AGREEMENT AND PLAN OF MERGER

Exhibit 2.1

EXECUTION VERSION

AGREEMENT AND PLAN OF MERGER

THIS AGREEMENT AND PLAN OF MERGER (this “Agreement” ) is made and entered into as of February 26, 2007, by and among PATINA RESTAURANT GROUP, LLC, a Delaware limited liability company ( “Parent” ); SWRG HOLDINGS, INC., a Delaware corporation and a wholly-owned subsidiary of Parent ( “Merger Sub” ); and THE SMITH AND WOLLENSKY RESTAURANT GROUP, INC. , a Delaware corporation (the “Company”). Certain capitalized terms used in this Agreement are defined in Exhibit A .

RECITALS

A.              The Boards of Merger Sub and the Company have each determined that it is advisable and in the best interests of their respective stockholders that Merger Sub merge with and into the Company, with the Company surviving (the “ Merger ”).

B.              The Boards of Parent, Merger Sub and the Company have each duly approved this Agreement and the Merger, all in accordance with the Delaware General Corporation Law (the “ DGCL ”) and, in each case, upon the terms and conditions set forth in this Agreement.

AGREEMENT

The parties to this Agreement, intending to be legally bound, agree as follows:

1.1                Merger of Merger Sub into the Company. Upon the terms and subject to the conditions set forth in this Agreement, at the Effective Time, Merger Sub shall be merged with and into the Company, and the separate existence of Merger Sub shall cease. The Company will continue as the surviving corporation in the Merger and a wholly-owned subsidiary of Parent (the “Surviving Corporation” ).

1.2.                Effects of the Merger . The Merger shall have the effects set forth in this Agreement and in the applicable provisions of the DGCL.

1.3                Closing; Effective Time . The consummation of the transactions contemplated by this Agreement (the “Closing” ) shall take place at the offices of Willkie Farr & Gallagher LLP, 787 Seventh Avenue, New York, New York 10019 , at 9:00 a.m. on a date to be designated by the Company (the “Closing Date” ), which shall be no later than the second business day after the satisfaction or waiver of the last to be satisfied or waived of the conditions set forth in Sections 6 and 7 (other than those conditions that by their nature are to be satisfied at the Closing, but subject to the satisfaction or waiver of such conditions). Subject to the provisions of this Agreement, a certificate of merger satisfying the applicable requirements of the DGCL shall be duly executed by the Company and, concurrently with or as soon as practicable following the Closing, the parties hereto shall deliver to and file with the Secretary of State of the State of Delaware such certificate of merger in accordance with the DGCL. The Merger shall

become effective upon the date and time of the filing of such certificate of merger with the Secretary of State of the State of Delaware, or at such later time as may be mutually agreed in writing by the Company and Parent and specified in the certificate of merger (the “Effective Time” ).

1.4.                Certificate of Incorporation and Bylaws; Directors and Officers . Unless otherwise determined by Parent prior to the Effective Time:

(a)                the Certificate of Incorporation of the Surviving Corporation shall be amended and restated at the Effective Time to conform to the Certificate of Incorporation of Merger Sub as in effect immediately prior to the Effective Time, except that the name of the Surviving Corporation shall be “ The Smith & Wollensky Restaurant Group, Inc. ” ;

(b)                the Bylaws of the Surviving Corporation shall be amended and restated as of the Effective Time to conform to the Bylaws of Merger Sub as in effect immediately prior to the Effective Time;

(c)                the directors of the Surviving Corporation immediately after the Effective Time shall be the individuals who are directors of Merger Sub immediately prior to the Effective Time; and

(d)                the officers of the Surviving Corporation immediately after the Effective Time shall be the individuals who are officers of Merger Sub immediately prior to the Effective Time.

1.5.                Conversion of Securities . At the Effective Time, by virtue of the Merger and without any further action on the part of Parent, Merger Sub, the Company or any stockholder of the Company:

(a)                each share of common stock, par value $0.01 per share, of the Company (the “ Company Common Stock ” and such shares, “ Shares ”) issued and outstanding immediately prior to the Effective Time (other than any Shares to be canceled pursuant to Section 1.5(b) and any Dissenting Shares) shall be canceled and shall be converted automatically into the right to receive from the Surviving Corporation $9.25 in cash (the “ Per Share Merger Consideration ”). All Shares that have been converted into the right to receive the Per Share Merger Consideration as provided in this Section 1.5 shall be automatically canceled and retired and shall cease to exist, and the holders of certificates which immediately prior to the Effective Time represented such Shares shall cease to have any rights with respect to such Shares other than the right to receive the Per Share Merger Consideration;

(b)                each Share held in the treasury of the Company immediately prior to the Effective Time shall be canceled and retired and shall cease to exist, and no consideration shall be delivered in exchange therefor; and

(c)                each share of common stock, $0.01 par value per share, of Merger Sub then outstanding shall be converted into one share of common stock of the Surviving Corporation, and shall thereupon constitute all of the issued and outstanding shares of the Surviving Corporation.

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1.6.                Company Stock Options . At the Effective Time, each Company Option that is then outstanding, whether under the Company’s 1996 Stock Option Plan, the New York Restaurant Group, Inc. 1997 Stock Option Plan or The Smith & Wollensky Restaurant Group, Inc. 2001 Stock Incentive Plan, as amended (collectively, the “Option Plans” ) or otherwise, shall be treated as follows:

As soon as practicable following the date of this Agreement, the Board of the Company (or, if appropriate, any committee thereof administering the Option Plans) shall adopt such resolutions or take such other actions as may be required to adjust the terms of all outstanding Company Options, whether vested or unvested, as necessary to provide that Company Options outstanding immediately prior to the Effective Time, whether or not then vested or exercisable, shall be canceled and the holder thereof shall then become entitled to receive, in full satisfaction of the rights of such holder with respect thereto, an amount of cash equal to (i) the product of (a) the aggregate number of shares of Company Common Stock subject to any unexercised Company Option (whether vested or unvested) which is outstanding immediately prior to the Effective Time multiplied by (b) the amount, if any, by which the Per Share Merger Consideration exceeds the exercise price per share of Company Common Stock which is subject to such Company Option (the “Option Consideration” ). The right of any holder of Company Options to receive the Option Consideration shall be subject to and reduced by the amount of any withholding that is required under applicable Law. At the Effective Time, each Company Option outstanding as of the Effective Time with an exercise price per share that is equal to or greater than the Per Share Merger Consideration shall be terminated, without any consideration therefor. The Company agrees that the Board of the Company (or, if appropriate, any committee administering the Option Plans) shall adopt such resolutions or take such other actions (including obtaining any required consents) as may be required to effect the transactions described in this Section 1.6 as of the Effective Time.

1.7.                Closing of the Company’s Transfer Books . At the Effective Time: (a) all shares of Company Common Stock outstanding immediately prior to the Effective Time shall automatically be canceled and retired and shall cease to exist, and all holders of certificates representing shares of Company Common Stock that were outstanding immediately prior to the Effective Time shall cease to have any rights as stockholders of the Company, and each certificate representing any such Company Common Stock (a “Company Stock Certificate” ) shall thereafter represent the right to receive the consideration referred to in Section 1.5(a) (or, if applicable, Section 1.9) until surrendered in accordance with Section 1.8; and (b) the stock transfer books of the Company shall be closed with respect to all shares of Company Common Stock outstanding immediately prior to the Effective Time. No further transfer of any such shares of Company Common Stock shall be made on such stock transfer books after the Effective Time. If, after the Effective Time, a Company Stock Certificate is presented to the Payment Agent or to the Surviving Corporation or Parent, such Company Stock Certificate shall be canceled and shall be converted as provided in Section 1.8.

(a)                Prior to the Closing Date, the Company shall select a reputable bank or trust company reasonably acceptable to Parent to act as payment agent in the Merger (the “Payment Agent” ). On or prior to the Closing Date, Parent shall deposit with the Payment

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Agent cash in the amount of the aggregate amount payable to all holders of Company Common Stock and Company Options hereunder. Such amount shall be invested by the Payment Agent as directed by Parent; provided that (i) any such investment shall be in obligations of or guaranteed by the United States of America and backed by the full faith and credit of the United States of America or in commercial paper obligations rated A-1 or P-1 or better by Moody’s Investors Services, Inc. or Standard & Poor’s Corporation, respectively, and (ii) no gain or loss on any such investment shall affect the Per Share Merger Consideration, Option Consideration or other amounts payable to holders of Company Common Stock or Company Options hereunder and following any losses Parent shall promptly provide additional funds to the Payment Agent for the benefit of the stockholders of the Company and holders of such Company Options in the amount of any such losses. Any interest or income produced by such investments will be payable to the Surviving Corporation or Parent, as Parent directs. As soon as reasonably practicable but in no event later than five (5) business days after the Effective Time, the Payment Agent shall mail to the record holders of Company Common Stock and Company Options: (i) a letter of transmittal in customary form accompanied by appropriate tax forms, and (ii) instructions for use in effecting the surrender of Company Stock Certificates and agreements evidencing Company Options ( “Company Option Agreements” ) in exchange for the cash amounts payable in accordance with Section 1.5(a) or Section 1.6, as applicable. Upon surrender of a Company Stock Certificate or Company Option Agreement to the Payment Agent for payment, together with a duly executed letter of transmittal, the holder of such Company Stock Certificate or Company Option Agreement shall be entitled to receive in exchange therefor, the consideration set forth in Section 1.5(a) or Section 1.6, as applicable with respect to the Company Common Stock evidenced by such Company Stock Certificate or the Company Option evidenced by such Company Option Agreement, as applicable. If any Company Stock Certificate or Company Option Agreement shall have been lost, stolen or destroyed, Payment Agent or Parent may, as a condition to the payment of the Per Share Merger Consideration with respect thereto, require the owner of such Company Stock Certificate or Company Option to provide an appropriate affidavit, surety bond or other documentation reasonably satisfactory to Parent.

(b)                Any portion of the cash amounts that are held by the Payment Agent pursuant to Section 1.8(a) and remain undistributed to holders of Company Stock Certificates or Company Options as of the first anniversary of the date on which the Merger becomes effective shall be delivered to Parent upon demand, and any holders of Company Stock Certificates or Company Options who have not theretofore surrendered their Company Stock Certificates or Company Option Agreements in accordance with this Section 1.8 shall thereafter look only to Parent or the Surviving Corporation for satisfaction of their claims for the cash amounts payable in accordance with Section 1.5(a) or Section 1.6, as applicable, without interest.

(c)                Neither Parent nor the Surviving Corporation shall be liable to any holder or former holder of Company Common Stock or Company Option with respect to any cash amounts properly delivered to any public official pursuant to any applicable abandoned property law or escheat law.

(d)                Payment Agent or Parent will be entitled to deduct and withhold from the consideration otherwise payable under this Agreement to any holder of Company Common Stock and any Company Options any amounts Parent is required to deduct and withhold under the Code or any other applicable Law. If any holder of Company Common

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Stock or Company Options believes that the withholding obligation may be lessened or avoided, such holder shall provide the Payment Agent or Parent, as applicable, with such information as Payment Agent or Parent, as applicable, reasonably believes necessary to substantiate such reduced or avoided withholding obligation. Any withheld amounts will be treated as having been paid to the applicable holder of Company Common Stock or Company Options, as applicable.

(a)                Notwithstanding any other provision of this Agreement to the contrary, shares of Company Common Stock that have not been voted in favor of (or consented to) adoption of this Agreement, and with respect to which a demand for payment and appraisal has been properly made and perfected in accordance with Section 262 of the DGCL (the “Dissenting Shares” ), shall not be converted into or represent the right to receive the Per Share Merger Consideration in accordance with Section 1.5(a), but shall be converted into the right to receive such consideration as may be determined to be due with respect to such Dissenting Shares pursuant to the DGCL; provided that if a holder of Dissenting Shares (a “Dissenting Stockholder” ) withdraws such holder’s demand for such payment and appraisal or becomes ineligible for such payment and appraisal then, as of the later of the Effective Time or the date of which such Dissenting Stockholder withdraws such demand or otherwise becomes ineligible for such payment and appraisal, such holder’s Dissenting Shares shall cease to be Dissenting Shares and shall automatically be converted into the right to receive the Per Share Merger Consideration in accordance with Section 1.5(a).

(b)                The Company shall give Parent (i) prompt notice of any written demands for dissenters’ rights of any Company Common Stock, withdrawals of such demands, and any other instruments served pursuant to the DGCL and received by the Company which relate to any such demand for dissenters’ rights and (ii) the opportunity reasonably to direct all negotiations and proceedings (subject to the Company’s right to object to any actions or positions taken by Parent that it deems, in its sole discretion, unreasonable) with respect to demands for dissenters’ rights under the DGCL. The Company shall not, except with the prior written consent of Parent (which shall not be unreasonably withheld or delayed), make any payment with respect to any demands for dissenters’ rights or offer to settle or settle any such demands.

1.10.                Further Action. If, at any time after the Effective Time, any further action is necessary or desirable to carry out the purposes of this Agreement or to vest the Surviving Corporation with full right, title and possession of and to all rights and property of Merger Sub and the Company, the directors and officers (including Board members, as applicable) of the Surviving Corporation and Parent shall take such action, so long as such action is not inconsistent with this Agreement.

1.11                Creation of Holding Company. At the request of Merger Sub made not less than five days prior to the Effective Time, the Company shall immediately prior to the Effective Time cause some or all of the assets to be acquired pursuant to the Stillman Transaction to be transferred to a newly formed wholly-owned subsidiary of the Company; provided , however , that such transfer will not have to be effectuated if in the reasonable opinion

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of the Company this could result in additional Taxes being due and payable by the Company; and provided further , that such transfer shall not cause any of the representations and warranties of Parent or Merger Sub in Article 3 to be untrue, incomplete or inaccurate in any respect. Merger Sub will prepare at its expense all documents necessary to effectuate the provisions of this Section 1.11 and will pay any taxes, recording fees or the costs incurred in connection therewith.

The Company represents and warrants to Parent and Merger Sub as follows, except as set forth in the Company SEC Documents filed or furnished prior to the date hereof (other than disclosures referred to in sections entitled “Risk Factors” in such Company SEC Documents or any forward-looking statements contained in such Company SEC Documents):

(a)                The Company and each Company Subsidiary is a corporation or other form of entity duly organized, validly existing and in good standing under the Laws of the jurisdiction of its organization and has all necessary power and authority to own, lease and operate its properties and to conduct its business in the manner in which its business is currently being conducted.

(b)                The Company and each Company Subsidiary is qualified to do business as a foreign corporation, and is in good standing, under the Laws of all states where the nature of its business requires such qualification.

(c)                Except as set forth in Part 2.1(c) of the Disclosure Schedule, other than with respect to the Company Subsidiaries, the Company does not own, directly or indirectly, any capital stock of or other equity interest in any corporation, limited liability company, partnership, joint venture or other business association or entity, other than marketable securities.

(d)                Each Company Subsidiary is, directly or indirectly, a wholly owned subsidiary of the Company, and there are no issued and outstanding options, warrants, calls, subscriptions or other commitments or rights of any nature (including conversion rights, exchange rights, stock appreciation rights, or subscription rights convertible into or exercisable or exchangeable for capital stock of or other equity interests in any Company Subsidiary. “Company Subsidiaries” shall mean the entities set forth on Part 2.1(d) of the Disclosure Schedule. The authorized capital stock of or other equity interests in each Company Subsidiary and the issued and outstanding shares of such capital stock or other equity interest as of the date of this Agreement are reflected in Part 2.1(d) of the Disclosure Schedule. All such outstanding shares (i) are duly authorized, validly issued, fully paid and non-assessable, (ii) are free of any Liens and (iii) were not issued in violation of any preemptive rights or rights of first refusal created by statute, the certificate of incorporation or bylaws or other equivalent organizational document (collectively, “Organizational Documents” ) of any Company Subsidiary or any agreement to which the Company or any Company Subsidiary is a party or by which it is bound.

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2.2.                Certificate of Incorporation and Bylaws. The Company has delivered or otherwise made available to Parent or its counsel true, correct and complete copies of the Organizational Documents of the Company and of each Company Subsidiary, as amended and currently in force. All records of ownership of the capital stock of or other equity interest in the Company and each Company Subsidiary, and all minute books and similar records of the Company and each Company Subsidiary from and after such entity's date of formation have been furnished for inspection by Parent and its Representatives. Said records accurately reflect all transactions in the capital stock of or equity interest in the Company and the Company Subsidiaries from and after such date, and the current ownership thereof. The minute books and similar records contain true, correct and complete copies of all resolutions adopted by the stockholders and the Boards of the Company and the Company Subsidiaries and any other action formally taken by them from and after such date. Neither the Company nor any Company Subsidiary is in violation of any of the provisions of its Organizational Documents.

2.3.                Capitalization, Etc. The authorized capital stock of the Company consists of 40,000,000 shares of Company Common Stock, of which 8,598,043 shares were issued and outstanding as of February 23, 2007. All outstanding shares of Company Common Stock (i) are duly authorized, validly issued, fully paid and non-assessable, (ii) are free of any Liens created by the Company, and (iii) were not issued in violation of any preemptive rights or rights of first refusal created by statute, the certificate of incorporation or bylaws of the Company or any agreement to which the Company is a party or by which it is bound. As of the date of this Agreement, there were 808,895 shares of Company Common Stock reserved for issuance under the Option Plans, of which 618,183 shares of Company Common Stock were subject to outstanding options and 190,712 shares of Company Common Stock were reserved for future option grants. The Company has delivered to Parent or its Representatives (or made available in a data room) true and complete copies of the Option Plans and each form of agreement evidencing each award thereunder (and each such agreement accurately reflects the actual date of grant of such award determined in accordance with GAAP). Except for the rights created pursuant to this Agreement and the options and other rights disclosed in the preceding sentences, there are no options, warrants, calls, rights, commitments or agreements that are outstanding to which the Company is a party or by which it is bound, obligating the Company to issue, deliver, sell, repurchase or redeem, or cause to be issued, delivered, sold, repurchased or redeemed, any shares of Company Common Stock or other capital stock of or equity interests in the Company or the Company Subsidiaries or obligating the Company to grant, extend, accelerate the vesting of, change the price of, or otherwise amend or enter into any option, warrant, call, right, commitment or agreement regarding shares of Company Common Stock or other capital stock of or equity interests in the Company or the Company Subsidiaries. All shares of Company Common Stock issuable upon exercise of the options described in this Section 2.3 will be, when issued pursuant to the terms of such options, duly authorized, validly issued, fully paid and nonassessable. There are no other contracts, commitments or agreements relating to the voting, purchase or sale of Company Common Stock between or among the Company and any of its stockholders; and (ii) to the Company’s Knowledge, between or among any Company Common Stockholders. 

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(a)                Except as set forth in Part 2.4(a) of the Disclosure Schedule, the Company has filed or furnished all forms, documents and reports (including exhibits) required to be filed or furnished prior to the date of this Agreement by it with the Securities and Exchange Commission (the “SEC” ) since January 1, 2004 (the “ Company SEC Documents ”). As of their respective dates, or, if amended, as the date of the last such amendment, the Company SEC Documents complied when filed in all material respects with the requirements of the Securities Act and the Exchange Act, as the case may be, and the applicable rules and regulations promulgated thereunder, and none of the Company SEC Documents contained any untrue statement of a material fact or omitted to state or incorporate by reference any material fact required to be stated or incorporated by reference therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. No Subsidiary of the Company is required to file any form or report with the SEC.

(b)                Except as set forth in Part 2.4(b) of the Disclosure Schedule, the Company has been, since January 1, 2004 and is in compliance in all material respects with (i) the applicable provisions of the Sarbanes-Oxley Act and the related rules and regulations promulgated thereunder, and (ii) the applicable listing and corporate governance rules and regulations of the NASDAQ Stock Market.

(c)                The Company has delivered or otherwise made available to Parent or its Representatives (i) the Company’s audited consolidated balance sheets and statements of operations and cash flows for each of the three years ended January 2, 2006, January 3, 2005 and January 5, 2004 and (ii) the unaudited consolidated balance sheet and statements of operations and cash flows of the Company for the 9-month period ended October 2, 2006 (the “Unaudited Balance Sheet” ) (all of the foregoing financial statements of the Company and any notes thereto are hereinafter collectively referred to as the “Company Financial   Statements” ). The Company Financial Statements were prepared in accordance with GAAP applied on a consistent basis through the periods covered and fairly present in all material respects the financial condition of the Company (on a consolidated basis) at the dates therein indicated and the results of operations of the Company (on a consolidated basis) for the periods therein specified in accordance with GAAP, except (i) as may be indicated in the footnotes to such financial statements and (ii) that the unaudited financial statements do not contain footnotes and are subject to normal year end adjustments.

2.5.                Absence of Certain Changes. Except as set forth in Part 2.5 of the Disclosure Schedule, between October 2, 2006 (the “Company Balance Sheet Date” ) and the date of this Agreement, the Company and the Company Subsidiaries have conducted their business in the ordinary and usual course of business and consistent with past practice, and there has not occurred (i) any acquisition, sale or transfer of any material asset of the Company or the Company Subsidiaries other than in the ordinary course of business; (ii) any amendment to the Organizational Documents of the Company or the Company Subsidiaries; (iii) any material increase in, or material modification of, the compensation or benefits payable by the Company or the Company Subsidiaries to any of their respective directors or officers (or Board members, as applicable), except in the ordinary course of business consistent with past practice; (iv) any declaration, setting aside or payment of a dividend or other distribution with respect to shares of Company Common Stock; or (v) any incurrence of indebtedness for borrowed money. Between

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the Company Balance Sheet Date and the date of this Agreement, there has not been any event or occurrence that has had, individually or in the aggregate, a Material Adverse Effect.

2.6.                Internal Controls and Procedures. The Company has established and maintains disclosure controls and procedures and internal control over financial reporting (as such terms are defined in paragraphs (e) and (f), respectively, of Rule 13a-15 under the Exchange Act) as required by Rule 13a-15 under the Exchange Act. The Company’s disclosure controls and procedures are reasonably designed to ensure that all material information required to be disclosed by the Company in the reports that it files or furnishes under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC, and that all such material information is accumulated and communicated to the Company’s management as appropriate to allow timely decisions regarding required disclosure and to make the certifications required pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act” ). The Company has disclosed, based on its most recent evaluation prior to the date of this Agreement, to the Company’s auditors and the audit committee of the Board and to Parent (i) any deficiencies and material weaknesses known to the Company in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect in any material respect the Company’s ability to record, process, summarize and report financial information and (ii) any fraud known to the Company, whether or not material, that involves executive officers or employees who have a significant role in the Company’s internal controls over financial reporting. Except as set forth in the Company’s SEC Documents, and as of the date of this Agreement, the Company has not identified any material weaknesses in the design or operation of its internal control over financial reporting. There are no outstanding loans made by the Company or any Company Subsidiary to any executive officer (as defined in Rule 3b-7 under the Exchange Act) or director of the Company.

2.7.                No Undisclosed Liabilities . Except (i) as reflected or reserved against in the Unaudited Balance Sheet, (ii) for liabilities incurred pursuant to or in connection with the execution, delivery or performance of this Agreement, (iii) for liabilities and obligations incurred in the ordinary course of business since the date of the Unaudited Balance Sheet, and (iv) for liabilities or obligations which have been discharged or paid in full in the ordinary course of business, as of the date of this Agreement, neither the Company nor any Company Subsidiary has any material liabilities or obligations of any nature, whether or not accrued, contingent or otherwise, that would be required by GAAP to be reflected on a consolidated balance sheet of the Company and the Company Subsidiaries (or in the notes thereto).

2.8.                Title to Assets . The Company and each Company Subsidiary has good and valid title to all of their material owned assets, including all assets (other than capitalized or operating leases) reflected in the Company Balance Sheet (except for assets sold or otherwise disposed of since the date of the Company Balance Sheet in the ordinary course of business). All of said assets are owned by the Company or the Company Subsidiaries, as applicable, free and clear of all Liens, except for the following (collectively, “Permitted Encumbrances” ): (i) Liens for current taxes not yet due and payable or that are being contested in good faith by appropriate proceedings; (ii) mechanic’s, materialman’s or similar statutory Liens for amounts not yet due and payable or that are being contested in good faith by appropriate proceedings; (iii) encumbrances that do not materially impair the ownership or use of the assets to which they

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relate; (iv) Liens securing debt and capital leases that are reflected on the Company Balance Sheet; (v) statutory or common law Liens to secure obligations to landlords, lessors or renters under leases or rental agreements; (vi) deposits or pledges made in connection with, or to secure payment of, workers’ compensation, unemployment insurance or similar programs mandated by Law; and (vii) licenses to Trademarks.

(a)                All material items of equipment and other tangible assets owned by or leased to the Company and the Company Subsidiaries are adequate in all material respects for the uses to which they are being put, and the Company or any Company Subsidiary owns or leases equipment and other tangible assets sufficient for the operation of the Company’s business.

(b)                The Company or the Company Subsidiaries own fee title to four (4) parcels of real property more fully described in Part 2.9(b) of the Disclosure Schedule (the “Real Property” ), free and clear of all Liens except such Liens as are set forth in Part 2.9(b) of the Disclosure Schedule. The Company has delivered or otherwise made available to Parent or its counsel true and complete copies of the deeds, as well as any title insurance policies, surveys and environmental reports in respect to the Real Property which the Company or any Company Subsidiary has in its possession.

(c)                The Company and the Company Subsidiaries do not own any real property other than the Real Property. The Company and the Company Subsidiaries do not own any other interest in real property, except for the leaseholds created under the real property leases identified in Part 2.9(c) of the Disclosure Schedule (each, a “Leased Property” ). With respect to each Leased Property, except as set forth in Part 2.9(c) of the Disclosure Schedule, (i) the Company or the Company Subsidiary, as applicable, has good and valid title to the leasehold estate relating thereto free and clear of all Liens except Permitted Encumbrances, (ii) each lease relating to such Leased Property is legal, valid, binding, in full force and effect and enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium and similar Laws affecting creditors’ rights and remedies generally, and subject, as to enforceability, to general principles of equity, including principles of commercial reasonableness, good faith and fair dealing (regardless of whether enforcement is sought in a proceeding at law or in equity), (iii) neither the Company nor any Company Subsidiary, as applicable, is in breach or violation of such lease or has received any written notice of any breach or violation of such lease, which breach or violation is alleged to remain uncured as of the date of execution of this Agreement, and, to the Knowledge of the Company, no other party to each lease relating to such Leased Property is, in breach or violation of (other than in immaterial respects), or in default under, such lease, which breach or violation or default is alleged to remain uncured as of the date of execution of this Agreement, (iv) there are no material disputes or forbearance programs in effect as to the lease relating to such Leased Property and (v) there is no Lien, lease, assignment, sublease, or, to the Knowledge of the Company, easement, covenant, right of way or other restriction or condition applicable to such Leased Property or to the Company’s or the Company Subsidiary’s leasehold estate therein that could materially impair the current uses or occupancy by the Company or the Company Subsidiary of such Leased Property

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(including, without limitation, anything which could adversely affect in any material way the accessibility to, egress from and/or the visibility of, the Leased Property).

(d)                None of the following Persons is the lessor (or otherwise holds a direct or indirect interest) in respect to any Leased Property (including a direct or indirect interest in the real property in or upon which the Leased Property is located): (i) any current officer or Board member of the Company or any Company Subsidiary, (ii) any past officer or Board member of the Company or any Company Subsidiary, or (iii) any Affiliate of any of the foregoing.

(e)                There are no leasing, broker’s or finder’s commissions or compensation of any kind unpaid with respect to the Real Property or any of the Leased Properties, or any unpaid installments thereof on account of any leasing commissions heretofore earned, and no leasing, broker’s or finder’s commissions will be payable in connection with any assignment or deemed assignment of any lease with respect to the Leased Properties.

(f)                The Company and the Company Subsidiaries have not received any notice of any extraordinary assessments to be imposed against the Real Property or payable by the Company or any Company Subsidiary with respect to any of the Leased Properties.

(g)                Except as set forth in Part 2.9(g) of the Disclosure Schedule, neither the Company nor any Company Subsidiary has given or received any written notice of any violation of any easement agreement or other similar agreements concerning the use, operation or maintenance of the Real Property or the Leased Properties.

(h)                Except as set forth in Part 2.9(h) of the Disclosure Schedule, neither the Real Property nor the Leased Properties, nor any of them, have suffered any material damage by fire or other casualty which has not been completely restored and repaired. Except as set forth in Part 2.9(h) of the Disclosure Schedule, no proceeding for a taking by condemnation or otherwise of all or any part of the Real Property or the Leased Properties has occurred or is pending or, to the Company’s Knowledge, is threatened.

(i)                Except as permitted under applicable Environmental Laws, to the Company’s Knowledge, neither the Real Property nor the Leased Properties contain any Hazardous Materials defined in or controlled pursuant to Environmental Laws.

(j)                The Company has not granted any options or rights of first refusal or any other rights to acquire any interest in the Company (other than interests in Company Common Stock pursuant to Section 2.3) or any Real Property or Leased Property.

(k)                The transactions contemplated by this Agreement will not result in any termination or result in a right of termination under any lease, result in any rent increase under any lease or require the consent of any party thereto or any mortgagee, except as set forth in Part 2.9(k) of the Disclosure Schedule.

(l)                Since January 1, 2003, the Company has received no written notice and has no Knowledge of any current default by a landlord under any mortgage or other lien that is superior with respect to the Leased Properties that has not been cured.

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(m)                The Company or a Company Subsidiary has a good, marketable and insurable leasehold estate in each Leased Property.

(n)                The list of Leased Properties in Part 2.9(c) of the Disclosure Schedule includes and specifically indicates any real property that is leased to the Company or a Company Subsidiary pursuant to a lease which has been assigned or sublet by such entity or another Person but with respect to which the Company or any Company Subsidiary retains any liability.

(o)                Except as set forth in Part 2.9(o) of the Disclosure Schedule, the transactions contemplated by this Agreement will not result in the imposition of any transfer taxes greater than $1,000 with respect to any of the Leased Properties.

(p)                To the Knowledge of the Company, the improvements and operations of the business of the Company or the Company Subsidiaries do not encroach on the property of another Person. All such improvements are in good working order and repair, normal wear and tear excepted.

(q)                None of the Real Property or any Leased Property relies on any other property for parking or other services, except as disclosed in Part 2.9(q) of the Disclosure Schedule.

(r)                To the Knowledge of the Company and except as set forth in Part 2.9(r) of the Disclosure Schedule:

(i)                No material defect or condition of the Real Property or the Leased Properties or the soil or geology thereof exists which would impair the current or planned use thereof.

(ii)                The Company and each Company Subsidiary has legal and practical access to all roads and utilities needed for the conduct of its business or the business’s Real Property and Leased Properties; neither the Company nor any Company Subsidiary has received written notice of any adverse claims to such access that would materially adversely affect the use currently being made of such access by the Company and the Company Subsidiaries.

(iii)                No material violation of any recorded covenant, condition, restriction or easement affecting the Real Property or any of the Leased Properties or the use or occupancy of any of such properties exist, and no notice of any such violation has been received from any Person entitled to enforce the same.

(iv)                Public and private utilities servicing the Real Property and the Leased Properties have adequate capacity to meet the utility requirements for the current use of such properties.

(v)                Neither the Company nor any Company Subsidiary has any oral or written agreement with any real estate broker, agent or finder with respect to the Real Property or the Leased Properties.

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(s)                Part 2.9(s) of the Disclosure Schedule sets forth a list of all Real Property and Leased Properties that are encumbered by Liens securing debt (reflected on the Unaudited Balance Street as secured debt), identifying each property so encumbered, the nature and amount of the Lien and the name of the creditor.

(t)                To the Company’s Knowledge, none of the Real Property or Leased Property or, in either case, the buildings or improvements thereon, is currently a “non-conforming use” or “permitted non-conforming use” under applicable zoning Laws.

(u)                There are no Contracts affecting any Real Property or Leased Property which are not terminable within one month of receipt of notice by the other Person or Persons party thereto(or require a penalty or premium in the event of such termination).

(v)                True and correct copies of all leases with respect to each Leased Property (including all amendments thereto) have been delivered by the Company to Parent.

(a)                The registered Trademarks (including applications for registration) owned by or licensed to the Company and currently used (or used at any time within the past twelve (12) months) by the Company and the Company Subsidiaries are as listed in Part 2.10(a) of the Disclosure Schedule. The unregistered Trademarks owned by or licensed to the Company and currently used (or used at any time within the past twelve (12) months) by the Company and the Company Subsidiaries and material to the businesses of the Company and the Company Subsidiaries are as listed in Part 2.10(a) of the Disclosure Schedule. The Company and the Company Subsidiaries own or have a valid right to use all such Trademarks used in the operation of their businesses as now being conducted (all such Trademarks owned by the Company and the Company Subsidiaries being the “ Owned Trademarks ” and all such Trademarks licensed to the Company and the Company Subsidiaries being the “ Licensed Trademarks” ), free and clear of all Liens. The Owned Trademarks are not subject to any license, royalty or other agreements, and neither the Company nor any Company Subsidiary has granted any license (whether exclusive or non-exclusive) or agreed to pay or receive any royalty in respect to any Owned Trademarks or Licensed Trademarks (other than the Amended and Restated Sale and License Agreement, dated January 1, 2006, by and between St. James Associates, L.P. and The Smith & Wollensky Restaurant Group, Inc.). Except as described in Part 2.10(a) of the Disclosure Schedule, neither the Company nor any Company Subsidiary has licensed others to use the Owned Trademarks or the Licensed Trademarks in any country outside the United States and, to the Knowledge of the Company, the Owned Trademarks and Licensed Trademarks are not used by third-parties in connection with any restaurant business in any country outside the United States.

(b)                All registered Owned Trademarks and applications therefor are owned by the Company and the Company Subsidiaries as indicated therein and have been duly registered or filed with or issued by the U.S. Patent and Trademark Office or other applicable foreign patent and trademark offices. All registered Owned Trademarks and applications therefor are subsisting, and to the Company’s Knowledge, all Owned Trademarks are valid and enforceable.

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(c)                Part 2.10(c) of the Disclosure Schedule sets forth a true, correct and complete list of all registered Intellectual Property and applications therefor material to the regular operations by the Company and the Company Subsidiaries of their businesses. The Company owns or has a valid right to use, free and clear of all liens, all Intellectual Property held for use in connection with and material to the businesses of the Company and the Company Subsidiaries as currently conducted (the “ Company Intellectual Property ”). All such Intellectual Property rights are subsisting, and to the Company’s Knowledge, and are valid and enforceable.

(d)                To the Company’s Knowledge, no Company Intellectual Property or Owned Trademarks are infringing upon, any Intellectual Property or Trademark rights of others. No Person has asserted in writing any claim regarding the use of, or challenging or questioning the Company’s or any Company Subsidiary’s right or title in, any of the Company Intellectual Property or Owned Trademarks. No Person has given the Company written notice that the Company or any Company Subsidiary is infringing upon or misappropriating any Intellectual Property or Trademark rights of others.

(a)                Except for this Agreement, the Company Plans or documents filed as an exhibit (or incorporated by reference) to the Company’s Annual Report on Form 10-K with the SEC , or as set forth in Part 2.11(a) of the Disclosure Schedule, as of the date of this Agreement, neither the Company nor any Company Subsidiary is a party to or bound by any Contract (i) constituting a “material contract” (as such term is defined in Item 601(b)(10) of Regulation S-K of the SEC); (ii) under which expected receipts or expenditures exceeds $250,000 in the current or any future calendar year; (iii) evidencing indebtedness for borrowed or loaned money of $250,000 or more, including guarantees of such indebtedness by the Company or any Company Subsidiary, other than those guarantees by the Company of real property leases of certain Company Subsidiaries as identified in Part 2.11(a) of the Disclosure Schedule; (iv) creating or relating to any partnership or joint venture or any sharing of profits or losses by the Company or any Company Subsidiary with any third party; (v) containing covenants binding upon the Company or any of its Affiliates that materially restricts the ability of the Company or any of its Affiliates (or which, following the consummation of the Merger could materially restrict the ability of the Surviving Corporation or its Affiliates) to compete in any business that is material to the Company and its Affiliates, taken as a whole, as of the date of this Agreement, or that restricts the ability of the Company or any of its Affiliates (or which, following the consummation of the Merger, would restrict the ability of the Surviving Corporation or its Affiliates) to compete with any Person or in any geographic area; (vi) relating to the lease or license of any material asset, including material Intellectual Property or Trademarks; (vii) constituting a franchise agreement entered into between a franchisee and the Company and one or more of its Subsidiaries; or (viii) under which expected receipts or expenditures exceed $200,000 and that has a term of more than one year which cannot be terminated on written notice of sixty (60) days or less without payment of penalty or premium (all contracts of the type described in this Section 2.11(a), the “Company Material Contracts” ).

(b)                Neither the Company nor any Company Subsidiary is in material breach of or default under the terms of any Company Material Contract. To the Knowledge of

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the Company, no other party to any Company Material Contract is in breach of or default under the terms of any Company Material Contract where such breach or default would have, individually or in the aggregate, a Material Adverse Effect. Each Company Material Contract is a valid and binding obligation of the Company or the Company Subsidiary which is party thereto and, to the Knowledge of the Company, of each other party thereto, and is in full force and effect, except that (i) such enforcement may be subject to applicable bankruptcy, insolvency, reorganization, moratorium or other similar Laws now or hereafter in effect, relating to creditors’ rights generally and (ii) equitable remedies of specific performance and injunctive and other forms of equitable relief may be subject to equitable defenses and to the discretion of the court before which any proceeding therefor may be brought.

2.12.                Compliance with Laws. The Company and the Company Subsidiaries are, and since January 1, 2003, have been, in compliance with and are not in default under or in violation of, and have not received any written or oral notices of any pending violation with respect to, any and all Laws applicable to the Company or any Company Subsidiary.

2.13.                Governmental Authorizations; Permits . The Company and the Company Subsidiaries have obtained each Permit of a Governmental Authority (including the Liquor Licenses) which is required for the regular operations by the Company and the Company Subsidiaries of their businesses, (including the Real Property and the Leased Properties), and all of such Permits are in full force and effect, except for failure to obtain such approvals or authorizations or failure of such approvals and authorization to be in full force and effect that would not materially affect the regular operations of the Company or the Company Subsidiaries. With respect to each Permit (including each of the Liquor Licenses), neither the Company nor any Company Subsidiary has received written notice that such Permit will not be renewed and the transaction contemplated by this Agreement will not adversely affect the validity of such Permit or cause a cancellation of or otherwise adversely affect such Permit, subject to compliance by Parent and the Company with applicable Law (including post-Closing notice requirements) after the Closing.

2.14.                Tax Matters. Except as otherwise set forth in Part 2.14 of the Disclosure Schedule:

(a)                Each of the income, franchise, gross receipt, sales, real property and employment Tax Returns required to be filed by or on behalf of the Company or any Company Subsidiary on or before the date hereof (i) has been filed on or before the applicable due date (including any extensions of such due date) and (ii) has been prepared in material compliance with all applicable Laws and governmental regulations. The Company has delivered to Parent or its Representatives a copy of all material income Tax, Sales Tax, gross receipts Tax and property Tax Returns filed by it or by any Company Subsidiary since July 10, 2004.

(b)                The Company and the Company Subsidiaries have timely paid all Taxes shown as due on their Tax Returns (taking Tax Return extensions into account) unless such Taxes are being contested in good faith with the relevant Governmental Authority (with all such contests described in Part 2.14(b) of the Disclosure Schedule) and have accrued in accordance with GAAP on the Unaudited Balance Sheet all Taxes greater than $10,000 for or

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with respect to all periods ending on or before October 2, 2006 to the extent such Taxes had not become due on or before such date.

(c)                No Tax Return of the Company or of any Company Subsidiary has been audited for any period ending on or after July 10, 2003 by the relevant Governmental Authority and no such audit is in progress or, to the Knowledge of the Company or any Company Subsidiary, threatened in writing with respect to any Taxes concerning a Tax liability greater than $10,000. Neither the Company nor any Company Subsidiary has given or has been requested to give a waiver or extension of any statute of limitations relating to the assessment or payment of any Tax, which waiver or extension has not since expired. Except as set forth in Part 2.14(c) of the Disclosure Schedule, the Company has not received any written, proposed Tax assessment for greater than $10,000 against the Company or any Company Subsidiary and none of the Company or any Company Subsidiary has received written notice of any claim concerning its Tax liability, in each case, for any taxable period ending on or after July 10, 2003.

(d)                To the Knowledge of the Company, neither the Company nor any Company Subsidiary has any material liability for the Taxes of any Person (other than the Company Subsidiaries) under Treasury Regulation § 1.1502-6 ( or any similar provision of state, local or foreign Law) as a transferee or successor.

(e)                Since January 1, 1998, neither the Company nor any Company Subsidiary has been a partner in an entity treated as a partnership for federal income Tax purposes.

(f)                The Company is not and has not been, during the applicable period specified in Section 897(c)(1)(A)(ii) of the Code, a United States real property holding corporation within the meaning of Section 897(c)(2) of the Code. Neither the Company nor any Company Subsidiary is a “foreign corporation” within the meaning of Section 1445 of the Code and will deliver a certification to that effect at the Closing.

(g)                Since January 1, 2003, no written claim has been made by any Governmental Authority in a jurisdiction where the Company or any Company Subsidiary does not file Tax Returns that it is or may be subject to Tax by that jurisdiction.

(h)                All Taxes which the Company or any Company Subsidiary is or was by any requirement of Law to collect measured by or with respect to sales or gross receipts of the Company (collectively, “Sales Taxes” ) have been collected and to the extent required have been paid to the proper Governmental Authority, provided this Section 2.14(h) shall not apply to Sales Taxes to the extent the amount required to be collected is les than or equal to $10,000.

(i)                There are no liens for any material amount of Taxes upon any of the assets of the Company or any Company Subsidiary, except liens for Taxes not yet due or liens for Taxes that are being contested in good faith by appropriate proceedings and listed in Part 2.14(i) of the Disclosure Schedule.

(j)                Neither the Company nor any Company Subsidiary will be required to include any material item of income in, or exclude any deduction from, taxable

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income for any taxable period after the Closing Date as a result of (i) any change in method of accounting for a taxable period ending on or prior to the Closing Date under Section 481(c) or 263A of the Code (or any corresponding provision of state, local or foreign Law); (ii) any closing statement (as described in Section 7121 of the Code or any corresponding provision of state, local or foreign Law) executed on or before the Closing Date; or (iii) any installment sale or open transaction disposition made on or before the Closing Date.

(k)                There is no agreement, plan, arrangement or other contract covering any employee or independent contractor or former employee or independent contractor of the Company or any Company Subsidiary that, considered individually or considered collectively with any other such contracts, will give rise to the payment of any amount that would not be deductible by the Company or any Company Subsidiary pursuant to Section 280G, of the Code (or any comparable provision under state, local or foreign tax Laws).

(l)                Neither the Company nor any Company Subsidiary has any liability to compensate any service provider for excise taxes paid pursuant to Section 4999 (or any corresponding provision of state, local or foreign law) under any contract.

(m)                None of the Company or any Company Subsidiary has (i) promoted an abusive tax shelter within the meaning of Section 6700 of the Code, or (ii) engaged in a “reportable transaction” or a “listed transaction” within the meaning of Section 6707A of the Code.

(a)                “Company Plans” means every Plan, fund, contract, program and arrangement (whether written or not) which is maintained or contributed to by the Company or a Company Subsidiary for the benefit of present or former employees and with respect to which the Company or a Company Subsidiary has any material liability. “Plan” includes any arrangement intended to provide: (i) employee welfare benefits within the meaning of Section 3(1) of ERISA, including medical, surgical, health care, hospitalization, dental, vision, workers’ compensation, life insurance, death, disability, legal services, severance, sickness, accident, educational assistance, dependent care assistance or cafeteria plan benefits, (ii) employee pension benefits within the meaning of Section 3(2) of ERISA, including pension, profit sharing, stock bonus, retirement, supplemental retirement or deferred compensation benefits (whether or not tax-qualified), and (iii) bonuses, incentive compensation, stock options, stock appreciation rights, phantom stock or stock purchase benefits, change in control benefits, salary continuation benefits, unemployment and supplemental unemployment benefits, termination pay, vacation or holiday benefits, whether or not considered a plan within the meaning of Section 3(3) of ERISA.

(b)                Part 2.15(b) of the Disclosure Schedule sets forth a list of all Company Plans. The Company has provided or made available to Parent or its counsel with respect to each and every Company Plan a true and complete copy of all Plan documents, if any, including related trust agreements, funding arrangements, and insurance contracts and all amendments thereto; and, to the extent applicable, (i) the most recent determination letter, if any, received by the Company or Company Subsidiary from the Internal Revenue Service (the “IRS” ) regarding the tax-qualified status of such Company Plan; (ii) the most recent financial

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statements for such Company Plan, if any, for each of the three most recent plan years; (iii) the actuarial valuation report, if any, for each of the three most recent plan years; (iv) the current summary plan description and any summaries of material modifications; (v) Form 5500 Annual Returns/Reports, including all schedules and attachments, including the certified audit opinions, for each of the three most recent plan years; (vi) written results of all compliance testing required pursuant to Sections 125, 401(a)(4), 401(k), 401(m), 410(b), 415, and 416 of the Code for each of the three most recent plan years, (vii) any other filings with the IRS or Department of Labor (the “DOL” ) within the last five years preceding the date of this Agreement, and (viii) service agreements with service providers for any Company Plan, if any. To the Knowledge of the Company or a Company Subsidiary, nothing has occurred that could have an adverse effect on the tax-qualified status of any of the Company Plans and their related trusts, or the favorable tax treatment intended under the Code.

(c)                All Company Plans are in compliance in all material respects with the requirements of ERISA. All Company Plans, including the Option Plans, that are subject to Section 409A of the Code have been administered in reasonable good faith compliance with such Section and IRS Notice 2005-1. With respect to the Company Plans (i) all required contributions (including all Company or Company Subsidiary contributions and employee salary reduction contributions) have been accrued and timely made (and, in the case of employee salary reduction contributions under Section 401(k) of the Code “timely made” means timely within the meaning of DOL regulations); (ii) accruals have been made on the books and records of the Company or Company Subsidiary for all future contribution obligations to the extent required by GAAP; (iii) there are no actions, suits or claims pending, other than routine uncontested claims for benefits; and (iv) during the six (6) year period prior to the date of this Agreement, to the Company’s Knowledge, no non-exempt prohibited transactions as defined in Section 406 of ERISA or Section 4975 of the Code have occurred, except as disclosed in Part 2.15(c) of the Disclosure Schedule.

(d)                The Company and the Company Subsidiaries do not maintain or contribute to (and have never maintained or contributed to) any multiemployer plan within the meaning of Section 3(37) of ERISA. Neither the Company nor any Company Subsidiary has any actual or potential material liabilities under Title IV of ERISA, including Section 4201 of ERISA, for any complete or partial withdrawal from a multiemployer plan, and no material liabilities under Title IV of ERISA, including Section 4201 of ERISA, will result from the consummation of the Merger or any post-Closing transaction that is contingent upon the consummation of the Merger.

(e)                The Company and the Company Subsidiaries do not maintain or contribute to (and have never contributed to) a defined benefit pension plan within the meaning of Section 3(35) of ERISA, whether or not subject to Title IV of ERISA.

(f)                Neither the Company nor any Company Subsidiary maintains any Company Plan that provides for post-retirement health and medical benefits for retired employees of the Company or any Company Subsidiary, except as required by applicable Law. With respect to any Company Plans which are group health plans within the meaning of Section 4980B of the Code and Section 607 of ERISA, there has been timely compliance in all material respects with all requirements imposed thereunder, and under Parts 6 and 7 of Title I of

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ERISA generally, so that the Company and the Company Subsidiary have no (and will not incur any) material loss, assessment, tax penalty or other sanction with respect to any such Company Plan.

(g)                Except as set forth in Part 2.15(g) of the Disclosure Schedule, neither the Company nor any Company Subsidiary has any actual or potential material liability for death or medical benefits under the Company Plans (whether or not subject to ERISA) or for health care continuation benefits described in Section 4980B of the Code or other applicable Law.

(h)                Except as set forth in Part 2.15(h) of the Disclosure Schedule, there has been no amendment, interpretation, or announcement (whether or not written) by the Company or any Company Subsidiary relating to any Company Plan which would materially change employee participation or coverage, or materially increase the expense of maintaining such Company Plan above the level of the expense incurred with respect thereto for the fiscal year ended immediately prior to the Closing Date.

(i)                Except as set forth in Part 2.15(i) of the Disclosure Schedule, the events contemplated by this Agreement will not trigger, accelerate, or otherwise entitle any current or former employees of the Company or Company Subsidiary to severance or other benefits.

(j)                Neither the Company nor any Company Subsidiary, nor any of their directors or officers (or Board members, as applicable), employees or other fiduciaries, within the meaning of Section 3(21) of ERISA, have committed any breach of fiduciary responsibility imposed by ERISA with respect to the Company Plans which would subject the Company or any Company Subsidiary or any of their directors or officers (or Board members, as applicable), employees or other fiduciaries to any material liability under ERISA.

(k)                There are no other trades or business (other than the Company Subsidiaries) whether or not incorporated which, together with the Company, would be deemed to be a “single employer” within the meaning of Section 414(b), (c) or (m) of the Code.

(l)                Except with respect to taxes on benefits earned, no material tax has been waived, excused or paid or is owed by any Person (including any Company Plan, any Company Plan fiduciary or the Company or any Company Subsidiary) with respect to the operations of, or any transactions with respect to, any Company Plan. To the Knowledge of the Company, no action has been taken by the Company or any Company Subsidiary, nor has there been any failure by the Company or any Company Subsidiary to take any action, nor is any action or failure to take action contemplated by the Company or any Company Subsidiary (including all actions contemplated under this Agreement), that would subject any Person to any material liability or tax imposed by the IRS, the DOL, or the Pension Benefit Guaranty Corporation in connection with any Company Plan, other than taxes on benefits earned. To the Knowledge of the Company, no reserve for any taxes has been established with respect to any Company Plan by the Company or any Company Subsidiary nor has any advice been given to the Company or any Company Subsidiary with respect to the need to establish such a reserve.

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(m)                There are no legal, administrative or other proceedings or Governmental Authority investigations or audits, or written complaints to or by any Governmental Authority, which are pending, anticipated or, to the Knowledge of the Company, threatened against any Company Plan or its assets, or against any Plan fiduciary or administrator, or against the Company or any Company Subsidiary, or their directors or officers (or Board members, as applicable), employees or other fiduciaries with respect to any Company Plan other than any proceedings, investigations, audits, or complaints that are not material.

(n)                There are no leased employees, as defined in Section 414(n) of the Code providing services to the Company or any Company Subsidiary that must be taken into account with respect to the requirements under Section 414(n)(3) of the Code.

(o)                Except as may be otherwise provided in Section 5.3, and other than the liabilities of Company Plans for benefits owed to the employees participating in the Company Plans accrued prior to the Closing Date, or if later, the time of termination of such Plans, and reasonable expenses of administration of such Plans, no Company Plan has unfunded liabilities and any Company Plan may be terminated, directly or indirectly by the Company or sponsoring Company Subsidiary, in its sole discretion, at any time before or after the Closing Date in accordance with its terms, without causing the Company or sponsoring Company Subsidiary to incur any material liability to any Person for any action, conduct, practice or omission of the Company or sponsoring Company Subsidiary which occurred prior to the Closing Date. Notwithstanding the foregoing, certain Company Plans have liabilities for continuation coverage as may be required by the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended, or other applicable Law, as described in the Part 2.15(o) of Disclosure Schedule.

(p)                Except as set forth in Part 2.15(p) of the Disclosure Schedule, the execution and delivery of this Agreement and the consummation of the Merger will not result in (i) any “golden parachute” that will trigger the imposition of a Tax under Section 4999 of the Code, or severance payments to any employee or Board member of the Company or any Company Subsidiary; (ii) any payment being made that will result in its, or any part thereof, becoming nondeductible under Section 162(m) of the Code, (iii) any increase in the benefits payable under any Company Plan; and (iv) any acceleration of the time of payment or vesting of any benefits under any Company Plan, except as described in Part 2.15(p) of the Disclosure Schedule.

(a)                Except as set forth in Part 2.16(a) of the Disclosure Schedule, the Company and the Company Subsidiaries are in material compliance with all Laws respecting employment, discrimination in employment, terms and conditions of employment, wages, hours and occupational safety and health and employment practices, and are not engaged in any unfair labor practice. Except as set forth in Part 2.16(a) of the Disclosure Schedule, the Company and the Company Subsidiaries have withheld all amounts required by Law or by agreement to be withheld from the wages, salaries, and other payments to employees and are not liable for any arrears of wages or any material Taxes or any penalty for failure to comply with any of the foregoing. The Company and the Company Subsidiaries are not liable for any material payment

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to any trust or other fund or to any Governmental Authority, with respect to unemployment compensation benefits, social security or other benefits or obligations for employees (other than routine payments to be made in the ordinary and usual course of business and consistent with past practice). No Governmental Authority responsible for the enforcement of labor or employment Laws intends to conduct an investigation with respect to the Company or any Company Subsidiary, and no such investigation is in progress. Except as set forth in Part 2.16(a) of the Disclosure Schedule, no employee of the Company or any Company Subsidiary has a written employment agreement. Except as set forth in Part 2.16(a) of the Disclosure Schedule, every employee of the Company or any Company Subsidiary is an employee at will whose employment may be terminated without the payment of severance benefits other than those required by applicable federal or state Law.

(b)                Except as set forth in Part 2.16(b) of the Disclosure Schedule, neither the Company nor any Company Subsidiary is a party to or bound by or has previously had or currently has an obligation to perform (including make payments) under any collective bargaining agreement or any contract or other agreement or understanding with a labor union, labor organization or labor advocacy group. To the Company’s Knowledge, there are no labor unions or other organizations attempting to represent any employees of the Company or any Company Subsidiary. There are no pending material representation petitions involving either the Company or any Company Subsidiary before the National Labor Relations Board or any state labor board. Neither the Company nor any Company Subsidiary is subject to any material unfair labor practice charge or any complaint, dispute, strike, work stoppage or public demonstration. To the Knowledge of the Company, there are no material organizational efforts with respect to the formation of a collective bargaining and presently being made or threatened involving employees of the Company or any Company Subsidiary.

(a)                Except as set forth in Part 2.17(a) of the Disclosure Schedule, the Real Property and the Leased Properties and the operations and activities of the Company and the Company Subsidiaries are in material compliance with all applicable Environmental Laws.

(b)                Except as set forth in Part 2.17(b) of the Disclosure Schedule, neither the Company nor any Company Subsidiary or the properties and operations of any of them, are subject to any existing or threatened in writing claim, action, suit, citation, summons, order, agreement, penalty assessment, judgment, decree, proceeding, investigation or remedial or corrective action by or before any court or Governmental Authority under any Environmental Law.

(c)                The Company and the Company Subsidiaries have all material Permits required to be obtained or filed by the Company and the Company Subsidiaries under any applicable Environmental Law in connection with their businesses (hereinafter “Environmental Permits” ). Each such Environmental Permit will remain in full force and effect upon consummation of the Closing without notice to or approval by any Person, without additional payment and without any material modification of rights and privileges thereunder. Such Environmental Permits are valid and in full force and effect and have not been threatened in writing with suspension or revocation by any Governmental Authority. The Company and the

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Company Subsidiaries are in material compliance with the terms and conditions of all Environmental Permits.

(d)                Neither Company nor any Company Subsidiary currently stores any Hazardous Materials on real properties now owned, leased or used by any of them in a manner that violates any applicable Environmental Law and has not, to the Company’s Knowledge, Released any Hazardous Materials in a manner that is materially contrary to any applicable Environmental Laws.

(e)                The Company has made available true and complete copies of all documents, reports, or analyses in its possession or control relating to the presence or absence of Hazardous Materials on, at, under or migrating from or onto any Real Property or Leased Property. Part 2.17(e) of the Disclosure Schedule sets forth a list of all such documents, reports or analyses.

(f)                Except as set forth in Part 2.17(f) of the Disclosure Schedule, to the Company’s Knowledge, there are no underground storage tanks which now exist on any Real Property or, to the Company’s Knowledge, any Leased Property.

(g)                Except as set forth in Part 2.17(g) of the Disclosure Schedule, the Company has not been notified in writing that any building or structure at any Real Property or Leased Property contains any asbestos or asbestos-containing material in violation of Environmental Laws, urea formaldehyde foam insulation, or polychlorinated biphenyls (PCBs) in concentrations exceeding 50 parts per million (ppm).

(h)                During the Company’s (or the Company Subsidiary’s) period of ownership with respect to any Real Property and during the lease term with respect to any Leased Property: (i) there has not been any closure or cessation of the use of such property as a result of any Release of Hazardous Materials and (ii) the Company or any Company Subsidiary has not been identified in any litigation, administrative proceeding or investigation as a responsible party or potentially responsible party for any liability for response costs or other damages or liability for prior disposal or Release of Hazardous Materials.

2.18.                Insurance. Part 2.18 of the Disclosure Schedule sets forth a true and complete schedule of insurances of the Company and the Company Subsidiaries. All applications for the Company’s and the Company Subsidiaries’ insurance policies were substantially true and correct when submitted, and the Company and the Company Subsidiaries did not omit to disclose any material information required to be disclosed. Except as set forth in Part 2.18 of the Disclosure Schedule, there is no material claim pending under the Company’s or any Company Subsidiary’s insurance policies or fidelity bonds as to which coverage has been questioned, denied or disputed by the underwriters of such policies or bonds. There is no claim pending under the Company’s or any Company Subsidiary’s insurance which, individually or in the aggregate, can be reasonably expected to exceed the applicable policy limits. The Company and the Company Subsidiaries are in compliance with the terms of such policies and bonds. The Company has no Knowledge of any threatened termination of, or material premium increase with respect to, any such policies or bonds.

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(a)                Except as set forth in Part 2.19(a) of the Disclosure Schedule, there is no private or governmental action, lawsuit, proceeding, arbitration or other legal proceeding pending before any court, administrative body, regulatory body or arbitration forum (or, to the Knowledge of the Company, being threatened in writing) against the Company or any Company Subsidiary. To the extent any such legal proceeding is not covered by insurance or the insurance is not adequate, Part 2.19(a) of the Disclosure Schedule sets forth the amounts the Company has reserved for defense costs and indemnity.

(b)                Except as set forth in Part 2.19(b) of the Disclosure Schedule, there are no judgments, decrees or orders against the Company or any Company Subsidiary or, to the Knowledge of the Company, against any of their respective directors or officers (or Board members, as applicable) (in their capacities as such) unsatisfied of record or docketed in any court located in the United States of America. No petition in bankruptcy has ever been filed by or against the Company or any Company Subsidiary. Neither the Company nor any Company Subsidiary has ever made any assignment for the benefit of creditors or taken advantage of any insolvency act or any act for the benefit of debtors. No receiver, conservator, liquidating agent or similar person or entity has been appointed, nor has anyone sought such a receiver, conservator, liquidating agent or similar person or entity to be appointed, for any portion of the assets of the Company or any Company Subsidiary.

2.20.                Corporate Authority; Binding Nature of Agreement. The Company has all necessary corporate power and authority to enter into this Agreement and, subject to receipt of the Required Company Stockholder Vote, to consummate the transactions contemplated by this Agreement. The execution and delivery of this Agreement and the consummation of the transactions contemplated by this Agreement have been duly and validly authorized by the Board and, to the extent required, unanimously by the Special Committee of the Board of the Company (the “Special Committee” ) and, except for (i) the Required Company Stockholder Vote, and (ii) the filing of the Certificate of Merger with the Secretary of State of the State of Delaware, no other corporate proceedings on the part of the Company are necessary to authorize this Agreement or the consummation of the transactions contemplated by this Agreement. As of the date hereof, the Special Committee unanimously determi