtain the Requisite Consent of Stockholders
approving the Merger, upon the terms and subject to the conditions set forth in
this Agreement.

 

NOW, THEREFORE, the parties hereto agree as follows:

 

ARTICLE I

 

THE MERGER; CONVERSION OF SHARES;

CANCELLATION OF CONVERTIBLE INSTRUMENTS

 

1.1           The
Merger. Upon the terms and subject to the conditions of this Agreement and
in accordance with the applicable provisions of the Delaware General
Corporation Law (the “DGCL”), at the Effective Time, MergerCo shall be
merged with and into the Company and the separate corporate existence of
MergerCo shall cease. After the Merger, the Company shall continue as the
surviving corporation (sometimes hereinafter referred to as the “Surviving
Corporation”) and shall continue to be governed by the Laws of the State of
Delaware. The Merger shall have the effect as provided in the applicable
provisions of the DGCL. Without limiting the generality of the foregoing, at
the Effective Time, all the rights, privileges, immunities, powers and
franchises of the Company and MergerCo shall vest in the Surviving Corporation
and all restrictions, obligations, duties, debts and liabilities of the Company
and MergerCo shall be the restrictions, obligations, duties, debts and
liabilities of the Surviving Corporation.

 

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

 

 

1.3           Closing;
Effective Time.

 

(a)           The closing of the Merger (the “Closing”)
shall take place at the offices of Debevoise & Plimpton LLP, 919 Third
Avenue, New York, New York, at 10:00 a.m., New York time on the third Business
Day following the satisfaction or waiver of the conditions set forth in
Article V (other than conditions which, by their nature, are to be
satisfied at the Closing, but subject to the satisfaction or waiver of those
conditions), or at such other place, time and date as the parties may agree; provided
that, notwithstanding the satisfaction or waiver of the conditions set forth in
Article V, (i) Parent and MergerCo will not be required to effect the
Closing until the final day of the Marketing Period and (ii) the Company
shall not be required to effect the Closing during the Marketing Period without
at least five Business Days’ notice specified by Parent. The “Closing Date”
shall be the date upon which the Closing occurs.

 

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

 

(c)           Subject to the terms and conditions
of this Agreement, at the Effective Time, MergerCo shall pay (or cause to be
paid) to the Company an amount equal to the Equity Consideration plus the Closing Debt Repayment Amount, by
wire transfer of immediately available funds. The Company or the Surviving
Corporation shall subsequently make the following payments (based on the amounts set
forth in a certificate delivered by the Company as provided in the last
paragraph of this Section 1.3(c)):

 

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

 

(ii)           at or immediately prior to the
Effective Time, the Company shall pay the Transaction Expenses by wire transfer
of immediately available funds; and

 

(iii)          at or immediately after the Effective
Time, the Surviving Corporation shall pay to the Paying Agent the Equity
Consideration (less the amounts payable pursuant to Section 1.5).

 

2

 

In order to facilitate the payments contemplated by
this Section 1.3(c), Section 1.5 and Section 1.9(b), the Company will
deliver to Parent and to MergerCo not less than two Business Days prior to the
anticipated Closing Date a statement, certified by the chief financial officer
of the Company, that will set forth:  (1) the
Equity Consideration, (2) the Closing Debt Repayment Amount, (3) the
Transaction Expenses, (4) the aggregate Option Cancellation Payments
payable to the holders of Company Options pursuant to Section 1.5(a) and
the aggregate amount payable to the holders of RSUs and DSUs pursuant to
Section 1.5(b), (5) the Per Share Merger Consideration and (6)
the estimated amount of cash and cash equivalents of the Company and its
Subsidiaries as of the Closing Date. Such statement shall also set forth the
wire transfer or other payment instructions with respect to the payments to be
made pursuant to Sections 1.3(c)(i), 1.3(c)(ii)and 1.3(c)(iii). All of the
calculations and amounts set forth in such statement shall be deemed to be
conclusive and binding on the parties absent manifest error.

 

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

 

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

 

(b)           All shares of Company Stock that are
held by the Company as treasury stock or owned by Parent or MergerCo
immediately prior to the Effective Time shall be canceled and retired and shall
cease to exist and no Per Share Merger Consideration shall be delivered in exchange
therefor.

 

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

 

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

 

3

 

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

 

1.5           Cancellation
of Company Options; Restricted and Deferred Stock Units. At the Effective
Time, by virtue of the Merger and without any action on the part of the holders
thereof:

 

(a)           each outstanding Company Option under
the Stock Plan shall be canceled in exchange for a single lump sum cash
payment, which the Surviving Corporation shall pay as soon as practicable, but in no event more than five
days following the Effective Time, equal to (x) the excess,
if any, of the Per Share Merger Consideration over the Exercise Price per share
of such Company Option, multiplied by (y) the
number of shares of Company Stock covered by such Company Option immediately
prior to the Effective Time (the “Option Cancellation Payment”), it
being understood that any unvested Company Options shall become fully vested in
accordance with their terms as a result of the Merger; and

 

(b)           each outstanding restricted stock
unit granted under the Stock Plan (the “RSUs”) and deferred share units
granted under the Stock Plan (the “DSUs”) shall be converted into the
right to receive the Per Share Merger Consideration, which the Surviving
Corporation shall pay as soon as practicable, but in no event more than five
days following the Effective Time, it being understood that any unvested
RSUs shall become fully vested in accordance with their terms as a result of
the Merger. Such RSUs and DSUs, when converted, shall no longer be outstanding
and shall automatically be canceled and retired and shall cease to exist, and
each holder thereof shall cease to have any rights with respect thereto, except
the right to receive the Per Share Merger Consideration as provided in the
prior sentence.

 

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

 

1.6           Certificate
of Incorporation; By-Laws.

 

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

 

(b)           The by-laws of MergerCo as in effect
immediately prior to the Effective Time shall be the by-laws of the Surviving
Corporation until thereafter duly amended as

 

4

 

provided by
applicable Law, the certificate of incorporation of the Surviving Corporation
and such by-laws.

 

1.7           Directors
and Officers of the Surviving Corporation.

 

(a)           The directors of MergerCo immediately
prior to the Effective Time shall, from and after the Effective Time, be the
directors of the Surviving Corporation until their successors shall have been
duly elected or appointed and qualified or until their earlier death,
resignation or removal in accordance with the Surviving Corporation’s
certificate of incorporation and by-laws.

 

(b)           The officers of the Company
immediately prior to the Effective Time shall be the initial officers of the
Surviving Corporation and shall hold office until their respective successors
are duly elected or appointed and qualified, or until their earlier death,
resignation or removal.

 

1.8           Dissenting
Stockholders.

 

(a)           Notwithstanding anything in this
Agreement to the contrary, any issued and outstanding shares of Company Stock
held by a Person (a “Dissenting Stockholder”) who has not voted to adopt
this Agreement and who properly demands appraisal for such shares in accordance
with Section 262 of the DGCL (“Dissenting Shares”) shall not be
converted as described in Section 1.4, but shall, as of the Effective
Time, be converted into the right to receive such consideration as may be
determined to be due to such Dissenting Stockholder pursuant to
Section 262 of the DGCL, unless such holder fails to perfect or withdraws
or otherwise loses his right to appraisal. If, after the Effective Time, such
Dissenting Stockholder fails to perfect or withdraws or loses his right to
appraisal, such Dissenting Stockholder’s shares of Company Stock shall no
longer be considered Dissenting Shares for the purposes of this Agreement and
such holder’s shares of Company Stock shall thereupon be deemed to have been
converted, at the Effective Time, as described in Section 1.4.

 

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

 

1.9           Paying
Agent.

 

(a)           Notices to Stockholders. As
promptly as practicable after the date hereof, the Company shall, or shall
cause the Paying Agent to, mail to each holder of record of Company Stock on
the applicable record date (i) the notices required by
Section 228(e) of

 

5

 

the DGCL in
connection with having obtained the Requisite Consent of Stockholders approving
the Merger, including an information statement (which shall be subject to
Parent’s prior approval, such approval not to be unreasonably withheld)
describing in reasonable detail the Merger and this Agreement and the
transactions contemplated hereby, (ii) the notice to stockholders
of their appraisal rights required under Section 262(d)(2) of the DGCL, (iii) with
respect to holders of certificated shares, a letter of transmittal specifying
that delivery shall be effected, and risk of loss of any Certificates shall
pass, only upon delivery of the Certificates to the Paying Agent, which letter
shall be in customary form and have such other provisions as the Company may
reasonably specify (which shall be subject to Parent’s prior approval, such
approval not to be unreasonably withheld) (the “Letter of Transmittal”),
(iv) instructions for effecting the surrender of any such Certificates
for payment and (v) a request for wire transfer or other payment
instructions to be used in the payment of the Per Share Merger Consideration to
such holder.

 

(b)           Letters of Transmittal; Payment.
The Letter of Transmittal shall specify that in the event of a termination of
this Agreement prior to the Closing, pursuant to Section 7.1 or otherwise,
the Paying Agent shall return any Certificates in its possession to the holder
of record. Promptly at or after the Effective Time (in the case of certificated
shares, upon surrender of a Certificate to the Paying Agent together with the
applicable transmittal documents, duly executed and completed in accordance
with the instructions thereto), the Paying Agent shall pay the holder of such
shares of Company Stock (other than the holders of Dissenting Shares) in
exchange therefor (in accordance with such holder’s payment instructions) the
Per Share Merger Consideration multiplied by the number of shares represented
by such Certificate or held by such holder of Company Stock in uncertificated
form, without any interest thereon. In the event of a transfer of ownership of
shares of Company Stock that is not registered in the transfer records of the
Company, payment may be made with respect to such shares to such a transferee
if all documents are presented to the Paying Agent required to evidence and
effect such transfer and to evidence that any applicable stock transfer taxes
have been paid (including, in the case of certificated shares, the Certificates
representing such shares).

 

(c)           Share Transfer Books. At and
after the Effective Time, there shall be no transfers on the share transfer
books of the Company of any shares of Company Stock that were outstanding
immediately prior to the Effective Time. If, after the Effective Time,
Certificates of the Company are presented to the Surviving Corporation, they
shall be cancelled and the shares of Company Stock represented thereby shall be
converted as provided in Section 1.4.

 

(d)           Unclaimed Consideration. Six
months after the Effective Time, the Surviving Corporation shall cause the
Paying Agent to deliver any portion of the Per Share Merger Consideration that
it holds and that remains unclaimed to the Surviving Corporation. Any holder of
Company Stock immediately prior to the Effective Time

 

6

 

who has not
theretofore complied with this Section 1.9 shall thereafter look only to
the Surviving Corporation (subject to abandoned property, escheat or other
similar Laws) for payment of any portion of the Per Share Merger Consideration
that may be payable upon surrender of any Certificates or in respect of any
uncertificated Company Stock such holder holds, as determined pursuant to this
Agreement, as a general creditor and without any interest thereon.

 

(e)           No Liability. None of the
Company, the Surviving Corporation, Parent and their Affiliates, the Paying
Agent or any other Person shall be liable for any amount properly delivered to
a public official pursuant to applicable abandoned property, escheat or similar
Laws.

 

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

 

1.10         Withholding
Taxes. The Paying Agent shall be entitled to deduct and withhold from the
Per Share Merger Consideration, and the Surviving Corporation shall deduct and
withhold, or cause to be deducted or withheld, from any payment made pursuant
to Section 1.5, any such amounts required to be deducted and withheld under the
Code, or any applicable provision of U.S. federal, state, local or foreign Tax
law. To the extent that amounts are so deducted and withheld, such deducted and
withheld amounts shall be treated for all purposes of this Agreement as having
been paid to the holders of Company Stock or of the award in respect of which
such deduction and withholding was made.

 

ARTICLE II

 

REPRESENTATIONS AND WARRANTIES

OF THE COMPANY

 

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

 

7

 

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

 

2.1           Corporate
Status, etc.

 

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

 

(b)           Authorization, etc. The
Company has full power and authority to enter into this Agreement and to
perform its obligations hereunder. The execution, delivery and performance by
the Company of this Agreement have been duly authorized by the board of
directors of the Company and will be duly authorized by the Requisite Consent
of Stockholders immediately after the entry into this Agreement, which
constitute all requisite corporate authorization on the part of the Company for
such action. This Agreement has been duly executed and delivered by the Company
and constitutes the valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms, except as limited by Laws
affecting the enforcement of creditors’ rights generally or by general
equitable principles. The Company has provided Parent with complete and correct
copies of its certificate of incorporation and by-laws.

 

2.2           Capitalization.

 

(a)           The Company. As of the date
hereof, the authorized capital stock of the Company consists of 7,000,000
shares of Company Stock, all of which have been duly authorized, of which
5,786,464.43 shares have been validly issued and are outstanding. Schedule
2.2(a) of the Disclosure Letter sets forth, as of the date hereof, all Persons
owning of record any outstanding shares of Company Stock and the number of such
shares owned by such Person.

 

(b)           Subsidiaries. All issued and
outstanding shares of capital stock of the Company’s Subsidiaries have been duly
authorized and validly issued, are fully paid and nonassessable and are owned
by the Persons listed in Schedule 2.2(b) of the Disclosure Letter free and
clear of any Liens other than restrictions on transfer imposed by applicable
Laws.

 

8

 

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

 

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

 

(e)           Equity Interests. Except for
the Subsidiaries, the Company does not own any capital stock of or other equity
securities or interests in any other Person. The Company is not a party to any
stockholder agreements, voting trusts or other agreements or understandings
relating to the voting, purchase, redemption or other acquisition of any shares
of capital stock or equity interests in any other Person.

 

2.3           Conflicts,
Consents.

 

(a)           Conflicts. The execution and
delivery of this Agreement by the Company, and the performance of its
obligations hereunder (i) do not conflict with the organizational
documents of the Company or any of its Subsidiaries, (ii) subject
to obtaining the Consents referred to in Section 2.3(b) and to the
accuracy of the representation and warranty of Parent and MergerCo contained in
Section 3.10, do not conflict with, violate, breach or result in a default
under (with or without the giving of notice or the lapse of time), give rise to
a right of termination, cancellation, modification or acceleration of any
obligation or to the loss of any benefit under, any Permit or any Contract to
which the Company or any of its Subsidiaries is a party or by which any of them
or their respective properties or assets are bound or result in the creation or
imposition of any Liens other than Liens created by or resulting from the
actions of Parent, MergerCo or any of their Affiliates, or (iii) violate
any Law applicable to the

 

9

 

Company or any of
its Subsidiaries, except in the case of clauses (ii) or (iii) for such
conflicts, violations, breaches, defaults, terminations, cancellations,
modifications, accelerations, losses of benefits and Liens that, individually
or in the aggregate, would not reasonably be expected to have a Material
Adverse Effect.

 

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

 

2.4           SEC
Filings; Financial Statements; Certain Compliance Matters.

 

(a)           SEC Filings. The Company and
its Subsidiaries have filed with the SEC all forms, reports, schedules,
declarations, statements, applications and other documents required to be filed
by them since December 31, 2005 under the Securities Act or the Exchange
Act (all forms, reports, schedules, declarations, statements, applications and
other documents filed by them with the SEC under the Exchange Act since
December 31, 2005, collectively, the “SEC Filings”). As of their
respective filing dates (or, if amended prior to the date of this Agreement, as
of the respective filing date of such amendment), the SEC Filings complied in all
material respects with the requirements of the Securities Act or the Exchange
Act, as the case may be, each as in effect on the date so filed, and at the
time filed with the SEC (or, if amended prior to the date of this Agreement, as
of the respective filing date of such amendment), none of the SEC Filings
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
therein, in light of the circumstances under which they were made, not
misleading. As of the date of this Agreement, there are no outstanding or
unresolved comments in comment letters received from the SEC staff with respect
to the SEC Filings. To the Knowledge of the Company, none of the SEC Filings is
the subject of ongoing SEC review.

 

(b)           Financial Statements. The
audited and unaudited financial statements of the Company (including any notes
thereto) included in the SEC Filings (if amended prior to the date of this
Agreement, as amended) (the “Financial Statements”), when filed,
complied in all material respects with the then applicable accounting
requirements and the published rules and regulations of the SEC with respect
thereto, have been prepared in accordance with GAAP (except in the case of the unaudited
statements, as permitted by Form 10-Q and Regulation S-X under the
Exchange Act) applied on a consistent basis during the periods involved (except
as may be indicated in the notes thereto) and fairly present in all material
respects the consolidated financial position of the Company and its
consolidated Subsidiaries as at the respective dates thereof and the
consolidated results of their operations and their consolidated cash flows for
the periods indicated (subject, in the

 

10

 

case of unaudited
quarterly statements, to normal year-end audit adjustments and to any other
adjustments described therein, which were not and are not expected to be
material in amount to the Company and its Subsidiaries taken as a whole).

 

(c)           Certain Compliance Matters.

 

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

 

(ii)           The Company’s system of “internal
control over financial reporting” (as defined in Rule 15d-15(f) under the
Exchange Act) is reasonably sufficient in all material respects to provide
reasonable assurance (x) that transactions are recorded as
necessary to permit preparation of financial statements in accordance with
GAAP, (y) that receipts and expenditures are being made only in
accordance with the authorization of management of the Company and (z) regarding
prevention or timely detection of unauthorized acquisition, use or disposition
of the Company’s assets that could have a material effect on the Company’s
financial statements.

 

(iii)          The Company’s “disclosure controls and
procedures” (as defined in Rule 15d-15(e) under the Exchange Act) are
reasonably designed in all material respects to ensure that (x) information
required to be disclosed by the Company in the reports that it files or submits
under the Exchange Act is recorded, processed, summarized and reported within
the time periods specified in the rules and forms of the SEC and (y) all
such information is accumulated and communicated to the Company’s management as
appropriate to allow timely decisions regarding required disclosure and to make
the certifications of the principal executive officer and principal financial
officer of the Company required under the Exchange Act with respect to such
reports.

 

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

 

2.5           Absence
of Undisclosed Liabilities. Except (i) as reflected or reserved
against on the Company’s consolidated balance sheet for the fiscal year ended
December 31, 2006, or the notes thereto, included in the Financial
Statements, (ii) for

 

11

 

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

 

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

 

2.7           Tax
Matters. Except as reserved against in the Financial Statements, and for
matters that, individually or in the aggregate, would not reasonably be
expected to have Material Adverse Effect, (a) each Tax Return
required to have been filed by the Company or any of its Subsidiaries has been
filed and is true and correct, (b) all Taxes of the Company and the
Subsidiaries which are due and payable (whether or not shown as due and payable
on any Tax Returns) have been paid or are being contested in good faith through
appropriate proceedings and for which adequate reserves have been established
in the Financial Statements, (c) all Employment and Withholding
Taxes required to be paid or withheld by or on behalf of the Company or any of
its Subsidiaries have been paid or properly set aside in accounts for such
purpose, (d) no written agreement or other document extending, or
having the effect of extending, the period of assessment or collection of any
Taxes payable by the Company or any of its Subsidiaries is in effect as of the
date hereof, (e) neither the Company nor any of its Subsidiaries
is, as of the date hereof, the beneficiary of any extension of time (other than
an automatic extension of time not requiring the consent of the IRS or any
other taxing authority) within which to file any Tax Return not previously
filed and (f) as of the date hereof, there are not pending any
audits, claims, examinations or other proceedings in respect of Taxes payable
by the Company or any of its Subsidiaries.

 

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

 

12

 

reasonably be expected to
have a Material Adverse Effect or (b) question the validity of this
Agreement or any action taken or to be taken by the Company or any of its
Subsidiaries in connection herewith.

 

2.9           Compliance
with Laws; Permits.

 

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

 

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

 

(c)           This Section 2.9 does not relate
to tax matters, employee benefits matters or environmental matters, which are
provided for in Sections 2.7, 2.10 and 2.16, respectively.

 

2.10         Employee
Benefits.

 

(a)           Company Benefit Plans; Employment
Agreements. Schedule 2.10(a)(i) of the Disclosure Letter lists each
material Plan that is maintained or established by the Company or any of its
Subsidiaries and under which any current or former officer, director or
employee of the Company or any of its Subsidiaries, or the beneficiaries or
dependents of any such person, is or will become eligible to participate or
derive a benefit (the “Company Benefit Plans”). Schedule 2.10(a)(ii) of
the Disclosure Letter lists each written employment, severance and retention
agreement other than any such agreement (i) that, by its terms, may
be terminated or canceled by the Company or any Subsidiary with notice of not
more than the greater of 120 days and the period of notice required under
applicable Law, in each case without penalty and (ii) providing for
the payment of annual salary and bonus or severance payments less than $350,000
in any one case (the “Company Employment Agreements”).

 

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

 

13

 

(i) the
most recent Plan document and all amendments thereto; (ii) the most
recent Form 5500 filed with the IRS; (iii) the most recent
summary plan description; and (iv) the most recent determination
letter issued by the IRS. The Company has made available to Parent copies of
the Company Employment Agreements.

 

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

 

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

 

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

 

(f)            Triggering Events. Except as
set forth on Schedule 2.10(f) of the Disclosure Letter, neither the execution
of this Agreement nor the performance of the obligations hereunder by the
Company or its Subsidiaries shall by itself require a payment, or cause the
accelerated vesting of a right to a payment, under any Company Benefit Plan or
under any Company Employment Agreement. The performance of the obligations
hereunder by the Company or its Subsidiaries will not result in any payment
under any Company Benefit Plan or under any Company Employment Agreement to any
employee, officer, or director of the Company or its Subsidiaries that would
constitute an “excess parachute payment” for purposes of Section 280G or
4999 of the Code.

 

2.11         Labor
Matters. No labor strike, labor dispute, or concerted work stoppage is
currently pending or, to the Knowledge of the Company, threatened with respect
to any Employee of the Company or its Subsidiaries, except as would not
reasonably be expected, individually or in the aggregate, to have a Material
Adverse Effect. The Company and its Subsidiaries are in compliance with all applicable
labor Laws in connection with the employment of their Employees, except for
such non-compliance

 

14

 

that, individually or in
the aggregate, would not reasonably be expected to have a Material Adverse Effect.
Except as set forth on Schedule 2.11 of the Disclosure Letter, the Company is
neither party to nor bound by any Contract or other agreement with any labor
union representing its Employees or collective bargaining agreement and, to the
Knowledge of the Company, there are no activities or proceedings of any labor
union to organize any such Employees.

 

2.12         Real
Property; Tangible Property.

 

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

 

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

 

(c)           Schedule 2.12(c) of the Disclosure
Letter contains a complete and correct list of all real property leases
relating to the Leased Real Property to which the Company or any of its
Subsidiaries is a party or is bound (the “Leases”). The Company has made
available to Parent correct and complete copies of the Leases. Each of the
Leases (including any option to purchase contained therein) is in full force
and effect and, to the Knowledge of the Company, is enforceable against the
landlord which is party thereto in accordance with its terms, and there exists
no default or event of default (or any event that with notice or lapse of time
or both would become a default) on the part of the Company or any of its
Subsidiaries under any Leases, except for such failures to be in full force and
effect and defaults as, individually or in the aggregate, would not reasonably
be expected to have a Material Adverse Effect.

 

2.13         Intellectual
Property.

 

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

 

15

 

(i) to
the Knowledge of the Company, the use of the Owned Intellectual Property by the
Company and its Subsidiaries as currently used does not infringe on the
Intellectual Property rights of any Person and (ii) there is no
claim or demand of any Person pertaining to, or any proceeding that is pending
or, to the Knowledge of the Company, threatened that challenges the rights of
the Company or any of its Subsidiaries in respect of, any Owned Intellectual
Property.

 

(b)           Schedule 2.13(b) of the Disclosure
Letter lists, as of the date hereof, all material written licenses to
Intellectual Property (other than licenses for “off-the-shelf” software) to
which the Company or any of its Subsidiaries is a party, pursuant to which (i) the
Company or such Subsidiary permits any Person to use any of the Owned
Intellectual Property owned by the Company or such Subsidiary, or (ii) any
Person permits the Company or such Subsidiary to use any Intellectual Property
not owned by the Company or such Subsidiary that are necessary for the conduct
of the business of the Company or any of its Subsidiaries as conducted on the
date hereof (collectively, the “Licenses”). The Company has made
available to Parent copies of all of the Licenses. Neither the Company nor any
of its Subsidiaries, nor, to the Knowledge of the Company, any other party
thereto, is in default under any License, and each License is in full force and
effect as to the Company or Subsidiary thereof party thereto and, to the
Knowledge of the Company, as to each other party thereto, except for such
defaults and failures to be so in full force and effect as, individually or in
the aggregate, would not have a Material Adverse Effect.

 

2.14         Contracts.
Schedule 2.14 of the Disclosure Letter lists, as of the date hereof, all Listed
Contracts. The term “Listed Contracts” means all of the following types
of Contracts to which the Company or any of its Subsidiaries is a party or by
which the Company or any of its Subsidiaries or any of their respective
properties is bound as of the date hereof (other than organizational documents
of any of the Subsidiaries, agreements related to employee benefits, agreements
related to labor matters, real property leases and agreements related to
intellectual property, the last four of which are provided for solely in
Sections 2.10, 2.11, 2.12 and 2.13, respectively):

 

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

 

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

 

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

 

16

 

(d)           any agreement containing a
non-competition provision materially limiting the ability of the Company and
its Subsidiaries, taken as a whole, to compete in any line of business or
geographical area;

 

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

 

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

 

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

 

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

 

(i)            any other Contract (except for
Supply Contracts and Customer Contracts), entered into other than in the
ordinary course of business pursuant to which the Company and its Subsidiaries
made or received payments in excess of $1,000,000 during 2006 or reasonably
expect to make or receive payments in excess of such amount during 2007.

 

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

 

17

 

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

 

2.15        Insurance.
Schedule 2.15 of the Disclosure Letter lists all of the material policies of
insurance currently maintained by or for the benefit of the Company or its
Subsidiaries.

 

2.16        Environmental
Matters. Except as, individually or in the aggregate, would not reasonably
be expected to have a Material Adverse Effect:

 

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

 

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

 

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

 

(d)           no judicial proceeding or
governmental or administrative action is pending under any applicable
Environmental Law pursuant to which the Company or any of its Subsidiaries is
named as a party; and

 

(e)           neither the Company nor any of its
Subsidiaries has entered into any agreement with any Governmental Entity
pursuant to which the Company or any of its Subsidiaries has any continuing
obligations with respect to the remediation of any condition resulting from the
release or threatened release of Hazardous Substances.

 

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

 

18

 

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

 

2.18         Brokers.
Other than with respect to Persons whose fees and expenses will be paid
pursuant to Section 1.3(c)(ii), all negotiations relating to this
Agreement and the transactions contemplated hereby have been carried out
without the intervention of any Person acting on behalf of the Company in such
manner as to give rise to any valid claim against Parent, MergerCo or the
Surviving Corporation for any brokerage or finder’s commission, fee or similar
compensation.

 

ARTICLE III

 

REPRESENTATIONS AND WARRANTIES OF

PARENT AND MERGERCO

 

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

 

3.1           Company
Status. Parent is a limited liability company duly organized, validly
existing and in good standing under the Laws of the state of Delaware. MergerCo
is a corporation duly incorporated, validly existing and in good standing under
the Laws of the state of Delaware.

 

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

 

3.3           No
Conflicts; Consents.

 

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

 

19

 

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

 

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

 

3.4           Litigation.
There is no judicial or administrative action, claim, suit, proceeding or
investigation pending or, to the knowledge of Parent or MergerCo, threatened
against Parent or MergerCo, in each case before any Governmental Entity, that
questions the validity of this Agreement or any action taken or to be taken by
Parent or MergerCo in connection herewith.

 

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

 

20

 

being collectively
referred to as the “Financing”). Subject to its terms and conditions,
the Financing, when funded in accordance with the Equity Commitment Letter and
the Debt Commitment Letters, will provide Parent and MergerCo with financing
sufficient to pay the amounts to be paid by MergerCo pursuant to Section 1.3(c)
and all of Parent and MergerCo’s fees and expenses associated with the
transactions contemplated by this Agreement and the Financing. Each of the
Equity Commitment Letter and the Debt Commitment Letters, in the form so
delivered, is valid, binding and in full force and effect and no event has
occurred which, with or without notice, lapse of time or both, would reasonably
be expected to constitute a default or breach on the part of Parent or MergerCo
under any term or condition of the Equity Commitment Letter or the Debt
Commitment Letters. There are no conditions precedent or other contingencies
related to the funding of the full amount of the Financing other than as
specifically set forth in the Equity Commitment Letter and the Debt Commitment
Letters. Parent and MergerCo have no reason to believe that any of the
conditions to the Financing will not be satisfied on a timely basis. Parent and
MergerCo have fully paid any and all commitment fees and other fees required by
the Debt Commitment Letters to be paid as of the date hereof. Assuming no
default by the Debt Financing Sources in respect of the Debt Financing, Parent
and MergerCo shall have at the Closing proceeds in connection with the
Financing in an amount sufficient to pay the amounts to be paid by MergerCo
pursuant to Section 1.3(c) and all of Parent and MergerCo’s fees and expenses
associated with the transactions contemplated in this Agreement and the
Financing.

 

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

 

3.7           Brokers.
All negotiations relating to this Agreement and the transactions contemplated
hereby have been carried out without the intervention of any Person acting on
behalf of Parent or MergerCo in such manner as to give rise to any valid claim
against Parent, MergerCo or the Company for any brokerage or finder’s
commission, fee or similar compensation, except for JPMorgan Securities whose
fees in respect hereof shall be paid by Parent.

 

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

 

21

 

through any Subsidiary or
Affiliate, any obligations or liabilities or engaged in any business activities
of any type or kind whatsoever or entered into any agreements or arrangements
with any Person.

 

3.9           No
Knowledge of Misrepresentations or Omissions. Parent and MergerCo have no
knowledge that any of the representations and warranties of the Company in this
Agreement are not true and correct in all material respects, and Parent and
MergerCo have no knowledge of any material errors in, or material omissions
from, the Disclosure Letter.

 

3.10         Certain
Acquisitions. Since April 1, 2007, none of Parent, MergerCo, Madison
Dearborn Partners, LLC or any of their respective Affiliates has acquired any
additional business (x) engaged in the manufacture, distribution, and sale of
chemical products for use in the industrial or research and development fields
and, as a result of such acquisition, become a Merck Competitor or (y) engaged
in the manufacture and sale of chemical products for use in the industrial or
research and development fields and, as a result of such acquisition, become a
Prohibited Merck Competitor.

 

ARTICLE IV

 

COVENANTS

 

4.1           Conduct
of the Company and its Subsidiaries. Except as set forth in Schedule 4.1 of
the Disclosure Letter, as contemplated hereby or with the prior written consent
of Parent (which consent shall not be unreasonably withheld or delayed), from
the date hereof to the Effective Time, the Company shall, and shall cause its
Subsidiaries to, conduct its business in all material respects in the ordinary
course, in substantially the same manner in which such business is conducted as
of the date hereof, and to the extent consistent with such business shall use
its reasonable best efforts to preserve intact its present business
organization and to preserve its relationships with customers, suppliers and
others having business dealings with it. Without limiting the generality of the
foregoing, except as set forth in Schedule 4.1 of the Disclosure Letter, as
contemplated hereby or with the prior written consent of Parent (which consent
shall not be unreasonably withheld or delayed), from the date hereof to the
Effective Time:

 

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

 

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

 

22

 

other similar types of
agreements with, or take any action to increase the compensation of, its
employees or officers, other than in the ordinary course of business in a
manner consistent with past practice (including ordinary renewals of health and
welfare benefit plans) or to the extent required under any Company Benefit
Plan, collective bargaining agreement, labor agreement, works council agreement
or other contractual arrangement or by applicable Law;

 

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

 

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

 

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

 

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

 

(g)           none of the Company or its
Subsidiaries shall cancel without reasonable consideration any material debts
owing to or held by any of the Company or its Subsidiaries, except for debts
cancelled in the ordinary course of business in a manner consistent with past
practice in connection with collection of accounts receivable and settlement of
claims against any of the Company or its Subsidiaries;

 

(h)           none of the Company or its
Subsidiaries shall
make any material loan or advance to, or any investment in, any other Person,
other than loans, advances or investments to or in any Subsidiary or in the
ordinary course of business consistent with past practice;

 

23

 

(i)            none of the Company or its
Subsidiaries shall, other than in the ordinary course of business in a manner
consistent with past practice (i) enter into, terminate (other than
as a result of the expiration of such Contract’s term), amend or modify any
Listed Contract or Contract that would be a Listed Contract had such Contract
been in effect on the date hereof or (ii) settle or compromise any
material actions, suits, investigations, arbitrations or proceedings or enter
into any consent, injunction or similar restraint or equitable relief in
settlement of any material actions, suits, investigations, arbitrations or
proceedings;

 

(j)            none of the Company or its
Subsidiaries shall, (i) incur any Indebtedness (other than pursuant
to the terms of the Credit Agreement as in effect on the date hereof in the
ordinary course of business) or vary the material terms of any existing debt
securities, (ii) issue or sell any debt securities, or (iii) take
any steps to mortgage or pledge to secure any material obligation, or subject
to any material Lien, any of their material properties other than pursuant to
the terms of the Credit Agreement as in effect on the date hereof;

 

(k)           none of the Company or its
Subsidiaries shall transfer, assign, repay, discharge, satisfy or otherwise
reduce in any respect any of the Designated Intercompany Loans (including by
entering into offsetting loan transactions that would have the effect of the
same);

 

(l)            none
of the Company or its Subsidiaries shall acquire (other than
purchases of inventory or equipment in the ordinary course of business
consistent with past practice) any material business;

 

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

 

(n)           none of the Company or its
Subsidiaries shall make any Tax election inconsistent with most recent
practice, change any existing Tax election or annual accounting period, change
any Tax accounting method, file any amended Tax Return, enter into any Tax
closing agreement, settle any Tax claim or assessment relating to the Company
or its Subsidiaries in excess of the amount reserved therefor in the Financial
Statements, or surrender any right to claim a refund of Taxes, except where
such election, change, amendment, agreement, settlement, surrender, consent, or
other action would not have a Material Adverse Effect; and

 

(o)           none of the Company or its
Subsidiaries shall enter into any agreement or otherwise make a commitment to
do any of the foregoing.

 

24

 

4.2           Satisfaction of Closing
Conditions; Filings.

 

(a)           Subject to the terms
and conditions of this Agreement, each of Parent, MergerCo and the Company
shall use its reasonable best efforts to cause the Closing to occur, including,
without limitation, (i) taking such actions as are contemplated by
Section 4.2(b) and (ii) defending against any suits, actions
or proceedings, judicial or administrative, challenging this Agreement or the
consummation of the transactions contemplated hereby, including seeking to have
any temporary restraining order, preliminary injunction or other legal
restraint or prohibition entered or imposed by any court or other Governmental
Entity and that is not yet final and non-appealable to be vacated or reversed; provided
that none of the parties hereto or their respective Affiliates shall be
required to make any material monetary expenditure, commence or be a plaintiff
in any litigation or other proceeding or offer or grant any material
accommodation (financial or otherwise) to any Person except, in the case of
Parent, as provided in Sections 4.2(b), 4.2(c) and 4.2(e). Immediately after
the entry into this Agreement by the parties hereto, the Company shall obtain
the Requisite Consent of Stockholders to approve and adopt this Agreement. Prior
to the Effective Time, none of Parent, MergerCo, Madison Dearborn Partners, LLC
or any of their respective Affiliates shall acquire any additional business
engaged in the manufacture, distribution, and sale of chemical products for use
in the industrial or research and development fields and, as a result of such
acquisition, become a Merck Competitor.

 

(b)           Each party hereto shall
(i) make the filings required of it or any of its Affiliates under
the HSR Act and any Non-U.S. Antitrust Laws in connection with this Agreement
and the transactions contemplated hereby as promptly as practicable following
the date hereof, (ii) comply at the earliest practicable date and
after consultation with the other parties hereto with any request for
additional information or documentary material received by it or any of its
Affiliates from the Federal Trade Commission (the “FTC”), the Antitrust
Division of the Department of Justice (the “Antitrust Division”), the
European Commission or any other Governmental Entity, (iii) cooperate
with the other parties hereto in connection with any filing under the HSR Act
and any Non-U.S. Antitrust Laws and in connection with resolving any
investigation or other inquiry concerning the transactions contemplated by this
Agreement initiated by the FTC, the Antitrust Division, the European Commission
or any other Governmental Entity, (iv) cause the waiting periods
under the HSR Act to terminate or expire at the earliest possible date; and (v)
take any other action reasonably necessary to obtain the consents, approvals
and authorizations required for the consummation of the transactions
contemplated by this Agreement at the earliest possible date; provided
that in the case of a joint filing, Parent shall be responsible for the
preparation and, with the prior written consent of the Company or its
Subsidiaries, which consent shall not be unreasonably withheld or delayed, the
making of such filing.

 

25

 

(c)           For purposes of this
Section 4.2, without limiting the foregoing, required actions by Parent
shall include acceptance by Parent of any and all divestitures of any
Subsidiary or assets of the Parent or its Affiliates or the Company or its
Subsidiaries or acceptance of an agreement to hold any assets of Parent or its
Affiliates or the Company or its Subsidiaries separate in any action, suit or
proceeding, whether judicial or administrative and whether required by the FTC,
the Antitrust Division, the European Commission or any other applicable Governmental
Entity in connection with the transactions contemplated by this Agreement.

 

(d)           Each party hereto shall
promptly inform the other parties of any material communication made to, or
received by such party from, the FTC, the Antitrust Division, the European
Commission or any other Governmental Entity regarding any of the transactions
contemplated by this Agreement.

 

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

 

4.3           Access and Information.

 

(a)           Prior to the Closing,
and subject to the restrictions set forth in the Confidentiality Agreement
dated March 5, 2007, between Madison Dearborn Partners, LLC and the Company
(the “Confidentiality Agreement”), the Company and each of its
Subsidiaries shall permit Parent and its Debt Financing Sources and their
respective representatives after the date of execution of this Agreement to
have reasonable access at reasonable times as coordinated by Goldman to the
properties, books, records and management employees, of the Company and its
Subsidiaries, other than any personnel information protected by applicable
privacy Laws, and shall furnish such information and documents in its
possession relating to the Company and its Subsidiaries as Parent may
reasonably request, provided that such access does not unreasonably
interfere with the conduct of the business of the Company or its Subsidiaries
or any of their Affiliates. All information provided or obtained pursuant to
the foregoing shall be held by Parent, and Parent shall cause its
representatives to hold such information, in accordance with and subject to the
terms of the Confidentiality Agreement.

 

(b)           Following the Closing,
Parent, the Surviving Corporation and each of its Subsidiaries will afford
promptly to the former holders of Company Stock and their agents reasonable
access to the properties, books, records, employees and auditors of the
Surviving Corporation and its Subsidiaries to the extent necessary to permit such
holders to determine any matter relating to their rights and obligations
hereunder or to any period ending on or before the Closing Date or any taxable
period beginning on or before the Closing Date; provided that any such
access by such holders is at their own expense and does not unreasonably
interfere with the conduct of the business of the Surviving Corporation or
Parent.

 

26

 

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

 

4.5           Publicity. Except as required
by applicable Law, Parent and MergerCo shall not, directly or indirectly, make
or cause to be made any public announcement or issue any notice in respect of
this Agreement or the transactions contemplated hereby without the prior written
consent of the Company, and the Company shall not, directly or indirectly, make
or cause to be made any such public announcement or issue any notice without
the prior written consent of Parent. The Company and Parent shall consult with
each other prior to issuing, or, in the case of Parent, permitting MergerCo to
issue, any press releases or otherwise making public statements with respect to
the transactions contemplated hereby and prior to making any filings with any
Governmental Entity or with any national securities exchange with respect
thereto.

 

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

 

27

 

and to recognize all service of such Employee with the
Company or any of its Subsidiaries for purposes of eligibility and vesting and,
if applicable, to waive any exclusions for preexisting conditions. Nothing
contained herein, express or implied: (i) shall be construed to establish,
amend, or modify any benefit plan, program, agreement or arrangement, (ii)
shall alter or limit the Parent’s or the Company’s ability to amend, modify or
terminate any benefit plan, program, agreement or arrangement, (iii) is
intended to confer upon any current or former employee any right to employment
or continued employment for any period of time by reason of this Agreement, or any
right to a particular term or condition of employment, or (iv) is intended to
confer upon any individual (including employees, retirees, or dependents or
beneficiaries of employees or retirees) any right as a third-party beneficiary
of this Agreement.

 

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

 

4.8           Indemnification of Directors and
Officers.

 

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

 

28

 

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

 

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

 

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

 

4.9           Financing.

 

(a)           Parent shall use its
reasonable best efforts to arrange the Debt Financing on the terms and
conditions described in the Debt Commitment Letters, including using reasonable
best efforts to (i) negotiate definitive agreements with respect
thereto on the terms and conditions contained in the Debt Commitment Letters, (ii) satisfy
on a timely basis all conditions applicable to Parent, MergerCo or any of its
Affiliates in such definitive agreements that are within their or such
Affiliates’ control and (iii) consummate the Financing contemplated by
the Debt Commitment Letters at Closing. Parent shall obtain the Financing
contemplated by the Equity Commitment Letter upon satisfaction or waiver of the
conditions to the Closing (other than those conditions that by their nature
cannot be satisfied until the Closing) set forth in Sections 5.1 and 5.2 and
the consummation of the Debt Financing. In the event any portion of the Debt
Financing becomes unavailable on the terms and conditions contemplated in the
Debt Commitment Letters, Parent shall use its reasonable best efforts to
arrange to obtain alternative financing on terms not materially more adverse to
the Company than those set forth in the Debt Commitment Letters (“Alternative
Financing”), including from alternative sources, as promptly as practicable
following the occurrence of such event. In the event that

 

29

 

(x) Parent
is seeking to obtain High Yield Financing and (y) any such
financing has not been obtained by the final day of the Marketing Period,
Parent shall use the proceeds of the Bridge Financing to replace any such
affected portion of the High Yield Financing. Parent shall give the Company prompt
notice of any breach by any party of the Debt Commitment Letters or any
termination of the Debt Commitment Letters. Parent shall keep the Company
informed on a reasonably current basis in reasonable detail of the status of
its efforts to arrange the Financing and shall not permit any amendment or
modification to be made to, or any waiver of any provision of or remedy under,
the Debt Commitment Letters without the prior written consent of the Company. Parent
shall not permit any amendment or modification to be made to, or any waiver of
any provision of or remedy under, the Equity Commitment Letter.

 

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

 

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

 

30

 

4.11         Exclusive Dealing. During the
period from the date of this Agreement through the Closing or the earlier
termination of this Agreement pursuant to Section 7.1, none of the Company or
any of its Subsidiaries shall take or permit any other Person on its behalf to
take, directly or indirectly, any action to encourage, initiate or engage in
discussions or negotiations with, or provide any information to, any Person
(other than Parent and its representatives) concerning any purchase of all or
substantially all of the shares of Company Stock, any merger involving the
Company and/or any of its Subsidiaries, any sale of all or substantially all of
the assets of the Company or any of its Subsidiaries, or any similar
transaction involving the Company and its Subsidiaries.

 

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

 

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

 

ARTICLE
V

CONDITIONS TO CLOSING

 

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

 

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

 

31

 

(b)           There shall not be in
effect any injunction or other order issued by a court of competent jurisdiction
restraining or prohibiting the consummation of the transactions contemplated by
this Agreement.

 

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

 

(a)           The representations and
warranties of the Company contained in Article II shall be true and
correct in all respects, if qualified by materiality or Material Adverse
Effect, and shall be true and correct in all material respects, if not
qualified by materiality or Material Adverse Effect, when made and at and as of
the Closing with the same effect as though made at and as of the Closing,
except that those representations and warranties that are made as of a specific
date shall be true and correct only as of such date. The Company shall have
duly performed and complied in all material respects with all agreements
contained herein required to be performed or complied with by it at or before
the Closing.

 

(b)           The Company shall have
delivered to Parent a certificate, dated the Closing Date and signed by a
senior executive officer of the Company, as to the fulfillment of the
conditions set forth in Section 5.2(a).

 

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

 

5.3           Conditions to the Obligation of
the Company. The obligation of the Company to effect the Merger shall be
subject to the fulfillment or waiver by the Company on or prior to the Closing
Date of each of the following conditions:

 

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

 

(b)           Parent shall be ready
to provide to the Company the funds required to effect, or to permit the
Surviving Corporation to effect, the payments contemplated by
Section 1.3(c), and the payments and other actions contemplated by Section
1.3(c)(i) shall be ready to be made or performed. Parent and MergerCo shall
have duly performed and complied in all material respects with

 

32

 

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

 

(c)           Parent shall have
delivered to the Company a certificate, dated the Closing Date and signed by a
senior executive officer of Parent, as to the fulfillment of the conditions set
forth in Sections 5.3(a) and 5.3(b).

 

ARTICLE
VI

NO SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS

 

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

 

ARTICLE
VII

TERMINATION

 

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

 

(a)           By the written
agreement of Parent and the Company;

 

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

 

33

 

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

 

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

 

(ii)           any event shall occur
after the date hereof that shall have made it impossible to satisfy a condition
precedent to the terminating party’s obligations to perform its obligations
hereunder, unless the occurrence of such event shall be due to the failure of
the terminating party to perform or comply with any of the agreements,
covenants or conditions hereof to be performed or complied with by such party
prior to the Closing; and

 

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

 

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

 

34

 

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

 

ARTICLE
VIII

DEFINITIONS AND INTERPRETATION

 

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

 

“Affiliate” means with respect
to any Person, a Person that directly or indirectly through one or more
intermediaries, controls, is controlled by, or is under common control with
such Person. “Control” (including the terms “controlled by” and “under
common control with”) means the possession, directly or indirectly, of the
power to direct or cause the direction of the management policies of a Person,
whether through the ownership of voting securities, by contract, as trustee or
executor, or otherwise.

 

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

 

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

 

35

 

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

 

“Banc of America” means
Banc of America Securities LLC.

 

“Bridge Financing” has the
meaning set forth in Section 3.5.

 

“Business Day” means
each Monday, Tuesday, Wednesday, Thursday and Friday that is not a day on which
banking institutions in New York, New York are authorized or obligated by Law
or executive order to close.

 

“CDRV Acquisition” means
CDRV Acquisition Corporation.

 

“CDRV Holdings” means
CDRV  Holdings, Inc.

 

“CDRV Investment” means
CDRV  Investment Holdings Corporation.

 

“Certificate” means a
certificate representing shares of Company Stock.

 

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

 

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

 

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

 

“Closing Debt Repayment Amount”
means all outstanding principal, interest and all other amounts due and payable
at the Effective Time (including all accrued and unpaid interest and any
prepayment fees or penalties) under, and to satisfy and discharge the
obligations of the Company, CDRV Investment, CDRV Holdings, VWR and any other
applicable Subsidiary of the Company in respect of, the Credit Agreement, the
Senior Floating Rate Notes, the Senior Discount Notes, the Senior Notes, the
Senior Subordinated Notes and the other Indebtedness identified in Schedule
8.1(a) of the Disclosure Letter.

 

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

 

“Company” has the meaning set
forth in the preamble.

 

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

 

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

 

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

 

36

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“DGCL” has the meaning set
forth in Section 1.1.

 

37

 

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

 

“Disposition Agreement” means
the Agreement regarding Future Disposition of VWR Shares and Business, dated
February 15, 2004, between Merck KGaA and Clayton, Dubilier & Rice Fund VI
Limited Partnership.

 

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

 

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

 

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

 

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

 

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

 

“Employee” has the meaning set
forth in Section 4.6.

 

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

 

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

 

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

 

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

 

“Equity Funds” has the meaning
set forth in Section 3.5.

 

38

 

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

 

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

 

“Exchange Act” means the
Securities Exchange Act of 1934, as amended.

 

“Exercise Price” means with
respect to any Company Option, the amount required to be paid by the holder
thereof to exercise such option.

 

“Financial Statements” has the
meaning set forth in Section 2.4.

 

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

 

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

 

“Fully Diluted Number” means
the sum of (i) number of shares of Company Stock outstanding at the
Closing, (ii) the number of shares of Company Stock into which all
Company Options outstanding at the Closing are exercisable or convertible in
accordance with their terms and (iii) the number of RSUs and DSUs
outstanding at the Closing.

 

“GAAP” means United States
generally accepted accounting principles.

 

“Goldman” means Goldman, Sachs
& Co.

 

“Governmental Entity” means
any governmental or regulatory authority, agency, court, commission or other
entity, domestic or foreign.

 

“Guarantee” has the meaning
set forth in Section 3.6.

 

“Guarantors” has the meaning
set forth in Section 3.6.

 

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

 

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

 

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

 

39

 

“Indebtedness” means without
duplication, (i) any indebtedness for borrowed money and (ii) any
indebtedness evidenced by any note, bond, debenture or other debt security, in
the case of the foregoing clauses (i) and (ii), whether incurred, assumed,
secured or unsecured. Indebtedness shall not include capital leases or
Intercompany Indebtedness.

 

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

 

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

 

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

 

“IRS” means the Internal
Revenue Service.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Listed Contracts” has the
meaning set forth in Section 2.14.

 

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

 

40

 

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

 

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

 

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

 

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

 

“MergerCo” has the meaning set
forth in the preamble.

 

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

 

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

 

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

 

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

 

41

 

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

 

“Parent” has the meaning set
forth in the preamble.

 

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

 

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

 

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

 

“Permitted Liens” means (i) Liens
disclosed in the Financial Statements, including the notes thereto; (ii) Liens
for taxes, assessments and similar charges that are not yet due or that are
being contested in good faith; (iii) mechanic’s, materialmen’s,
carrier’s, repairer’s and other similar Liens arising or incurred in the
ordinary course of business or that are not yet due and payable or that are
being contested in good faith; (iv) easements, rights of way, title
imperfections and restrictions, zoning ordinances and other similar
encumbrances affecting the real property; (v) statutory Liens in
favor of lessors arising in connection with any property leased to the Company
or its Subsidiaries; (vi) Liens incurred in the ordinary course of
business since December 31, 2006; and (vii) any other Liens that
would not reasonably be expected to have, individually or in the aggregate, a (a) Material
Adverse Effect or (b) material adverse effect on the ability of Parent
or MergerCo to obtain the Debt Financing.

 

“Person” means any natural
person, firm, partnership, association, corporation, company, trust, business
trust, Governmental Entity or other entity.

 

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

 

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

 

42

 

“Registration and Participation
Agreement” means the Registration and Participation Agreement, dated as of
April 7, 2004, among the Company, Clayton, Dubilier & Rice Fund VI
Limited Partnership, Banc of America Capital Investors, L.P., SSB Capital
Partners (Master Fund) L.L.P., CGI Private Equity L.P., LLC and the other
stockholders of the Company who may become parties thereto from time to time in
accordance with the terms thereof.

 

“Requisite
Consent of Stockholders” means the written consent of holders of shares of
Company Stock representing a majority of the voting power of the outstanding
shares of Company Stock.

 

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

 

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

 

“SEC” means the Securities and
Exchange Commission.

 

“SEC Filings” has the meaning
set forth in Section 2.4.

 

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

 

“Senior Discount Notes” means
the 95/8% senior
discount notes, dated as of December 16, 2004, in aggregate principal
amount at maturity not exceeding $481 million (after giving effect to any
issuance of exchange notes), issued by CDRV Investment pursuant to an
indenture, dated as of December 16, 2004, as amended, restated or
supplemented from time to time, among CDRV Investment, the guarantors from time
to time parties thereto and Wells Fargo Bank, National Association, as trustee.

 

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

 

“Senior Notes” means the 67/8%
senior notes, dated as of April 7, 2004, in aggregate principal amount not
exceeding $200 million (after giving effect to any exchange notes), issued
by VWR (as successor in interest to CDRV Acquisition) pursuant to the
indenture, dated as of April 7, 2004, as amended, restated or supplemented
from time to time, among CDRV Acquisition, the guarantors from time to time
parties thereto and Wells Fargo Bank, National Association, as trustee.

 

43

 

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

 

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

 

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

 

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

 

“Subsidiary” means with
respect to any Person (for the purposes of this definition, the “parent”),
any other Person (other than a natural person), whether incorporated or
unincorporated, of which at least a majority of the securities or ownership
interests having by their terms ordinary voting power to elect a majority of
the board of directors or other persons performing similar functions is directly
or indirectly owned or controlled by the parent or by one or more of its
Subsidiaries.

 

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

 

“Surviving Corporation” has
the meaning set forth in Section 1.1.

 

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

 

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

 

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

 

44

 

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

 

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

 

“Termination Fee” has the
meaning set forth in Section 7.2.

 

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

 

“VWR” means VWR International,
Inc.

 

8.2           Disclosure Letter. The parties
acknowledge and agree that any exception to a representation and warranty
contained in this Agreement that is disclosed in any of the Schedules in the
Disclosure Letter under the caption referencing such representation and
warranty shall be deemed to also be an exception to each other representation
and warranty contained in this Agreement to the extent that it is reasonably
apparent that such exception is applicable to such other representation and
warranty. Certain information set forth in the Schedules to the Disclosure
Letter is included solely for informational purposes and may not be required to
be disclosed pursuant to this Agreement, and the disclosure of any information
shall not be deemed to constitute an acknowledgment that such information is
required to be disclosed in connection with the representations and warranties
made by the Company or Parent and MergerCo, as the case may be, in this
Agreement or that it is material, nor shall such information be deemed to
establish a standard of materiality. The Schedules in the Disclosure Letter are
qualified in their entirety by reference to specific provisions of this
Agreement and are not intended to constitute, and shall not be construed as
constituting, representations or warranties of the Company or its Subsidiaries,
except to the extent expressly provided in this Agreement.

 

ARTICLE
IX

GENERAL PROVISIONS

 

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

 

45

 

Governmental Entities required to effect the Merger
and (iii) any other authorizations, consents, approvals, filings or
notifications required to effect the Merger.

 

9.2           Further Actions. Subject to
the terms and conditions of this Agreement, each party shall execute and
deliver such certificates and other documents and take such actions as may
reasonably be requested by the other party in order to effect the transactions
contemplated by this Agreement.

 

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

 

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

 

(a)           if to the Company,

 

CDRV Investors, Inc.

1310 Goshen Parkway

PO Box 2656

West Chester, Pennsylvania, 19380

Fax:  (610) 701-9896

Telephone:  (610) 719-7072

Attention:  George Van Kula, Esq.

 

with a copy to:

 

Clayton, Dubilier &
Rice Fund VI Limited Partnership

1403 Foulk Road, Suite 106

Wilmington, Delaware, 19803

Fax:  (212) 407-5200

Telephone:  (212) 407-5252

Attention:  Rick Schnall

 

and

 

46

 

Clayton, Dubilier &
Rice, Inc.

375 Park Avenue, 18th Floor

New York, New York 10152

Fax:  (212) 407-5200

Telephone:  (212) 407-5252

Attention:  Rick Schnall

 

and

 

Debevoise & Plimpton
LLP

919 Third Avenue

New York, New York  10022

Fax:  (212) 909-6836

Telephone:  (212) 909-6000

Attention:  Franci J. Blassberg, Esq.

 

(b)           if to Parent or
MergerCo,

 

Varietal
Distribution Holdings, LLC

c/o Madison Dearborn Partners, LLC

Three First National Plaza, 38th Floor

Chicago, Illinois 60602

Fax:  (312) 895-1056

Telephone:  (312) 895-1000

Attention: General Counsel

 

with a copy to:

 

Kirkland
& Ellis LLP
 200 East Randolph Drive

Chicago, Illinois 60601

Fax:  (312) 861-2200

Telephone:  (312) 861-2000

Attention:  Sanford E. Perl, P.C.

 

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

 

All such notices, requests, demands, waivers and other
communications shall be deemed to have been received (i) if by
personal delivery, on the day after such delivery, (ii) if by
certified or registered mail, on the seventh Business Day after the mailing
thereof, (iii) if by next-day or overnight mail or delivery, on the
day delivered or (iv) if by fax or telegram, on the next day
following the day on which such fax or telegram was sent, provided that
a copy is also sent by certified or registered mail.

 

47

 

9.5           Binding Effect. This Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective heirs, successors and permitted assigns.

 

9.6           Assignment; Successors. This
Agreement shall not be assignable by any party hereto without the prior written
consent of all of the other parties and any attempt to assign this Agreement
without such consent shall be void and of no effect; provided that each of
Parent and MergerCo may assign all or any of its rights and obligations
hereunder (i) to any Affiliate of Parent organized under the laws of any
state of the United States, which Affiliate is controlled by the Equity Funds
or a Person controlling the Equity Funds and (ii) to any lender in
connection with the financing required to consummate the transactions
contemplated by this Agreement, provided, however, that no such assignment
shall relieve the assigning party of its obligations hereunder. Nothing in this
Agreement, expressed or implied, is intended or shall be construed to confer
upon any Person other than the parties, any Affiliate of the Company, and the
successors and assigns permitted by this Section 9.6 any right, remedy or
claim under or by reason of this Agreement, other than, following the Effective
Time, (a) the rights of the former holders of Company Stock under
Section 4.3(b) and the rights of former directors and officers of the
Company and its Subsidiaries under Section 4.8, and (b) the
right of (x) any former holder of Company Stock, RSUs or DSUs to
receive the aggregate Per Share Merger Consideration, or (y) any
holder of Company Options to receive the applicable Option Cancellation
Payment, in each case in accordance with the terms of this Agreement.

 

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

 

9.8           Entire Agreement. This
Agreement (including the Exhibits and Schedules referred to herein or delivered
hereunder), the Confidentiality Agreement, the Equity Commitment Letter and the
Guarantee constitute the entire agreement and supersede all prior agreements
and understandings, both written and oral, between the parties with respect to
the subject matter hereof.

 

9.9           Severability. If any
provision, including any phrase, sentence, clause, section or subsection, of
this Agreement is invalid, inoperative or unenforceable for any

 

48

 

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

 

9.10         Headings. The headings contained
in this Agreement are for purposes of convenience only and shall not affect the
meaning or interpretation of this Agreement.

 

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

 

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

 

9.13         Consent to Jurisdiction, etc.

 

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

 

(b)           Each of the parties
hereto hereby irrevocably and unconditionally waives, to the fullest extent it
may legally and effectively do so, any objection which it may now or hereafter
have to the laying of venue of any suit, action or proceeding arising out of or
relating to this Agreement or the transactions contemplated hereby in any New
York State or Federal court. Each of the parties hereto hereby irrevocably
waives, to the fullest extent permitted by Law, the defense of an inconvenient
forum to the maintenance of such action or proceeding in any such court.

 

49

 

(c)           Each of the parties
hereto hereby irrevocably and unconditionally consents to service of process in
the manner provided for notices in Section 9.4. Nothing in this Agreement
will affect the right of any party to this Agreement to serve process in any
other manner permitted by Law.

 

9.14         Waiver of Punitive and Other Damages
and Jury Trial.

 

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

 

(b)           EACH PARTY ACKNOWLEDGES
AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY
TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE IT HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY
IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

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

 

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

 

50

 

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

 

51

 

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

 

 

	
   

  	
  VARIETAL DISTRIBUTION HOLDINGS,

  LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  VARIETAL DISTRIBUTION MERGER

  SUB, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CDRV  INVESTORS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

52

 

Exhibit A

 

Form of Guarantee

 

A-1Exhibit 10.1(b)

 

EXECUTION COPY

 

FIRST AMENDMENT TO AGREEMENT AND PLAN OF MERGER

 

This First Amendment (this “Amendment”), dated
as of May 7, 2007, is to the Agreement and Plan of Merger, dated May 2, 2007
(as amended, the “Merger Agreement”), among Varietal Distribution
Holdings, LLC, a Delaware limited liability company (“Parent”), Varietal
Distribution Merger Sub, Inc., a Delaware corporation (“MergerCo”), and
CDRV Investors, Inc., a Delaware corporation (the “Company”).
Capitalized terms used but not otherwise defined herein shall have the
respective meanings ascribed to such terms in the Merger Agreement.

 

WHEREAS, the parties hereto desire to amend the Merger Agreement
pursuant to Section 9.7 thereof as provided herein.

 

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

 

1.             Amendment
of Merger Agreement.

 

(a)         Section 3.5 of the Merger
Agreement is hereby amended by deleting the first sentence thereof in its
entirety and replacing such sentence with the following sentence:

 

“(a) On May 2, 2007 Parent delivered to the
Company true and complete copies of an executed commitment letter from Madison
Dearborn Capital Partners V-A, L.P., Madison Dearborn Capital Partners V-C,
L.P., and Madison Dearborn Capital Partners V Executive-A, L.P. (collectively,
the “Equity Funds”) to provide equity financing in an aggregate amount
of $1.425 billion to fund a portion of the amounts to be paid by MergerCo
pursuant to Section 1.3(c) (the “Equity Commitment Letter”), which
Equity Commitment Letter names the Company as a third party beneficiary
thereof, and (b) on May 7, 2007 Parent will have delivered to the
Company true and complete copies of executed commitment letters, dated May 7,
2007 (the “Debt Commitment Letters”) from (i) Bank of America,
N.A., Banc of America Bridge LLC, Banc of America Securities LLC, Goldman Sachs
Credit Partners L.P., J.P. Morgan Securities Inc. and JPMorgan Chase Bank,
N.A., respectively (the “Senior Debt Financing Sources”) to provide
Parent and MergerCo with (A) $1.665 billion in senior secured debt
financing (the “Senior Secured Financing”) and (B) $675 million
in senior bridge financing (the “Bridge Financing”, and together with
the Senior Secured Financing and any high yield debt financing used to fund the
acquisition in lieu of the Bridge Financing (the “High Yield Financing”)
being collectively referred to as the “Senior Debt Financing”) and (ii)
GS Mezzanine Partners 2006 Onshore Fund, L.P. (the “Mezzanine Debt Financing
Source”, and together with the Senior Debt Financing Sources being
collectively referred to as the “Debt Financing Sources”) to provide
Parent and MergerCo with $470 million in senior subordinated notes financing
(together with the Senior Debt Financing, the “Debt Financing”, and
together with the equity financing referred to in clause (a) being collectively
referred to as the “Financing”).”

 

(b)        Section 4.9(a) of the Merger
Agreement is hereby amended by deleting the third sentence thereof in its entirety
and replacing such sentence with the following sentence:

 

1

 

“In the event any portion of the Debt Financing
becomes unavailable on the terms and conditions contemplated in the Debt
Commitment Letters, Parent shall use its reasonable best efforts to arrange to
obtain alternative financing on terms not materially more adverse to the
Company than those set forth in the Debt Commitment Letters (as such term was
defined in this Agreement as initially in effect) (“Alternative Financing”),
including from alternative sources, as promptly as practicable following the
occurrence of such event.”

 

(c)         Section 8.1 of the Merger
Agreement is hereby amended by inserting the following defined terms in the
appropriate alphabetical location:

 

“Mezzanine Debt Financing Source” has the
meaning set forth in Section 3.5.

 

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

 

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

 

2.             Consent.
Pursuant to Section 4.9(a) of the Merger Agreement, the Company hereby consents
to Parent and MergerCo entering into the Debt Commitment Letters (as defined in
Section 1(a) hereof).

 

3.             Full
Force and Effect. Except as specifically amended by this Amendment, the
Merger Agreement shall remain in full force and effect and is hereby ratified
and confirmed. This Amendment shall be construed as one with the Merger
Agreement, and the Merger Agreement shall, where the context requires, be read
and construed so as to incorporate this Amendment.

 

4.             General
Provisions. Sections 9.4 through 9.15 of the Merger Agreement are hereby
incorporated into and will apply to this Amendment.

 

[Remainder of page intentionally left blank]

 

2

 

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

 

	
   

  	
  VARIETAL
  DISTRIBUTION HOLDINGS, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  VARIETAL
  DISTRIBUTION MERGER SUB, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CDRV
  INVESTORS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

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