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AGREEMENT AND PLAN OF MERGER

among

INVITROGEN CORPORATION

BASEBALL ACQUISITION CORPORATION

and

BIORELIANCE CORPORATION

Dated as of December 24, 2003

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AGREEMENT AND PLAN OF MERGER

AGREEMENT AND PLAN OF MERGER, dated as of December 24, 2003 (this “Agreement”), by and among INVITROGEN CORPORATION, a Delaware corporation (“Parent”), BASEBALL ACQUISITION CORPORATION, a Delaware corporation and wholly owned subsidiary of Parent (“Purchaser”), and BIORELIANCE CORPORATION, a Delaware corporation (the “Company”).

RECITALS

WHEREAS, the respective Boards of Directors of the Company, Purchaser and Parent deem it advisable and in the best interests of their respective corporations and stockholders to enter into and consummate this Agreement, providing for Purchaser to acquire the Company upon the terms and subject to the conditions set forth herein;

WHEREAS, in furtherance thereof, it is proposed that Purchaser will commence a cash tender offer (the “Offer”) to acquire all shares (the “Company Shares”) of the issued and outstanding common stock, $.01 par value per share, of the Company (the “Company Common Stock”), for $48.00 per share of Company Common Stock or such higher price as may be paid in the Offer (the “Per Share Amount”), in cash without interest, upon the terms and subject to the conditions set forth in this Agreement and the Offer Documents (as defined in Section 1.1(c));

WHEREAS, also in furtherance of such acquisition, the Boards of Directors of Parent, Purchaser and the Company have each approved the merger of Purchaser with and into the Company (the “Merger”) following consummation of the Offer in accordance with the General Corporation Law of the State of Delaware (the “DGCL”) and upon the terms and subject to the conditions set forth herein;

WHEREAS, the Board of Directors of the Company (the “Board of Directors”) has approved this Agreement and has determined that the consideration to be paid for each Company Share in the Offer and the Merger is fair to the holders of such Company Shares and to recommend that the holders of such Company Shares accept the Offer and approve this Agreement and the transactions contemplated hereby;

WHEREAS, as a condition to and an inducement to Parent’s and Purchaser’s willingness to enter into this Agreement, concurrently with the execution and delivery of this Agreement and incurring the obligations set forth herein, with the approval of the Board of Directors, Parent and Purchaser have entered into a voting and tender agreement (the “Voting and Tender Agreement”) with Sidney R. Knafel and certain related stockholders of the Company (the “Principal Stockholders”) under which the Principal Stockholders have, among other things, agreed to tender the Company Shares held by them in the Offer and to grant Parent and Purchaser a proxy with respect to the voting of such Company Shares, all upon the terms and subject to the conditions set forth in the Voting and Tender Agreement; and

WHEREAS, the parties hereto desire to make certain representations, warranties, covenants and agreements in connection with the transactions contemplated by this Agreement.

NOW, THEREFORE, in consideration of the foregoing, and of the representations,

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warranties, covenants and agreements contained herein, the parties agree as follows:

ARTICLE 1

THE TENDER OFFER

1.1 The Offer.

(a) Provided that this Agreement shall not have been terminated in accordance with Section 8.1 hereof and none of the events set forth in Annex I hereto shall have occurred and be existing, Purchaser shall, as promptly as reasonably practicable following the execution of this Agreement (but in any event no later than ten business days after the execution and delivery of this Agreement), commence (within the meaning of Rule 14d-2 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) the Offer. The obligation of Purchaser to accept for payment and to pay for any Company Shares validly tendered shall be subject to the satisfaction of those conditions set forth in Annex I. Purchaser expressly reserves the right from time to time, subject to Sections 1.1(b) and (c) hereof, to waive any such condition, to increase the Per Share Amount, or to make any other changes in the terms and conditions of the Offer. The Per Share Amount shall be net to seller in cash, without interest, subject to reduction for any applicable withholding or stock transfer taxes payable by Seller. The Company agrees that no Company Shares held by the Company or any of its subsidiaries (as defined in Section 9.7(j)) will be tendered pursuant to the Offer.

(b) Without the prior written consent of the Company, neither Parent nor Purchaser shall decrease the Per Share Amount or change the form of consideration payable in the Offer, decrease the number of Company Shares sought, amend or waive satisfaction of the Minimum Condition (as defined in Annex I), extend the Offer (except as set forth in Section 1.1(d)) or impose additional conditions to the Offer or amend any other term of the Offer in any manner adverse to the holders of Company Shares.

(c) The Offer shall be made by means of an offer to purchase (the “Offer to Purchase”) having only the conditions set forth in Annex I hereto. As soon as practicable on the date the Offer is commenced, Parent and Purchaser shall file with the Securities and Exchange Commission (the “SEC”) a Tender Offer Statement on Schedule TO (together with all amendments and supplements thereto, the “Schedule TO”) with respect to the Offer that will comply in all material respects with the provisions of all applicable federal securities laws, and will contain (including as an exhibit) or incorporate by reference the Offer to Purchase and forms of the related letter of transmittal and summary advertisement, if any (which documents, together with any supplements or amendments thereto, and any other SEC schedule or form which is filed in connection with the Offer and related transactions, are referred to collectively herein as the “Offer Documents”). Parent and Purchaser shall cause the Offer Documents to be disseminated to holders of Company Shares as required by applicable federal securities laws. Parent and Purchaser agree promptly to correct the Schedule TO or the Offer Documents if and to the extent that any shall have become false or misleading in any material respect (and the Company, with respect to written information supplied by it specifically for use in the Schedule TO or the Offer Documents, shall promptly notify Parent of any required corrections of such information and shall cooperate with Parent and Purchaser with respect to

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correcting such information) and to supplement the information provided by it specifically for use in the Schedule TO or the Offer Documents to include any information that shall become necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading, and Parent and Purchaser further agree to take all steps necessary to cause the Schedule TO, as so corrected or supplemented, to be filed with the SEC and the Offer Documents, as so corrected or supplemented, to be disseminated to holders of Company Shares, in each case as and to the extent required by applicable federal securities laws. The Company and its counsel shall be given the opportunity to review and comment on any Offer Documents before they are filed with the SEC. The Parent shall provide the Company in writing with any comments the Parent or its counsel may receive from the SEC or its staff with respect to the Offer Documents promptly after receipt of such comments.

(d) The Offer to Purchase shall provide for an initial expiration date of 20 business days (as defined in Rule 14d-1 under the Exchange Act) from the date of commencement, including the date of the commencement of the Offer as the first business day in accordance with Rule 14d-2 under the Exchange Act. Purchaser agrees that it shall not terminate or withdraw the Offer or extend the expiration date of the Offer unless at the expiration date of the Offer the conditions to the Offer described in Annex I hereto shall not have been satisfied or earlier waived. If at the expiration date of the Offer, the conditions to the Offer described in Annex I hereto shall not have been satisfied or earlier waived, Parent or Purchaser may, from time to time, for up to 10 business days on each such occasion beyond the then scheduled expiration date, extend the expiration date of the Offer until the date such conditions are satisfied or earlier waived and Parent becomes obligated to accept for payment and pay for Company Shares tendered pursuant to the Offer. Notwithstanding the foregoing, Parent or Purchaser may, without the consent of the Company, (i) extend the expiration date of the Offer (as it may be extended) for any period required by applicable rules and regulations of the SEC in connection with an increase in the consideration to be paid pursuant to the Offer and (ii) provided that Parent and Purchaser waive the conditions of the Offer described in Annex I hereto (other than the Minimum Condition and the conditions in clauses (iv) (a) and (h) of Annex I) and agree not to assert such conditions as a basis for not consummating the Offer, extend the expiration date of the Offer (as it may be extended) for up to 10 business days, if on such expiration date the conditions for the Offer described on Annex I hereto shall have been satisfied or earlier waived, but the number of Company Shares that have been validly tendered and not withdrawn, when added to the Company Shares, if any, beneficially owned by Parent represents less than 90% of the then issued and outstanding Company Shares. If at the expiration date of the Offer, any of the conditions of the Offer described in Annex I hereto (other than the Minimum Condition and the conditions in clauses (iv) (d), (e), (f) and (h) ) have not been satisfied or earlier waived, then Purchaser shall, and Parent shall cause Purchaser to extend the Offer from time to time until such conditions are satisfied or waived for a period not to exceed 20 business days after expiration of the initial Offer period. In the event the Minimum Condition is satisfied and Purchaser purchases Company Shares pursuant to the Offer, Purchaser may, in its sole discretion, provide a “subsequent offering period” of not more than 20 business days in accordance with Rule 14d-11 under the Exchange Act.

(e) Parent shall provide or cause to be provided to Purchaser all of the funds necessary to purchase any shares of Company Common Stock that Purchaser becomes obligated to purchase pursuant to the Offer to Purchase.

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1.2 Company Action.

(a) The Company hereby approves of and consents to the Offer and represents and warrants that the Board of Directors, at a meeting or meetings duly called and held prior to the date hereof, at which all of the Directors were present, duly: (i) approved and adopted this Agreement and the transactions contemplated hereby, including the Offer and the Merger; (ii) recommended that the stockholders of the Company accept the Offer, tender their Company Shares pursuant to the Offer and approve this Agreement and the transactions contemplated hereby, including the Merger; (iii) determined that this Agreement and the transactions contemplated hereby, including the Offer and the Merger, are fair to and in the best interests of the stockholders of the Company; and (iv) irrevocably took all action necessary to render the limitations on business combinations contained in Section 203 of the DGCL inapplicable to Parent and Purchaser and to this Agreement and the transactions contemplated hereby. The Company further represents and warrants that (x) Bear, Stearns & Co. Inc., the Company’s independent financial advisor (the “Company Financial Advisor”), has delivered to the Board of Directors the Fairness Opinion (as defined in Section 4.20) and (y) a true and correct copy of such opinion has been delivered to Parent and Purchaser. The Company acknowledges that the Voting and Tender Agreement is being executed and delivered simultaneously herewith.

(b) The Company hereby agrees to file with the SEC, as promptly as practicable after the filing by Parent and Purchaser of the Schedule TO with respect to the Offer, a Tender Offer Solicitation/Recommendation Statement on Schedule 14D-9 (together with any amendments or supplements thereto, the “Schedule 14D-9”) that will comply in all material respects with the provisions of all applicable federal securities laws and will include the opinion of the Company Financial Advisor referred to in Section 1.2(a) hereof. The Company agrees to use its best efforts to mail such Schedule 14D-9 to the stockholders of the Company along with the Offer Documents promptly after the commencement of the Offer. The Schedule 14D-9 and the Offer Documents shall contain the recommendations of the Board of Directors described in Section 1.2(a) hereof. The Company agrees promptly to correct the Schedule 14D-9 if and to the extent that it shall become false or misleading in any material respect (and each of Parent and Purchaser, with respect to written information supplied by it specifically for use in the Schedule 14D-9, shall promptly notify the Company of any required corrections of such information and cooperate with the Company with respect to correcting such information) and to supplement the information contained in the Schedule 14D-9 to include any information that shall become necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading, and the Company shall take all steps necessary to cause the Schedule 14D-9 as so corrected to be filed with the SEC and disseminated to the Company’s stockholders to the extent required by applicable federal securities laws. Purchaser and its counsel shall be given an opportunity to review and comment on the Schedule 14D-9 before they are filed with the SEC. The Company shall provide Parent and Purchaser in writing with any comments the Company or its counsel may receive from the SEC or its staff with respect to the Schedule 14D-9 promptly after receipt of such comments.

(c) In connection with the Offer, the Company shall promptly upon execution of this Agreement furnish Purchaser with mailing labels containing the names and addresses of all record holders of Company Shares, non-objecting beneficial owners list and

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security position listings of Company Shares held in stock depositories, each as of a recent date, and shall promptly furnish Purchaser with such additional information, including updated lists of stockholders, mailing labels, security position listings and computer files, and such other information and assistance as Purchaser or its agents may reasonably request for the purpose of communicating the Offer to the record and beneficial holders of Company Shares.

1.3 Directors. Promptly upon the purchase by Purchaser of any Company Shares pursuant to the Offer (the date thereof being referred to as the “Control Date”), and from time to time thereafter as Company Shares are acquired by Purchaser, Purchaser shall be entitled to designate such number of directors, rounded up to the next whole number, on the Board of Directors as will give Purchaser, subject to compliance with Section 14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder, representation on the Board of Directors equal to at least that number of directors which equals the product of the total number of directors on the Board of Directors (giving effect to the directors appointed or elected pursuant to this sentence and including current directors serving as officers of the Company) multiplied by the percentage that the aggregate number of Company Shares beneficially owned by Purchaser or any Affiliate of Purchaser (including for purposes of this Section 1.3 such Company Shares as are accepted for payment pursuant to the Offer, but excluding Company Shares held by the Company or any of its subsidiaries) bears to the number of Company Shares outstanding. At each such time, the Company will also cause each committee of the Board of Directors, if requested by Purchaser, the board of directors of each of the subsidiaries and if requested by Purchaser, each committee of such board of directors of each of the subsidiaries to include Persons designated by Purchaser constituting the same percentage of each such committee or board as Purchaser’s designees constitute on the Board of Directors. The Company shall, upon request by Purchaser, promptly increase the size of the Board of Directors or exercise its best efforts to secure the resignations of such number of directors as is necessary to enable Purchaser’s designees to be elected to the Board of Directors in accordance with the terms of this Section 1.3 and shall cause Purchaser’s designees to be so elected; provided, however, that, in the event that Purchaser’s designees are appointed or elected to the Board of Directors, until the Effective Time (as defined in Section 2.3 hereof) the Board of Directors shall have at least three directors who are directors on the date hereof and who are neither officers of the Company nor designees, stockholders, Affiliates or associates (within the meaning of the Federal securities laws) of Parent (one or more of such directors, the “Independent Directors”); provided further, that if no Independent Directors remain, the other directors shall designate one Person to fill one of the vacancies who shall be neither an officer of the Company nor a designee, stockholder, Affiliate or associate of Parent, and such Person shall be deemed to be an Independent Director for purposes of this Agreement. Subject to applicable law, the Company shall promptly take all action necessary pursuant to Section 14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder in order to fulfill its obligations under this Section 1.3 and shall include in the Schedule 14D-9 mailed to stockholders promptly after the commencement of the Offer (or an amendment thereof or an information statement pursuant to Rule 14f-1 if Purchaser has not theretofore designated directors) such information with respect to the Company and its officers and directors as is required under Section 14(f) and Rule 14f-1 in order to fulfill its obligations under this Section 1.3. Purchaser will supply the Company any information with respect to itself and its nominees, officers, directors and Affiliates required by Section 14(f) and Rule 14f-1. Notwithstanding anything in this Agreement to the contrary, following the time directors designated by Purchaser constitute a majority of the Board of Directors and prior to the Effective Time, the affirmative vote of a

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majority of the Independent Directors shall be required to (w) amend or terminate this Agreement on behalf of the Company, (x) exercise or waive any of the Company’s rights or remedies hereunder, (y) extend the time for performance of Purchaser’s obligations hereunder or (z) take any other action by the Company in connection with this Agreement required to be taken by the Board of Directors.

1.4 Top-Up Option.

(a) The Company hereby grants to Parent and Purchaser an irrevocable option (the “Top-Up Option”), such option to be exercisable only after Purchaser has purchased and paid for Company Shares constituting 88% of the then outstanding Company Shares, to purchase, at a price per share equal to the Per Share Amount, a number of shares of Company Common Stock (the “Top-Up Option Shares”) that, when added to the number of shares of Company Common Stock owned by Parent or Purchaser or any wholly-owned subsidiary of Parent or Purchaser at the time of exercise of the Top-Up Option, constitutes one share of Company Common Stock more than 90% of the number of shares of Company Common Stock that will be outstanding immediately after the issuance of the Top-Up Option Shares; provided, however, that in no event shall the Top-Up Option be exercisable for more than 1,682,784 shares of Company Common Stock. The Top-Up Option may be exercised by Parent or Purchaser, in whole or in part, at any one time on or after the expiration date of the Offer and on or prior to the tenth business day after the later of the expiration date of the Offer or the expiration of any subsequent offering period; provided, however, that the obligation of the Company to deliver Top-Up Option Shares upon the exercise of the Top-Up Option is subject to the condition that no provision of any applicable Law and no judgment, injunction, order or decree shall prohibit the exercise of the Top-Up Option or the delivery of the Top-Up Option Shares in respect of such exercise. The parties shall cooperate to ensure that the issuance of the Top-Up Option Shares is accomplished consistent with all applicable legal requirements of all Governmental Entities, including compliance with an applicable exemption from registration of the Top-Up Option Shares under the Securities Act of 1933, as amended (the “Securities Act”).

(b) In the event Parent or Purchaser wishes to exercise the Top-Up Option, Parent shall so notify the Company and shall set forth in such notice the number of shares of Company Common Stock that are expected to be owned by Parent, Purchaser or any wholly-owned subsidiary of Parent or Purchaser immediately preceding the purchase of the Top-Up Option Shares and a place and time for the closing of the purchase of the Top-Up Option Shares. The Company shall, as soon as practicable following receipt of such notice, notify Parent and Purchaser of the number of shares of Company Common Stock then outstanding and the number of Top-Up Option Shares. At the closing of the purchase of the Top-Up Option Shares, Parent or Purchaser, as the case may be, shall pay the Company the aggregate price required to be paid for the Top-Up Option Shares, and the Company shall cause to be issued to Parent or Purchaser a certificate representing the Top-Up Option Shares.

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ARTICLE 2

THE MERGER

2.1 The Merger. At the Effective Time (as defined in Section 2.3), subject to the terms and conditions of this Agreement and the applicable provisions of the DGCL, Purchaser shall be merged with and into the Company and the separate corporate existence of Purchaser shall thereupon cease. The Company shall be the surviving corporation in the Merger (sometimes hereinafter referred to as the “Surviving Corporation”) and a wholly owned subsidiary of Parent. The Merger shall have the effects specified in Section 259 of the DGCL.

2.2 The Closing. Subject to the terms and conditions of this Agreement, the closing of the Merger (the “Closing”) shall take place at the offices of Fried, Frank, Harris, Shriver & Jacobson, 1001 Pennsylvania Avenue, N.W., Suite 800, Washington D.C., at 10:00 a.m., local time, as soon as practicable following the satisfaction (or waiver if permissible) of the conditions set forth in Article 7. The date on which the Closing occurs is hereinafter referred to as the “Closing Date.”

2.3 Effective Time of the Merger. If all the conditions to the Merger set forth in Article 7 shall have been fulfilled or waived in accordance herewith and this Agreement shall not have been terminated as provided in Section 8.1, the parties hereto shall cause a certificate of merger meeting the requirements of Section 251 of the DGCL (the “Certificate of Merger”) to be properly executed and filed with the Secretary of State of the State of Delaware in accordance with such Section of the DGCL on the Closing Date. The Merger shall become effective at the time of the filing of the Certificate of Merger with the Secretary of State of the State of Delaware in accordance with the DGCL or at such later time which the parties hereto shall have agreed upon and designated in such filing as the effective time of the Merger (the “Effective Time”).

2.4 Certificate of Incorporation, Bylaws, Directors and Officers of the Surviving Corporation. Unless otherwise agreed by the Company and Parent prior to the Closing, at the Effective Time:

(a) The certificate of incorporation of the Surviving Corporation shall be amended and restated in its entirety as set forth in Exhibit A hereto, until duly amended in accordance with applicable Law (as defined in Section 4.3) and the terms thereof;

(b) The bylaws of Purchaser as in effect immediately prior to the Effective Time shall be the bylaws of the Surviving Corporation from and after the Effective Time, until duly amended in accordance with applicable Law, the terms thereof and the Surviving Corporation’s certificate of incorporation and bylaws;

(c) The officers of the Company immediately prior to the Effective Time shall continue to serve in their respective offices of the Surviving Corporation from and after the Effective Time, until their successors are duly appointed or elected in accordance with applicable Law and the Surviving Corporation’s certificate of incorporation and bylaws; and

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(d) The directors of Purchaser immediately prior to the Effective Time shall be the directors of the Surviving Corporation from and after the Effective Time, until their successors are duly appointed or elected in accordance with applicable Law and the Surviving Corporation’s certificate of incorporation and bylaws.

2.5 Special Meeting.

(a) If required by applicable Law in order to consummate the Merger, the Company, acting through its Board of Directors, shall, in accordance with applicable Law:

(i) duly call, give notice of, convene and hold a special meeting of its stockholders (the “Special Meeting”) as promptly as practicable following the acceptance for payment and purchase of Company Shares by the Purchaser pursuant to the Offer for the purpose of considering and taking action upon the approval of the Merger and the adoption of this Agreement;

(ii) prepare and file with the SEC a preliminary proxy or information statement relating to the Merger and this Agreement and use its best efforts (x) to obtain and furnish the information required by the SEC to be included in the Proxy Statement (as defined below) and, after consultation with Purchaser, to respond promptly to any comments made by the SEC with respect to the preliminary proxy or information statement and cause a definitive proxy or information statement, including any amendment or supplement thereto (the “Proxy Statement”), to be mailed to its stockholders, provided that no amendment or supplement to the Proxy Statement will be made by the Company without consultation with Purchaser and its counsel and (y) to obtain the necessary approvals of the Merger and this Agreement by its stockholders; and

(iii) include in the Proxy Statement the recommendation of the Board of Directors that stockholders of the Company vote in favor of the approval of the Merger and the adoption of this Agreement.

(b) Parent shall vote, or cause to be voted, all of the Company Shares then owned by it or any of its subsidiaries and Affiliates in favor of the approval of the Merger and the adoption of this Agreement. Purchaser shall not sell, transfer, assign, encumber or otherwise dispose of the Company Shares acquired pursuant to the Offer to Purchase or otherwise prior to the Special Meeting convened pursuant to this Section 2.5.

2.6 Merger Without Meeting of Stockholders. Notwithstanding Section 2.5 hereof, in the event that Purchaser or any subsidiary of Parent shall acquire at least 90% of the outstanding Company Shares, pursuant to the Offer or otherwise, the parties hereto shall, at the request of Purchaser and subject to Article 8 hereof, take all necessary and appropriate action to cause the Merger to become effective as soon as practicable after such acquisition, without a meeting of stockholders of the Company, in accordance with Section 253 of the DGCL.

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ARTICLE 3

CONVERSION OF SECURITIES

3.1 Purchaser Stock. At the Effective Time, each share of common stock, par value $.01 per share, of Purchaser that is issued and outstanding immediately prior to the Effective Time shall, by virtue of the Merger and without any action on the part of Parent, Purchaser, the Company or the holder thereof, be converted into and exchanged for one validly issued, fully paid and nonassessable share of common stock, par value $.01 per share, of the Surviving Corporation.

3.2 Company Securities. (a) At the Effective Time, each Company Share issued and outstanding immediately prior to the Effective Time (other than shares of Company Common Stock owned by Parent or Purchaser or held by the Company, all of which shall be canceled, and other than shares of Dissenting Common Stock (as defined in Section 3.6)) shall, by virtue of the Merger and without any action on the part of Parent, Purchaser, the Company or the holder thereof, be converted into the right to receive the Per Share Amount, in cash without interest.

(b) All shares of Company Common Stock (other than shares to be canceled in accordance with Section 3.2(c)) shall cease to be outstanding and shall be canceled and shall cease to exist, and each holder of shares of Company Common Stock (other than Purchaser and Parent) shall thereafter cease to have any rights with respect to such shares of Company Common Stock, except, subject to Section 3.6, the right to receive, without interest, the Per Share Amount in accordance with Section 3.4 upon the surrender of a certificate or certificates (a “Certificate”) representing such shares of Company Common Stock.

(c) Each share of Company Common Stock issued and held in the Company’s treasury at the Effective Time, or held by Purchaser or Parent, shall, by virtue of the Merger, cease to be outstanding and shall be canceled without payment of any consideration therefor.

3.3 Company Options; ESPP. (a) Immediately upon acceptance of the Company Shares pursuant to the Offer, (i) each outstanding Option (as such term is defined in the Company’s Amended and Restated 1997 Incentive Plan (the “Company Incentive Plan”)) to purchase Company Common Stock that was granted under the Company Incentive Plan shall vest and become immediately and fully exercisable and (ii) if so provided in the option agreement evidencing the Option and permitted by the Company Incentive Plan, each holder (the “Optionee”) of such Option may surrender for cancellation, within sixty (60) days after acceptance of the Company Shares pursuant to the Offer, the Option or any portion of the Option to the extent not yet exercised (the “Cash-Out Election”) and the Optionee shall be entitled to receive a cash payment (without interest and subject to applicable withholdings) in an amount equal to the excess, if any, of (A) the Option Value (as defined below) of the Shares (as such term is defined in the Company Incentive Plan), subject to the Option or portion of such Option surrendered, over (B) the aggregate exercise price of such Option or portion of such Option surrendered (the “Cash Payment”). For purposes of this Section 3.3(a), “Option Value” means (i) with respect to each outstanding Option that is designated as an “Incentive Stock Option”

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within the meaning of Section 422 of the Code, the Fair Market Value (as such term is defined in the Company Incentive Plan), on the date preceding the date of surrender, of the Shares subject to the Option or portion of such Option surrendered, or (ii) with respect to each outstanding Option that is not designated as an “Incentive Stock Option” within the meaning of Section 422 of the Code, the greater of (1) the Fair Market Value (as such term is defined in the Company Incentive Plan) on the date preceding the date of surrender, of the Shares subject to the Option or portion of such Option surrendered, or (2) the Adjusted Fair Market Value (as such term is defined in the Company Incentive Plan) of the Shares subject to the Option or portion of such Option surrendered. With respect to an Option or portion of an Option surrendered on or after the Effective Time (except for purposes of determining the Adjusted Fair Market Value of the Shares during the 60-day period ending on the date of acceptance of the Company Shares pursuant to the Offer), references to “Shares” in this Section 3.3(a) shall be deemed to be references to the consideration which the Optionee shall be entitled to receive upon exercise of the Option pursuant to Section 3.3(c) below. With respect to any Option or any portion of such Option to which an effective Cash-Out Election is made (a “Cash-Out Option”), the Parent shall take all action necessary so that as of the date of the Cash-Out Election, each Cash-Out Option will be canceled and in consideration of such cancellation, the Parent shall immediately pay, or cause to be immediately paid, the Cash Payment to the holder of such Cash-Out Option.

(b) At the Effective Time, each option to purchase Company Common Stock that was granted under the Company’s 1995 Non-Qualified Stock Option Plan (the “1995 Option Plan”) or the Company’s 1988 Incentive Stock Option Plan (the “1988 Option Plan” and together with the 1995 Option Plan, the “Prior Option Plans”) that is outstanding immediately prior to the Effective Time (a “Prior Option”) shall be assumed by Parent and converted into an option (an “Assumed Option”) to purchase the number of shares of the common stock, $0.01 par value per share, of Parent (“Parent Stock”) equal to the product of the number of shares of Company Common Stock that were issuable upon exercise of such Prior Option immediately prior to the Effective Time multiplied by the Conversion Ratio (as defined below), rounded to the nearest whole share, with 0.5 shares being rounded up. The per share exercise price of each Assumed Option shall be equal to the quotient obtained by dividing the per share exercise price of the corresponding Prior Option immediately prior to the Effective Time by the Conversion Ratio, rounded to the nearest whole cent; with 0.5 cents being rounded down; provided, however, that if Section 421 of the Code applies to such Prior Option by reason of its qualification under Section 422 of the Code, then the exercise price of the corresponding Assumed Option, the number of shares purchasable pursuant to Assumed Option and the terms and conditions of exercise of such Assumed Option shall be determined in order to comply with Section 424 of the Code. Except for the foregoing adjustments, all of the terms and conditions in effect for each Prior Option immediately prior to the Effective Time shall continue in effect following the assumption thereof in accordance with this Agreement and its terms (including any terms regarding adjustments for stock splits and similar transactions). For purposes of this Section 3.3(b), the term “Conversion Ratio” means the ratio of (A) the Per Share Amount to (B) the Parent Stock Value. “Parent Stock Value” means the volume weighted average price of Parent Stock on the Nasdaq National Market (“Nasdaq”) for the trading day preceding the Effective Time, as reported by Bloomberg L.P. Prior to the Effective Time, the Company shall take such additional actions as are necessary under applicable Law and the applicable agreements and the Prior Option Plans to ensure that each outstanding Prior Option shall, from and after the

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Effective Time, represent only the right to receive the Assumed Option as contemplated by this Section 3.3(b).

(c) All outstanding Options with respect to which an effective Cash-Out Election has not been made immediately prior to the Effective Time (collectively, the “1997 Plan Options” and, together with the Prior Options, the “Company Options”), shall be assumed by Parent at the Effective Time, and each such 1997 Plan Option shall continue in effect in accordance with its terms, except that following the Effective Time the holder of the 1997 Plan Option shall, upon the exercise thereof in full and payment of the aggregate exercise price therefor, be entitled to receive, in respect of the shares of Company Common Stock subject to the 1997 Plan Option immediately prior to the Effective Time, an amount in cash (without interest and subject to applicable withholdings) equal to the Per Share Amount multiplied by the number of shares of Company Common Stock subject thereto immediately prior to the Effective Time. Prior to the Effective Time, the Company shall take such additional actions as are necessary under applicable Law and the applicable agreements and Company Incentive Plan to ensure that each outstanding Option shall, from and after the Effective Time, represent only the right to receive the Cash Payment contemplated by Section 3.3(a) above or, upon exercise of the Option and payment of the exercise price therefor, the consideration subject to the Option contemplated by this Section 3.3(c).

(d) As soon as practicable after the Effective Time, Parent shall file with the SEC a registration statement on Form S-8 with respect to all shares of Parent Stock which are subject to the Assumed Options.

(e) The Board of Directors shall designate the earlier of February 29, 2004 or the date of the acceptance of the Company Shares pursuant to the Offer as the last day of any Purchase Period (as such term is defined in the Company’s 2001 Employee Stock Purchase Plan (the “Company ESPP”, and together with the Company Incentive Plan, the “Company Stock Plans”)), then in progress under the Company ESPP, and the Company ESPP shall terminate and all rights to purchase shares of Company Common Stock thereunder shall be extinguished as of such date. The Company shall take such actions as are necessary under applicable Law and the Company ESPP to treat the applicable date referenced in the preceding sentence as the last day of the current Purchase Period (as such term is defined in the Company ESPP) and to suspend any new purchase periods under the Company ESPP. The Company shall promptly notify Parent of the number of shares of Company Common Stock hereafter acquired under the Company ESPP.

(f) Parent and the Company shall take all such steps as may be required to cause the dispositions of Company equity securities (including derivative securities) and acquisitions of Parent equity securities (including derivative securities) in connection with this Section 3.3 to be exempt under Rule 16b-3 promulgated under the Exchange Act.

(g) Parent shall, prior to the Effective Time, take all action necessary so that, at the Effective Time, by virtue of the Merger and without the need of any further corporate action, Parent shall assume the Company Incentive Plan.

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3.4 Exchange of Certificates Representing Company Common Stock. (a) Prior to the Effective Time, Parent shall appoint a commercial bank or trust company, subject to the reasonable satisfaction of the Company, to act as exchange agent hereunder for the purpose of paying the Per Share Amount upon surrender of the Certificates in accordance with this Article 3 (the “Exchange Agent”). At or promptly following the Effective Time, Parent shall deposit or cause to be deposited with the Exchange Agent in trust for the benefit of the Company’s stockholders the Per Share Amount to be delivered in exchange for all of the shares of Company Common Stock pursuant to this Article 3. Any cash deposited with the Exchange Agent shall be referred to as the “Exchange Fund.” The Exchange Agent shall cause the Exchange Fund to be (i) held for the benefit of the holders of shares of Company Common Stock and (ii) promptly applied to making the payments provided for in Section 3.2(a). Any income from investment of the cash in the Exchange Fund will be payable solely to Parent.

(b) As promptly as possible after the Effective Time, Parent shall instruct the Exchange Agent to mail to each holder of record of shares of Company Common Stock: (i) a letter of transmittal which shall specify that delivery shall be effected, and risk of loss and title to such Certificate(s) shall pass, only upon delivery of such Certificate(s) to the Exchange Agent and which letter shall be in such form and have such other provisions as are customary for letters of this nature and (ii) instructions for effecting the surrender of such Certificate(s) in exchange for the Per Share Amount (which shall provide that, at the election of the surrendering holder, such Certificate(s) may be surrendered, and payment therefor collected, by hand delivery). Upon surrender of such Certificate(s) to the Exchange Agent together with such letter of transmittal, duly executed and completed in accordance with the instructions thereto, and such other documents as may be reasonably required by the Exchange Agent, the holder of such Certificate(s) shall be entitled to receive in exchange therefor the amount of cash, without interest, into which shares of Company Common Stock formerly represented by such Certificate(s) shall have been converted into the right to receive pursuant to Section 3.2, after giving effect to any required Tax (as defined in Section 4.9) withholdings, and the shares formerly represented by the Certificate(s) so surrendered shall forthwith be canceled. No interest will be paid or will accrue on the cash payable upon surrender of any Certificate(s). In the event of a transfer of ownership of Company Common Stock that is not registered in the transfer records of the Company, payment may be made with respect to such Company Common Stock to such a transferee if such Certificate(s) representing such shares of Company Common Stock is presented to the Exchange Agent, accompanied by all documents required to evidence and effect such transfer and to evidence that any applicable transfer or other Taxes have been paid. Until surrendered as contemplated by this Section 3.4(b), each Certificate (other than Certificates representing Dissenting Common Stock (as defined in Section 3.6)) shall be deemed at any time after the Effective Time to represent only the right to receive upon such surrender the amount of cash, without interest, into which the shares of Company Common Stock theretofore represented by such Certificate(s) shall have been converted pursuant to this Article 3. Parent, Purchaser or the Exchange Agent shall be entitled to deduct and withhold from the Per Share Amount otherwise payable pursuant to this Agreement to any holder of shares of Company Common Stock of the Company such amounts as Parent, Purchaser or the Exchange Agent are required to deduct and withhold under the Code, or any provision of state, local or foreign tax Law, with respect to the making of such payment. To the extent the amounts are so withheld by Parent, Purchaser or the Exchange Agent, such withheld amounts shall be treated for all purposes of this

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Agreement as having been paid to the holder of shares of Company Common Stock in respect of whom such deduction and withholding was made by Parent, Purchaser or the Exchange Agent.

(c) All cash paid upon surrender of Certificates in accordance with the terms of this Article 3 shall be deemed to have been issued and paid in full satisfaction of all rights pertaining to the shares of Company Common Stock theretofore represented by such Certificates. At or after the Effective Time, there shall be no transfers on the stock transfer books of the Company of the shares of Company Common Stock that were outstanding immediately prior to the Effective Time. If, after the Effective Time, Certificates are presented to the Surviving Corporation, they shall be canceled and exchanged as provided in this Article 3.

(d) Any portion of the Per Share Amount made available to the Exchange Agent pursuant to Section 3.4(a) (including the proceeds of any interest and other income received by the Exchange Agent in respect of all such funds) that remains undistributed to the former stockholders of the Company six (6) months after the Effective Time shall be delivered to Parent, upon demand. Any former stockholders of the Company who have not theretofore complied with this Article 3 shall thereafter look only to Parent for payment of any Per Share Amount, without any interest thereon, that may be payable in respect of each share of Company Common Stock such stockholder held as of the Effective Time as determined pursuant to this Agreement.

(e) None of Parent, the Company, the Surviving Corporation, the Exchange Agent or any other Person shall be liable to any former holder of shares of Company Common Stock for any amount properly delivered to a public official pursuant to applicable abandoned property, escheat or similar Laws.

(f) In the event 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 Surviving Corporation, either the posting by such Person of a bond in such reasonable amount as the Surviving Corporation may direct as indemnity against any claim which may be made against it with respect to such Certificate or delivery of a writing by such Person to fully indemnify the Surviving Corporation and the Exchange Agent against any claim that may be made against them with respect to the certificates alleged to have been lost, stolen or destroyed, the Exchange Agent will issue in exchange for such lost, stolen or destroyed Certificate the Per Share Amount payable in respect thereof pursuant to this Agreement.

(g) Parent or Purchaser shall pay all of the Exchange Agent’s fees in connection with the exchange of the Per Share Amount for Certificates.

3.5 Adjustment of Per Share Amount. In the event that, subsequent to the date of this Agreement but prior to the Effective Time, the outstanding shares of Company Common Stock shall have been changed into a different number of shares or a different class as a result of a stock split, reverse stock split, stock dividend, subdivision, reclassification, split, combination, exchange, recapitalization or other similar transaction, the Per Share Amount shall be appropriately adjusted.

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3.6 Dissenting Company Stockholders. Notwithstanding any provision of this Agreement to the contrary, shares of Company Common Stock that are issued and outstanding immediately prior to the Effective Time and which are held by holders of such shares of Company Common Stock who have properly exercised appraisal rights with respect thereto in accordance with Section 262 of the DGCL (the “Dissenting Common Stock”) will not be exchangeable for the right to receive the Per Share Amount, and holders of such shares of Dissenting Common Stock will be entitled to receive payment of the appraised value of such shares of Company Common Stock in accordance with the provisions of such Section 262 unless and until such holders fail to perfect or effectively withdraw or lose their rights to appraisal and payment under the DGCL. If, after the Effective Time, any such holder fails to perfect or effectively withdraws or loses such right, such shares of Company Common Stock will thereupon be treated as if they had been converted into and have become exchangeable for, at the Effective Time, the right to receive the Per Share Amount, without any interest thereon. The Company shall give Parent: (i) prompt notice of any demands for payment received by the Company pursuant to Section 262 of the DGCL, withdrawals of such demands and any other instruments served pursuant to the DGCL and received by the Company and (ii) the right to participate in all negotiations and proceedings with respect to any such demand for appraisal under the DGCL. The Company shall not, except with the prior written consent of Parent, make any payment with respect to any demands for appraisal or offer to settle or settle any such demands.

3.7 No Further Ownership Rights in Company Common Stock. From and after the Effective Time, the holders of the shares of Company Common Stock which were outstanding immediately prior to the Effective Time shall cease to have any rights with respect to such shares except as otherwise provided in this Agreement or by applicable Law. All cash paid upon the surrender of Certificates in accordance with the terms hereof shall be deemed to have been paid in full satisfaction of all rights pertaining to the shares of Company Common Stock formerly represented by the Certificates.

3.8 Closing of Company Transfer Books. At the close of business on the day on which the Effective Time occurs, the stock transfer books of the Company shall be closed, and there shall be no further registration of transfers on the stock transfer books of the Surviving Corporation of the shares of Company Common Stock that were outstanding immediately prior to the Effective Time. If, after the Effective Time, Certificates are presented to the Surviving Corporation or the Exchange Agent for transfer or any other reason, they shall be canceled and exchanged as provided in this Article 3.

ARTICLE 4

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

Except as set forth in the corresponding sections of the disclosure schedule delivered by the Company to Parent concurrently with the execution of this Agreement (the “Company Disclosure Schedule”) provided that the listing of an item in one section of the Company Disclosure Schedule shall be deemed to be a listing in each section of the Company Disclosure Schedule to the extent it is reasonably and readily apparent from a reading of such disclosure item that it would also apply to such other sections of the Company Disclosure Schedule, the

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Company represents and warrants to Parent and Purchaser as of the date of this Agreement as follows:

4.1 Existence; Good Standing; Corporate Authority. Each of the Company and its subsidiaries (i) is duly organized, validly existing and in good standing under the Laws of its respective jurisdiction of organization, (ii) has all requisite corporate power and authority to own or lease and operate its properties and carry on its business as now conducted and (iii) is duly licensed or qualified to do business as a foreign corporation and is in good standing under the Laws of any other jurisdiction in which the character of the properties owned or leased by it or in which the transaction of its business makes such qualification necessary, except where the failure to be so qualified or to be in good standing would not, individually or in the aggregate, have a Company Material Adverse Effect (as defined in Section 9.7(d)). The Company has heretofore made available to Parent true, accurate and complete copies of its certificate of incorporation and bylaws and the certificates of incorporation and bylaws of each of its subsidiaries, each as amended to date and as currently in effect.

4.2 Authorization, Validity and Effect of Agreements. The Company has the requisite corporate power and authority to execute and deliver this Agreement, to perform its obligations hereunder and, subject to the approval of the Merger by the Company’s stockholders in accordance with the DGCL, to consummate the transactions contemplated hereby. The execution and delivery of this Agreement by the Company and the consummation by the Company of the transactions contemplated hereby have been duly and validly authorized by all necessary corporate action, and no other corporate proceedings on the part of the Company are necessary to authorize this Agreement or to consummate the transactions contemplated hereby (other than the approval of this Agreement by the Company’s stockholders in accordance with the DGCL). This Agreement has been duly and validly executed and delivered by the Company, and (assuming the valid authorization, execution and delivery of this Agreement by Parent and Purchaser) constitutes a valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, subject to applicable bankruptcy, insolvency, moratorium or other similar Laws relating to creditors’ rights and general principles of equity.

4.3 Compliance with Laws. Neither the Company nor any of its subsidiaries is in violation of, and neither the Company nor any of its subsidiaries has received any notice of any violations with respect to, any order of any domestic or foreign (whether national, federal, state, provincial, local or otherwise) government or any court, administrative agency or commission or other governmental or regulatory authority or agency, domestic, foreign or supranational (“Governmental Entity”), or any foreign, federal, state or local law, statute, ordinance, rule, regulation, order, judgment or decree (“Laws”) applicable to the Company or any of its subsidiaries or any of their respective properties or assets, except for violations that, individually or in the aggregate, would not have a Company Material Adverse Effect or prevent or delay the consummation of the transactions contemplated hereby.

4.4 Capitalization, etc./Subsidiaries.

(a) The authorized capital stock of the Company consists of 15,000,000 shares of Company Common Stock, and 6,900,000 shares of preferred stock, par value $.01 per share (“Preferred Stock”). As of the close of business on November 30, 2003,

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(i) 8,399,481 shares of Company Common Stock were issued and outstanding, (ii) no shares of Preferred Stock were issued and outstanding, (iii) 190,242 shares of Company Common Stock were held by the Company in its treasury, (iv) 935,856 shares of Company Common Stock were reserved for issuance upon the exercise of outstanding stock options under the Company Incentive Plan, (v) 1,499 shares of Company Common Stock were reserved for issuance upon the exercise of outstanding stock options under the Company’s 1995 Option Plan, (vi) no shares of Company Common Stock were reserved for issuance upon the exercise of outstanding stock options under the Company’s 1994 Incentive Stock Option Plan, (vii) 1,625 shares of Company Common Stock were reserved for issuance upon the exercise of outstanding stock options under the Company’s 1988 Option Plan, (viii) 187,856 shares of Company Common Stock were reserved for issuance under the Company ESPP, and, (ix) no shares of capital stock of the Company were held by the Company’s subsidiaries.

(b) The Company Disclosure Schedule sets forth a complete and accurate list as of November 30, 2003, of (i) the number of outstanding Company Options, (ii) the holders thereof, (iii) whether such holders are employees of the Company or any of its subsidiaries, (iv) the grant date or issue date and vesting status of such options, (v) the number of shares of Company Common Stock that can be acquired upon the exercise of each outstanding Company Option, and (vi) the exercise price of each outstanding Company Option.

(c) The Company has no outstanding bonds, debentures, notes or other obligations entitling the holders thereof to vote (or which are convertible into or exercisable for securities having the right to vote) with the holders of the shares of Company Common Stock on any matter (collectively, “Voting Debt”).

(d) Since November 30, 2003, the Company (i) has not issued any shares of Company Common Stock or Preferred Stock other than upon the exercise of Company options or pursuant to the Company ESPP, (ii) has granted no options to purchase shares of Company Common Stock, under or pursuant to the Company Stock Plans or otherwise, to the executive officers of the Company, or to any other party under the Company Stock Plans or otherwise, and (iii) has not split, combined or reclassified any of its shares of capital stock.

(e) All of such Company Options have been granted to directors, officers, consultants, advisors and employees of the Company or any subsidiary in the ordinary course of business consistent with past practice. The Company has delivered to Parent complete and correct copies of all plans pursuant to which Company Options were granted and all forms of Company Options.

(f) All issued and outstanding shares of Company Common Stock are duly authorized, validly issued, fully paid, nonassessable and free of preemptive rights. There are no other shares of capital stock or voting securities of the Company, and no existing options, warrants, calls, subscriptions, convertible securities, stock appreciation rights or limited stock appreciation rights, phantom stock rights, stock units, performance rights or other equity-based awards or other rights (including rights of first refusal), agreements or commitments which obligate the Company or any of its subsidiaries to issue, transfer or sell any shares of capital stock of, or equity interests in, or any material assets of, the Company or any of its subsidiaries or of any Voting Debt, or obligating the Company or any subsidiary to grant, extend or enter into

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any such option, warrant, call, subscription, convertible securities, stock appreciation rights, limited stock appreciation rights or other rights, arrangement or commitment. There are no outstanding obligations of the Company or any of its subsidiaries to repurchase, redeem or otherwise acquire any shares of capital stock of the Company. There are no voting trusts or other agreements or understandings to which the Company or any of its subsidiaries is a party with respect to the voting of capital stock of the Company or any of its subsidiaries.

(g) The Company owns, directly or indirectly, all of the outstanding shares of capital stock of each of its subsidiaries. All of the outstanding shares of capital stock of each subsidiary of the Company are duly authorized, validly issued, fully paid and nonassessable, and are owned, directly or indirectly, by the Company free and clear of all pledges, claims, liens, charges, encumbrances and security interests of any kind or nature whatsoever (collectively, “Liens”). The Company Disclosure Schedule sets forth all of the subsidiaries of the Company. Other than ownership of the capital stock or other ownership interests of its subsidiaries, the Company does not own, directly or indirectly, any capital stock or other ownership interest in any corporation, partnership, joint venture or other entity. Neither the Company nor any of its subsidiaries is subject to any obligation or requirement to make any loan, capital contribution, investment or similar expenditure to or to assume any liability or obligation of, any Person. Except as provided by applicable Law, there are no restrictions of any kind which prevent the payment of dividends by any subsidiary.

4.5 No Violation; Consent. (a) Except as set forth on the Company Disclosure Schedule, the execution and delivery by the Company of this Agreement do not, and the consummation by the Company of the transactions contemplated hereby will not (i) violate, conflict with or result in a breach of any provision of the certificate of incorporation or bylaws (or similar organizational documents) of the Company or any subsidiary, (ii) violate, conflict with, result in a breach of any provision of, constitute a default (or an event that, with notice or lapse of time or both, would constitute a default) under, result in the termination or in a right of termination of, accelerate the performance required by or benefit obtainable under, result in the triggering of any payment or other obligations pursuant to, result in the creation of any Lien upon any of the properties of the Company or any of its subsidiaries under, or result in there being declared void, voidable or without further binding effect, any of the terms, conditions or provisions of any note, bond, mortgage, indenture, deed of trust or any license, franchise, permit, lease, contract, agreement or other instrument, commitment or obligation 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, except for any of the foregoing matters specified in this subsection (ii) that individually or in the aggregate would not have a Company Material Adverse Effect or would prevent or delay the consummation of the transactions contemplated hereby; or (iii) assuming compliance with the matters referred to in (b) below, violate any Laws applicable to the Company, any of its subsidiaries or any of their respective assets.

(b) No consent, approval, order or authorization of, or declaration, filing or registration with, any Governmental Entity is required by or with respect to the Company or any of its subsidiaries in connection with the execution and delivery of this Agreement by the Company or the consummation by the Company of the transactions contemplated hereby or compliance with the provisions hereof, except for (i) the filing of a premerger notification and report form by the Company under the Hart-Scott-Rodino Antitrust

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Improvements Act of 1976, as amended (the “HSR Act”), and the receipt, termination or expiration, as applicable, of such other approvals or waiting periods required under any other applicable competition, merger control, antitrust or similar Law or regulation, or under antitrust or other competition laws of other jurisdictions, (ii) the filing with the SEC of a proxy statement or, if applicable, an information statement, relating to the Merger and this Agreement (as amended or supplemented from time to time, the “Proxy Statement”) and such reports under the Exchange Act as may be required in connection with this Agreement, the Merger and the other transactions contemplated hereby, (iii) the filing of the Certificate of Merger with the Secretary of State of the State of Delaware and appropriate documents with the relevant authorities of other states in which the Company or any of its subsidiaries is qualified to do business, (iv) any filings required under the rules and regulations of the Nasdaq and (v) all other consents, approvals, orders, authorizations, declarations, filings and/or registrations the failure of which to be obtained or make would not, individually or in the aggregate, have a Company Material Adverse Effect or prevent or delay the consummation of the transactions contemplated hereby.

4.6 Company Reports. (a) The Company has filed with the SEC all reports, schedules, forms, statements and other documents required to be filed with the SEC under the Securities Act or the Exchange Act since January 1, 2001, including the financial statements, exhibits and schedules provided therein or incorporated by reference therein (the “Company Reports”). No subsidiary of the Company is required to file any form, report, registration statement, prospectus or other document with the SEC. As of their respective dates (and as of the date of any amendment), the Company Reports complied, in all material respects, with the requirements of the Securities Act or the Exchange Act, as the case may be, and the rules and regulations of the SEC promulgated thereunder applicable to such Company Reports, and did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. The Company Reports, together with any public announcements in a news release issued by the Dow Jones News Service, PR Newswire or any equivalent service (collectively, a “Dow Jones News Release”) made by the Company after the date hereof taken as a whole, as of the Effective Time, will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances existing as of the Effective Time, not misleading.

(b) Each of the consolidated balance sheets of the Company included in the Company Reports (including the related notes and schedules) fairly presented in all material respects the consolidated financial position of the Company and its subsidiaries as of its date, and each of the consolidated statements of operations, cash flows and stockholders’ equity of the Company included in or incorporated by reference into the Company Reports (including the related notes and schedules) fairly presented in all material respects the results of operations, cash flows and stockholders’ equity of the Company and its subsidiaries for the periods set forth therein, in each case in accordance with generally accepted accounting principles (“GAAP”) consistently applied during the periods involved, except as may be noted therein and except that the unaudited interim financial statements are subject to normal year-end adjustments and do not contain all of the footnote disclosures required by GAAP.

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(c) Except as set forth in the Company Reports, the Company and its subsidiaries have no liabilities or obligations of any nature (whether accrued, absolute, contingent or otherwise), known or unknown, other than (i) liabilities for Taxes, (ii) liabilities incurred in the ordinary course of business since September 30, 2003, and (iii) liabilities and obligations that, individually or in the aggregate, would not have a Company Material Adverse Effect.

(d) The Company’s disclosure controls and procedures (as defined in Sections 13a-15(e) and 15d-15(e) of the Exchange Act) effectively enable the Company to comply in all material respects with, and the appropriate officers of the Company to make all certifications required under, the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”) and the regulations promulgated thereunder. The appropriate officers of the Company have made all such certifications required by Section 302 and 906 of the Sarbanes-Oxley Act and the regulations promulgated thereunder and the rules and regulations of the SEC.

4.7 Litigation. As of the date hereof, (i) there are no claims, actions, suits, proceedings, arbitrations, investigations or audits (collectively, “Litigation”) pending or, to the knowledge (as defined in Section 9.7(g)) of the Company, threatened against the Company or any of its subsidiaries, at Law or in equity, except Litigation in the ordinary course of business that, individually or in the aggregate, would not have a Company Material Adverse Effect or prevent or delay the consummation of the transactions contemplated hereby, (ii) no Governmental Entity has indicated in writing an intention to conduct any audit, investigation or other review with respect to the Company or any of its subsidiaries, except for audits, investigations or reviews that are in the ordinary course of business consistent with past practice or would not, individually or in the aggregate, have a Company Material Adverse Effect or prevent or delay the consummation of the transactions contemplated hereby, if adversely determined; and (iii) there is no material judgment, decree, order, injunction, writ or rule of any court, governmental department, commission, agency, instrumentality or authority or any arbitrator outstanding against the Company or any of its subsidiaries.

4.8 Absence of Certain Changes. Except as set forth in the Company Reports, from January 1, 2003 through the date hereof, the Company and its subsidiaries have operated their business in all material respects in the ordinary course consistent with past practices and there has not occurred, (i) any Company Material Adverse Effect or event reasonably likely to result in a Company Material Adverse Effect, (ii) any amendments or changes in the certificate of incorporation or bylaws of the Company, (iii) except insofar as may have been required by GAAP or applicable Law, any material change by the Company or any of its subsidiaries in its accounting methods, principles or practices, (iv) any declaration, setting aside or payment of any dividend or distribution in respect of any capital stock of the Company or any redemption, repurchase or other acquisition of any of its securities, or (v) other than pursuant to the contractual arrangements listed or if not in writing, summarized in Section 4.8 of the Company Disclosure Schedule, any increase in or establishment of any bonus, insurance, severance, deferred compensation, pension, retirement, profit sharing, stock option (including, without limitation, the granting of stock options, stock appreciation rights, performance awards or restricted stock awards), stock purchase or other employee benefit plan, or except in the ordinary course of business consistent with past practice, any other increase in the compensation payable

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or to become payable to any officers, directors or key employees of the Company or any subsidiary.

4.9 Taxes. (a) Each of the Company and its subsidiaries has timely filed (taking into account extensions of time to file) all income Tax and other material Tax Returns (as defined below) that it was required to file, and such Tax Returns are true, complete and correct in all material respects. Each of the Company and its subsidiaries has paid all Taxes due and owing by it with respect to such Tax Returns, except for those Taxes for which adequate reserves have been established in the financial statements included in the Company Reports.

(b) The Company Disclosure Schedule lists all material Tax Returns filed with respect to any of the Company and its subsidiaries for taxable periods ended on or after January 1, 2000. There are no audits or other administrative proceedings or court proceedings presently pending or proposed with respect to any income Tax and other material Tax Returns of the Company or any of its subsidiaries, and neither the Company nor any of its subsidiaries has received notice of any pending or proposed claims, audits or proceedings with respect to Taxes. Neither the Company nor any of its subsidiaries has received any notice of deficiency or assessment from any taxing authority for any amount of Tax, and no such deficiency or assessment is proposed.

(c) Neither the Company nor any of its subsidiaries has requested an extension of time within which to file any income Tax or other material Tax Returns which have not since been filed. Neither the Company nor any of its subsidiaries has waived any statute of limitations in respect of Taxes or agreed to any extension of time with respect to a Tax assessment or deficiency.

(d) Except as listed on the Company Disclosure Schedule, neither the Company nor any of its subsidiaries is a party to any Tax allocation or sharing agreement.

(e) Each of the Company and its subsidiaries has complied in all material respects with its obligations to withhold and pay over to the relevant taxing authority all Taxes required to have been withheld and paid in connection with payments to employees, independent contractors, creditors, stockholders or other third parties.

(f) There are no liens for Taxes upon any property or assets of the Company or any of its subsidiaries, except for liens for Taxes not yet due.

(g) Neither the Company nor any of its subsidiaries has been included in any consolidated, unitary or combined Tax Return (other than Tax Returns which include only the Company and any of its subsidiaries).

(h) The Company has not been a party to the distribution of stock of a controlled corporation as defined in Section 355(a) of the Code in a transaction intended to qualify under Section 355 of the Code within the past two years.

(i) Each of the Company and its subsidiaries has substantial authority for the treatment of or has disclosed (in accordance with Section 6662(d)(2)(B)(ii) of the Code)

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on its federal income Tax Returns all positions taken therein that could give rise to a substantial understatement of federal income Tax within the meaning of Section 6662(d) of the Code.

For purposes of this Agreement, “Tax” means any and all federal, state, local or foreign income, gross receipts, property, sales, use, license, excise, franchise, employment, payroll, premium, withholding, alternative or added minimum, ad valorem, value added, estimated, stamp, occupation, services, service use, intangible, net worth, transfer or excise tax, recording or any other tax, custom, duty, governmental fee or other like assessment or charge of any kind whatsoever, together with any interest or penalty, imposed by any taxing authority and “Tax Return” means any return, document, declaration, election, report or similar statement required to be filed with respect to any Tax (including any attached schedules), including, without limitation, any information return, claim for refund, request for extension of time, amended return or declaration of estimated Tax.

4.10 Employee Benefit Plans. (a) For purposes of this Agreement, “Company Employee Benefit Plans” means all “employee benefit plans,” as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) (whether or not subject to ERISA), and all other employee benefit or compensation plans, policies, agreements or arrangements, including, without limitation, any severance pay, sick leave, vacation pay, paid personal leave, salary continuation for disability, retirement benefits, deferred compensation, bonus pay, incentive pay, stock options (including those held by directors, employees and consultants), equity-based compensation, change-in-control, golden parachute, fringe benefit, hospitalization insurance, medical insurance, life insurance, scholarship or tuition reimbursement plans, policies, agreements or arrangements, that are maintained by the Company or any of its subsidiaries or to which the Company or any of its subsidiaries is a party to, with or obligated to contribute thereunder for current or former directors, employees, independent contractors, consultants and leased employees of the Company or any of its subsidiaries who are employed or providing services or formerly providing services in the United States. The Company Disclosure Schedule lists each Company Employee Benefit Plan.

(b) Except as contemplated by this Agreement or as set forth in the Company Disclosure Schedule, neither the execution of, nor the consummation of the transactions contemplated in this Agreement will, either alone or upon the occurrence of subsequent events, result in or cause any payment (whether of severance pay or otherwise), acceleration, forgiveness of indebtedness, vesting, distribution, increase in benefits or obligation to fund benefits with respect to any director or employee or Company Employee Benefit Plan.

(c) The Company Employee Benefit Plans have been maintained in all material respects in accordance with their terms and with all provisions of ERISA and the Code and all other applicable federal and state Laws and regulations. The Company has made available to the Purchaser true and complete copies of each Employment Agreement (as defined in Section 9.7(e)) and each Company Employee Benefit Plan, as well as certain related documents, including, but not limited to, (i) the actuarial report for such Company Employee Benefit Plan (if applicable) for each of the last two years, (ii) the most recent determination letter from the Internal Revenue Service (“IRS”) (if applicable) for such Company Employee Benefit Plan, (iii) the two most recent annual reports (Series 5500 and related schedules) required under ERISA (if any), and (iv) the most recent summary plan descriptions (with all material

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modifications). Each of the Company Employee Benefit Plans intended to be “qualified” within the meaning of Section 401(a) of the Code is so qualified and each such plan has been determined by the IRS to be qualified under such Section and its related trust has been determined to be exempt from taxation under Section 501(a) of the Code (or has time remaining under applicable IRS pronouncements to apply for and obtain such a determination letter) and, to the knowledge of the Company, no event has occurred since the date of such determination which would cause the loss of such qualified or exempt status. There are no pending, or to the knowledge of the Company, threatened or anticipated claims (other than routine claims for benefits) by, on behalf of or against any of the Company Employee Benefit Plans or any trusts related thereto or pursuant to any Employment Agreement. Neither the Company nor any ERISA Affiliate (as defined in Section 9.7(f)) currently sponsors, maintains or contributes to, and is not required to contribute to, nor has ever sponsored, maintained, contributed to (or been required to contribute to), or incurred any liability with respect to any “employee benefit plan” (within the meaning of Section 3(3) of ERISA) that is subject to Section 302 or Title IV of ERISA. No “prohibited transaction,” within the meaning of Section 4975 of the Code or Section 406 of ERISA, has occurred with respect to any Company Employee Benefit Plan. No liability under any Company Employee Benefit Plan has been funded nor has any such obligation been satisfied with the purchase of a contract from an insurance company as to which the Company has received notice that such insurance company is insolvent or is in rehabilitation or any similar proceeding. To the Company’s knowledge, no Company Employee Benefit Plan is under audit or investigation by, or is the subject of a proceeding with respect to, the IRS, the Department of Labor or the Pension Benefit Guaranty Corporation, and, to the knowledge of the Company, no such audit, investigation or proceeding is threatened. With respect to each Company Employee Benefit Plan which provides medical benefits, short-term disability benefits or long-term disability benefits, all claims incurred by the Company under such Company Employee Benefit Plan are either insured pursuant to a contract of insurance whereby the insurance company bears any risk of loss with respect to such claims or covered under a contract with a health maintenance organization pursuant to which such health maintenance organization bears the liability for such claims. Neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated hereby will (either alone or in conjunction with any other event such as termination of employment) result in any payment or benefit that will or may be made by the Company or any of its subsidiaries or Affiliates that will be characterized as an “excess parachute payment,” within the meaning of Section 280G of the Code. Neither the Company nor any of its subsidiaries or ERISA Affiliates has any liability to provide any post-retirement or post-termination life, health, medical or other welfare benefits to any current or former employees or beneficiaries or dependents thereof, except for health continuation coverage as required by Section 4980B of the Code or Part 6 of Title I of ERISA and at no expense to the Company and its subsidiaries. The Company may amend or terminate any Company Employee Benefit Plan at any time without incurring liability thereunder other than in respect of accrued obligations and medical or welfare claims incurred prior to such amendment or termination.

(d) The Company Disclosure Schedule lists each Company Benefit Plan that is maintained primarily for the benefit of current or former non-U.S. employees of the Company or any of its subsidiaries (“Foreign Plans”). Except as set forth in the Company Disclosure Schedule, (i) Foreign Plans intended to qualify as Tax registered or Tax favored plans under a foreign jurisdiction are the subject of a favorable determination or similar approval, to the extent available, of the applicable foreign Governmental Entities, (ii) nothing has occurred

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since the date of such approval that would cause the loss of such approval or the imposition of any related liability, penalty or Tax under applicable foreign Law, and (iii) the fair market value of the assets of each funded Foreign Plan, the liability of each insurer for any Foreign Plan funded through insurance or the book reserve established for any Foreign Plan, together with any accrued contributions, is sufficient to procure or provide for the accrued benefit obligations, as of the date hereof, with respect to all current and former participants in such Foreign Plans according to reasonable actuarial assumptions and valuations.

4.11 Labor and Employment Matters. (a) Neither the Company nor any of its subsidiaries is a party to, or bound by, any collective bargaining agreements or understandings with any labor unions or labor organizations. There is no (i) unfair labor practice, labor dispute (other than routine individual grievances) or labor arbitration proceeding pending or, to the knowledge of the Company, threatened against the Company or any of its subsidiaries relating to their businesses, (ii) activity or proceeding by a labor union or representative thereof to the knowledge of the Company to organize any employees of the Company or any of its subsidiaries,