AGREEMENT AND PLAN OF MERGER

Agreement and Plan of Merger

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AKI INC | FUSION ACQUISITION LLC | AHC MERGER, INC. | AHC I ACQUISITION CORP.

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Title: AGREEMENT AND PLAN OF MERGER
Governing Law: New York Date: 9/1/2004
Law Firm: Simpson Thacher & Bartlett LLP; Weil Gotshal & Manges LLP;

Exhibit 2.1

AGREEMENT AND PLAN OF MERGER

Dated as of July 21, 2004

Among

FUSION ACQUISITION LLC

AHC MERGER, INC.

And

AHC I ACQUISITION CORP.

<PAGE>

TABLE OF CONTENTS

Page

ARTICLE I THE MERGER....................................................2

SECTION 1.01. The Certificate of Designations Amendment and

the Merger............................................2

SECTION 1.02. Closing...............................................2

SECTION 1.03. Effective Time........................................2

SECTION 1.04. Effects of the Merger.................................2

SECTION 1.05. Certificate of Incorporation and By-laws..............3

SECTION 1.06. Directors.............................................3

SECTION 1.07. Officers..............................................3

ARTICLE II EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE

CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES

AND THE COMPANY STOCK OPTIONS.................................3

SECTION 2.01. Effect on Capital Stock...............................3

SECTION 2.02. Exchange of Certificates..............................5

SECTION 2.03. Company Stock Options.................................7

SECTION 2.04. Closing Date and Post-Closing Merger

Consideration Adjustment..............................7

ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY................10

SECTION 3.01. Organization, Standing and Corporate Power...........10

SECTION 3.02. Capital Structure....................................10

SECTION 3.03. Authority; Noncontravention..........................11

SECTION 3.04. Governmental Approvals...............................12

SECTION 3.05. Litigation...........................................12

SECTION 3.06. Compliance with Laws; Permits........................13

SECTION 3.07. Affiliate Transactions...............................13

SECTION 3.08. Subsidiaries.........................................14

SECTION 3.09. No Brokers...........................................14

SECTION 3.10. SEC Reports; Financial Statements....................14

SECTION 3.11. Undisclosed Liabilities..............................15

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TABLE OF CONTENTS

(continued)

Page

SECTION 3.12. Intellectual Property................................15

SECTION 3.13. Contracts and Commitments............................16

SECTION 3.14. Employee Benefits....................................16

SECTION 3.15. Absence of Certain Changes...........................18

SECTION 3.16. Taxes................................................21

SECTION 3.17. Insurance............................................23

SECTION 3.18. Environmental Matters................................24

SECTION 3.19. Real Property........................................25

SECTION 3.20. Labor Relations......................................27

SECTION 3.21. Inventories; Receivables; Payables...................27

SECTION 3.22. Customers, Suppliers and Sales Representatives.......28

SECTION 3.23. No Other Representations or Warranties...............28

ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB......28

SECTION 4.01. Organization, Standing and Corporate Power...........28

SECTION 4.02. Authority; Noncontravention..........................28

SECTION 4.03. Governmental Approvals...............................29

SECTION 4.04. Litigation...........................................29

SECTION 4.05. Brokers and Other Advisors...........................30

SECTION 4.06. Interim Operations of Merger Sub.....................30

ARTICLE V COVENANTS RELATING TO CONDUCT OF BUSINESS....................30

SECTION 5.01. Conduct of Business..................................30

ARTICLE VI ADDITIONAL AGREEMENTS........................................33

SECTION 6.01. Section 262 Notice and Information Statement;

Section 228(e) Notice................................33

SECTION 6.02. Access to Information; Confidentiality...............33

SECTION 6.03. Efforts..............................................34

SECTION 6.04. Indemnification, Exculpation and Insurance...........34

SECTION 6.05. Cooperation..........................................35

SECTION 6.06. Fees and Expenses....................................36

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TABLE OF CONTENTS

(continued)

Page

SECTION 6.07. Public Announcements.................................37

SECTION 6.08. Stock Option Plan....................................37

SECTION 6.09. Further Assurances...................................37

SECTION 6.10. Termination of Affiliate Arrangements................37

SECTION 6.11. Equity Commitment....................................37

ARTICLE VII CONDITIONS PRECEDENT.........................................37

SECTION 7.01. Conditions to Each Party's Obligation to

Effect the Merger....................................37

SECTION 7.02. Conditions to Obligations of Parent and

Merger Sub...........................................38

SECTION 7.03. Conditions to Obligations of the Company.............39

SECTION 7.04. Frustration of Closing Conditions....................39

SECTION 7.05. Documents to be Delivered by the Company.............39

SECTION 7.06. Documents to be Delivered by Parent and

Merger Sub...........................................39

ARTICLE VIII TERMINATION, AMENDMENT AND WAIVER............................40

SECTION 8.01. Termination..........................................40

SECTION 8.02. Effect of Termination................................40

SECTION 8.03. Amendment............................................40

SECTION 8.04. Extension; Waiver....................................40

ARTICLE IX GENERAL PROVISIONS...........................................41

SECTION 9.01. Nonsurvival..........................................41

SECTION 9.02. Remedies; Specific Enforcement.......................41

SECTION 9.03. Notices..............................................41

SECTION 9.04. Definitions..........................................43

SECTION 9.05. Interpretation.......................................44

SECTION 9.06. Counterparts.........................................44

SECTION 9.07. Entire Agreement; Third-Party Beneficiaries..........45

SECTION 9.08. Governing Law........................................45

SECTION 9.09. Assignment...........................................45

SECTION 9.10. Consent to Jurisdiction..............................45

iii

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TABLE OF CONTENTS

(continued)

Page

SECTION 9.11. Waiver of Jury Trial.................................45

SECTION 9.12. No Recourse..........................................45

SECTION 9.13. Severability.........................................45

EXHIBIT A - Contribution Agreement

EXHIBIT B - Certificate of Designations Amendment

<PAGE>

Table of Defined Terms

----------------------

Term Section

---- -------

Affiliate...................................................... 9.04(a)

Affiliate Agreement............................................ 3.07

Agreement...................................................... Preamble

AKI............................................................ 2.01(c)

Appraisal Shares............................................... 2.01(d)

Business Day................................................... 9.04(b)

Certificate.................................................... 2.01(c)

Certificate of Designations.................................... 1.01

Certificate of Designations Amendment.......................... 1.01

Certificate of Merger.......................................... 1.03

Closing........................................................ 1.02

Closing Date................................................... 1.02

Closing Working Capital........................................ 2.04(f)

Code........................................................... 2.02(f)

Company........................................................ Preamble

Company By-laws................................................ 3.03(b)

Company Cash................................................... 2.01(c)

Company Certificate............................................ 3.03(b)

Company Common Stock........................................... 2.01

Company Disclosure Schedule.................................... Article III

Company Indebtedness........................................... 2.01(c)

Company Preferred Stock........................................ 1.01(a)

Company Real Property.......................................... 3.19(a)

Company Stock Options.......................................... 3.02

Company Stock Plan............................................. 2.03

Confidential Information....................................... 6.02(b)

Contract....................................................... 9.04(c)

Contribution Agreement......................................... Recitals

Credit Facility................................................ 2.01(c)

Debt Tender Offer.............................................. 6.05

DGCL........................................................... 1.01

Effective Time................................................. 1.03

Environmental Claims........................................... 3.18(a)(v)

Environmental Laws............................................. 3.18(d)(i)

Environmental Liabilities...................................... 3.18(d)(ii)

ERISA.......................................................... 3.14(a)

Estimated Working Capital...................................... 2.04(b)

Estimated Working Capital Statement............................ 2.04(b)

Exchange Act................................................... 9.04(d)

Financial Statements........................................... 3.10(b)

Former Company Real Property................................... 3.18(d)(iii)

GAAP........................................................... 2.01(c)

<PAGE>

Table of Defined Terms

----------------------

Term Section

---- -------

Governmental Authority......................................... 9.04(e)

Hazardous Substances........................................... 3.18(d)(iv)

HSR Act........................................................ 3.04

Independent Accounting Firm.................................... 2.04(e)

Intellectual Property.......................................... 3.12

IRS............................................................ 3.16(b)

JHC............................................................ Preamble

Knowledge...................................................... 9.04(f)

Laws........................................................... 3.03(b)

Leased Real Property........................................... 3.19(a)

Liens.......................................................... 9.04(g)

Material Adverse Effect........................................ 9.04(h)

Merger......................................................... Recitals

Merger Consideration........................................... 2.01(c)

Merger Sub..................................................... Preamble

Multi-Employer Plan............................................ 3.14(d)

Objection Notice............................................... 2.04(d)

Objection Period............................................... 2.04(d)

Owned Real Property............................................ 3.19(a)

Parent......................................................... Preamble

Payment Fund................................................... 2.02(a)

Per Share Merger Consideration................................. 2.01(c)

Permits........................................................ 3.06(b)

Permitted Exceptions........................................... 3.19(e)

person......................................................... 9.04(i)

PIK Notes...................................................... 2.01(c)

Plans.......................................................... 3.14(a)

Real Property Leases........................................... 3.19(a)

Restraints..................................................... 7.01(b)

SEC............................................................ 3.10(a)

SEC Reports.................................................... 3.10(a)

Section 262.................................................... 2.01(d)

Securities Act................................................. 9.04(j)

Senior Notes................................................... 2.01(c)

Stockholder Approvals.......................................... Recitals

Stockholder Representative..................................... 2.04(a)

Subsidiary..................................................... 9.04(k)

Subsidiary Shares.............................................. 3.08(b)

Surviving Corporation.......................................... 1.01(b)

Surviving Corporation Representative........................... 2.04(a)

Target Working Capital......................................... 2.01(c)

Tax............................................................ 3.16

<PAGE>

Table of Defined Terms

----------------------

Term Section

---- -------

Tax Returns.................................................... 3.16

Title IV Plan.................................................. 3.14(d)

Transaction Expenses........................................... 6.06

Transactions................................................... Recitals

VHH............................................................ Recitals

VHH Merger Agreement........................................... Recitals

WC Difference.................................................. 2.04(g)

Working Capital................................................ 2.04(f)

Working Capital Escrow Amount.................................. 2.02(a)

Working Capital Statement...................................... 2.04(c)

vii

<PAGE>

AGREEMENT AND PLAN OF MERGER

This AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of July 21,

2004, is among FUSION ACQUISITION LLC, a Delaware limited liability company

("Parent"), AHC MERGER, INC., a Delaware corporation and a wholly-owned

Subsidiary of Parent ("Merger Sub"), and AHC I ACQUISITION CORP., a Delaware

corporation (the "Company").

WHEREAS, the Board of Directors of each of Merger Sub and the Company has

approved and declared advisable, and the Board of Directors of Parent has

approved, this Agreement and the merger of Merger Sub with and into the Company

(the "Merger"), upon the terms and subject to the conditions set forth in this

Agreement.

WHEREAS, the Board of Directors of the Company has approved and declared

advisable the Certificate of Designations Amendment as defined and further

described below.

WHEREAS, the holders of a majority of the outstanding shares of Company

Common Stock and Company Preferred Stock have executed a written consent

approving and adopting this Agreement, and the holders of a majority of the

outstanding shares of Company Preferred Stock have executed a written consent

approving and adopting the Certificate of Designations Amendment (the

"Stockholder Approvals").

WHEREAS, concurrently herewith, Parent has entered into that certain

Agreement and Plan of Merger, dated as of even date herewith, among Parent, VHH

Merger, Inc. and Von Hoffmann Holdings Inc. ("VHH"), pursuant to which VHH

Merger, Inc. will merge with and into VHH (the "VHH Merger Agreement").

WHEREAS, concurrently herewith, Parent has entered into that certain

Contribution Agreement among Parent and Jostens Holding Corp. ("JHC") (the

"Contribution Agreement") substantially in the form attached hereto as Exhibit

WHEREAS, the transactions contemplated by this Agreement, the VHH Merger

Agreement and the Contribution Agreement are collectively referred to herein as

the "Transactions").

WHEREAS, Parent, Merger Sub and the Company desire to make certain

representations, warranties, covenants and agreements in connection with the

Merger and also to prescribe various conditions to the Merger.

NOW, THEREFORE, in consideration of the representations, warranties,

covenants and agreements contained in this Agreement, the parties hereto agree

as follows:

<PAGE>

ARTICLE I

THE MERGER

SECTION 1.01 The Certificate of Designations Amendment and the Merger.

(a) Upon the terms and subject to the conditions set forth in this

Agreement, as soon as is reasonably practicable after the date hereof, the

Company shall file with the Secretary of State of the State of Delaware a

Certificate of Amendment to the Certificate of Designations, Rights and

Preferences (the "Certificate of Designations") of the 15% Senior Preferred

Stock, par value $0.01 per share, of the Company ("Company Preferred Stock")

effecting the amendment to the Certificate of Designations set forth on Exhibit

B hereto (such amendment, the "Certificate of Designations Amendment") (which

Certificate of Amendment shall provide for the effectiveness of the Certificate

of Designations Amendment upon the filing of such Certificate of Amendment).

(b) Upon the terms and subject to the conditions set forth in this

Agreement and in accordance with the General Corporation Law of the State of

Delaware (the "DGCL"), Merger Sub shall be merged with and into the Company at

the Effective Time. Following the Effective Time, the separate corporate

existence of Merger Sub shall cease, and the Company shall continue as the

surviving corporation in the Merger (the "Surviving Corporation") and shall

succeed to and assume all the rights and obligations of Merger Sub in accordance

with the DGCL.

SECTION 1.02 Closing. The closing of the Merger (the "Closing") will take

place at 10:00 a.m. on a date to be specified by the parties (the "Closing

Date"), which shall be no later than the tenth day after satisfaction or waiver

of the conditions set forth in Article VII (other than those conditions that by

their terms are to be satisfied at the Closing, but subject to the satisfaction

or waiver of those conditions), at the offices of Weil, Gotshal & Manges LLP,

767 Fifth Avenue, New York, New York 10153, unless another date or place is

agreed to by the parties hereto.

SECTION 1.03 Effective Time. Subject to the provisions of this Agreement,

as soon as practicable on the Closing Date, the parties shall file a certificate

of merger (the "Certificate of Merger") executed in accordance with the relevant

provisions of the DGCL and, as soon as practicable on or after the Closing Date,

shall make all other filings or recordings required under the DGCL. The Merger

shall become effective at such time as the Certificate of Merger is duly filed

with the Secretary of State of the State of Delaware, or at such other time as

Parent and the Company shall agree and shall specify in the Certificate of

Merger (the time the Merger becomes effective being the "Effective Time").

SECTION 1.04 Effects of the Merger. The Merger shall have the effects set

forth in Section 259 of the DGCL.

<PAGE>

SECTION 1.05 Certificate of Incorporation and By-laws.

(a) The Certificate of Incorporation of the Surviving Corporation shall be

the Certificate of Incorporation of the Company in effect immediately prior to

the Effective Time until thereafter changed or amended as provided therein and

by applicable Law.

(b) The By-laws of the Surviving Corporation shall be the By-laws of the

Company in effect immediately prior to the Effective Time until thereafter

changed or amended as provided therein and by applicable Law.

SECTION 1.06 Directors. The directors of Merger Sub immediately prior to

the Effective Time shall be the directors of the Surviving Corporation until the

earlier of their resignation or removal or until their respective successors are

duly elected and qualified, as the case may be.

SECTION 1.07 Officers. The officers of the Company immediately prior to the

Effective Time shall be the officers of the Surviving Corporation, until the

earlier of their resignation or removal or until their respective successors are

duly elected and qualified, as the case may be.

ARTICLE II

EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE

CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES

AND THE COMPANY STOCK OPTIONS

SECTION 2.01 Effect on Capital Stock. As of the Effective Time, by virtue

of the Merger and without any action on the part of the holders of any shares of

common stock, par value $0.01 per share, of the Company ("Company Common

Stock"), any shares of Company Preferred Stock or any shares of capital stock of

Merger Sub:

(a) Capital Stock of Merger Sub. Each issued and outstanding share of

capital stock of Merger Sub shall be converted into and become one validly

issued, fully paid and nonassessable share of common stock, par value $0.01 per

share, of the Surviving Corporation.

(b) Cancellation of Company Common Stock and Treasury Stock. Each share of

Company Common Stock shall automatically be canceled and retired and shall cease

to exist, and no consideration shall be delivered in exchange therefor. Each

share of Company Preferred Stock that is owned by the Company shall

automatically be canceled and retired and shall cease to exist, and no

consideration shall be delivered in exchange therefor.

share of Company Preferred Stock other than the Appraisal Shares) shall be

converted into the right to receive an amount in cash, without interest, equal

to the Merger Consideration divided by the number of shares of Company Preferred

Stock

<PAGE>

issued and outstanding immediately prior to the Effective Time (other than

shares to be canceled in accordance with Section 2.01(b)) (the "Per Share Merger

Consideration"). At the Effective Time, all such shares of Company Preferred

Stock shall no longer be outstanding and shall automatically be canceled and

retired and shall cease to exist, and each holder of a certificate which

immediately prior to the Effective Time represented any such shares of Company

Preferred Stock (each, a "Certificate") shall cease to have any rights with

respect thereto, except the right to receive the Per Share Merger Consideration

with respect to such shares. The Merger Consideration to be received by any

holder of Company Preferred Stock will be reduced by any outstanding amounts

owing by such holder to the Company pursuant to any loans or advances, to the

extent not repaid prior to the Closing Date.

"Merger Consideration" means an amount equal to (a) $250,000,000 plus

(b) the aggregate amount of Transaction Expenses actually paid by the

Company prior to the determination of Company Cash minus (c) the aggregate

amount of all Company Indebtedness net of Company Cash minus (d) an amount

not to exceed $2,000,000 to be determined by the Board of Directors of the

Company or a committee thereof for transaction success or retention bonuses

to be paid to employees of the Company minus (e) a transaction advisory fee

in the amount of $2,000,000 to be paid to DLJ Merchant Banking II, Inc.

minus (f) any amount payable to Renaissance Brands LLC as set forth in

Section 3.07(iii) of the Company Disclosure Schedule plus (g) the amount,

if any, by which the Closing Working Capital exceeds $16,292,000 (the

"Target Working Capital") minus (h) the amount, if any, by which the Target

Working Capital exceeds the Closing Working Capital.

"Company Cash" means, collectively, the aggregate amount held as of

the close of business on the day immediately preceding the Closing Date by

the Company and its Subsidiaries in cash, cash equivalents and other liquid

short-term investments, minus any unpaid checks, drafts and wire transfers

issued on or prior to the close of business on the day immediately

preceding the Closing Date.

"Company Indebtedness" means, collectively, as of the close of

business on the day immediately preceding the Closing Date, (i) all

amounts, including accrued but unpaid interest, required to repay, redeem

or repurchase (by tender offer or otherwise), whether prior to, at or

following the Closing, the Company's Floating Rate Exchangeable PIK Notes

due 2009 (the "PIK Notes") and AKI's 10.5% Senior Notes due 2008 (the

"Senior Notes"), and all costs and expenses arising from or relating

thereto including any termination or prepayment penalties, repayment or

redemption premiums or consent solicitation costs (including related fees

and expenses of counsel, advisors, consultants, investment bankers, dealer

managers, actuaries, auditors and accountants in connection with such

repayments, redemptions or repurchases, including such tender offers and

consent solicitations), and (ii) all amounts outstanding under the Credit

Agreement, dated December 18, 2001, among AKI, Inc. ("AKI"), as borrower,

Heller Financial, Inc., as agent, issuing lender and a lender and the

lenders party thereto, as amended (the "Credit Facility") and all costs and

expenses arising from

<PAGE>

or relating thereto, including any accrued and unpaid interest and any

termination or prepayment penalties, (iii) any other indebtedness for

borrowed money (including any notes, bonds, debentures, drawn letters of

credit or similar instruments or obligations but excluding any undrawn

letters of credit) of the Company outstanding, in each case including

accrued and unpaid interest and any termination or prepayment penalties or

premiums relating thereto, and (v) the amount of all obligations of the

Company under leases required to be capitalized in accordance with

generally accepted accounting principles in the United States as of the

date hereof ("GAAP") that would be required to be set forth as a liability

on a balance sheet prepared in accordance with GAAP.

(d) Appraisal Rights. Notwithstanding anything in this Agreement to the

contrary, shares (the "Appraisal Shares") of Company Common Stock and Company

Preferred Stock issued and outstanding immediately prior to the Effective Time

that are held by any holder who is entitled to demand and properly demands

appraisal of such shares pursuant to, and who complies in all respects with, the

provisions of Section 262 of the DGCL ("Section 262") shall be entitled to

payment of the fair value of such shares in accordance with the provisions of

Section 262. At the Effective Time, all Appraisal Shares shall no longer be

outstanding and shall automatically be canceled and shall cease to exist, and

each holder of Appraisal Shares shall cease to have any rights with respect

thereto, except the right to receive the fair value of such Appraisal Shares in

accordance with the provisions of Section 262. Notwithstanding the foregoing, if

any such holder shall fail to perfect or otherwise shall waive, withdraw or lose

the right to appraisal under Section 262 or a court of competent jurisdiction

shall determine that such holder is not entitled to the relief provided by

Section 262, then the right of such holder to be paid the fair value of such

holder's Appraisal Shares under Section 262 shall cease and such Appraisal

Shares shall be deemed to have been canceled and retired at the Effective Time

as provided in Section 2.01(b) or converted at the Effective Time as provided in

Section 2.01(c). The Company shall serve prompt notice to Parent of any demands

for appraisal of any shares of Company Common Stock or Company Preferred Stock,

and Parent shall have the right to participate in all negotiations and

proceedings with respect to such demands. Prior to the Effective Time, the

Company shall not, without the prior written consent of Parent, make any payment

with respect to, or settle or offer to settle, any such demands, or agree to do

any of the foregoing.

SECTION 2.02 Exchange of Certificates.

(a) At the Closing, Parent will contribute to the Surviving Corporation, by

wire transfer of immediately available funds denominated in U.S. dollars to the

account designated in writing to Parent by the Company prior to the Closing, an

amount in cash equal to the Merger Consideration determined based on the

Estimated Working Capital Statement (such amount, the "Payment Fund"). The

Surviving Corporation shall, pursuant to irrevocable instructions, pay, at the

Closing, the Merger Consideration payable to each holder of Company Preferred

Stock, determined based upon the Estimated Working Capital Statement, less the

Working Capital Escrow Amount, in accordance with Section 2.01(c) out of the

Payment Fund. The Surviving Corporation shall deposit $5,000,000 (the "Working

Capital Escrow Amount") with an

<PAGE>

escrow agent and pursuant to an escrow agreement, each to be agreed upon by the

parties hereto, and any adjustment as determined pursuant to Section 2.04 shall

be applied against the Working Capital Escrow Amount.

(b) Exchange Procedures. As soon as reasonably practicable after the date

hereof, the Surviving Corporation shall mail to each holder of record of a

Certificate (i) a form of letter of transmittal (which shall specify that

delivery shall be effected, and risk of loss and title to the Certificates shall

pass, only upon delivery of the Certificates to the Surviving Corporation and

which shall be in such form (including representations and warranties) as Parent

and the Company may reasonably agree to use) and (ii) instructions for use in

surrendering the Certificates in exchange for the Merger Consideration. At the

Effective Time, the Surviving Corporation shall pay to each holder of Company

Preferred Stock that has delivered to the Surviving Corporation at the Closing a

Certificate and a Letter of Transmittal the amount of cash into which the shares

of Company Preferred Stock formerly represented by such Certificate shall have

been converted pursuant to Section 2.01(c), and the Certificate so surrendered

shall forthwith be canceled. In the event of a transfer of ownership of shares

of Company Preferred Stock that is not registered in the transfer records of the

Company, the proper amount of cash may be paid in exchange therefor to a person

other than the person in whose name the Certificate so surrendered is registered

if such Certificate shall be properly endorsed or otherwise be in proper form

for transfer and the person requesting such issuance shall pay any transfer or

other taxes required by reason of the payment to a person other than the

registered holder of such Certificate or establish to the reasonable

satisfaction of the Surviving Corporation that such tax has been paid or is not

applicable. Until surrendered as contemplated by this Section 2.02(b), each

Certificate shall be deemed at any time after the Effective Time to represent

only the right to receive upon such surrender the Merger Consideration. No

interest will be paid or will accrue on the cash payable upon surrender of any

Certificate.

upon the surrender of Certificates in accordance with the terms of this ARTICLE

II shall be deemed to have been in full satisfaction of all rights pertaining to

the shares of Company Preferred Stock previously represented by such

Certificates. 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 or Company Preferred

Stock that were outstanding immediately prior to the Effective Time. Subject to

Section 2.02(d), if, at any time after the Effective Time, Certificates are

presented to the Surviving Corporation for any reason, they shall be canceled

and exchanged as provided in this ARTICLE II.

(d) No Liability. None of Parent, Merger Sub or the Company shall be liable

to any person in respect of any cash delivered to a public official pursuant to

any applicable abandoned property, escheat or similar Law.

(e) Lost Certificates. If any Certificate shall have been lost, stolen or

destroyed, upon the making of an affidavit of that fact by the person claiming

such Certificate to be lost, stolen or destroyed and, if required by the

Surviving Corporation,

<PAGE>

the posting by such person of a bond in such reasonable amount as the Surviving

Corporation may direct as indemnity against any successful claim that may be

made against it with respect to such Certificate, the Surviving Corporation will

issue in exchange for such lost, stolen or destroyed Certificate the Merger

Consideration to which such holder would be entitled pursuant to this ARTICLE

II.

(f) Withholding Rights. The Surviving Corporation shall be entitled to

deduct and withhold from the consideration otherwise payable to any holder of

shares of Company Preferred Stock pursuant to this Agreement such amounts as may

be required to be deducted and withheld with respect to the making of such

payment under the Internal Revenue Code of 1986, as amended (the "Code"), and

the rules and regulations promulgated thereunder, or under any provision of

state or foreign tax Law. To the extent that amounts are so withheld by the

Surviving Corporation, as the case may be, such withheld amounts will be treated

for all purposes of this Agreement as having been paid to the holder of the

shares of Company Preferred Stock in respect of which such deduction and

withholding was made.

SECTION 2.03 Company Stock Options. Each Company Stock Option granted under

the Company's 1998 Stock Option Plan (the "Company Stock Plan") outstanding

immediately prior to the Effective Time shall be canceled and extinguished and

no consideration will be paid thereon.

SECTION 2.04 Closing Date and Post-Closing Merger Consideration Adjustment.

The Merger Consideration shall be subject to adjustment following the Closing as

follows:

(a) DLJ Merchant Banking II, Inc. shall serve as representative of the

stockholders of the Company (prior to the Merger) (the "Stockholder

Representative")for purposes of this Section 2.04 and the Company will be bound

by all actions taken by the Stockholder Representative in connection with this

Section 2.04. In performing its functions hereunder, the Stockholder

Representative will not be liable to the Company or the stockholders of the

Company in the absence of gross negligence or willful misconduct. The parties

further agree that neither Parent nor the Surviving Corporation shall owe any

indemnification obligation to the Stockholder Representative under this Section

2.04. Parent shall serve as representative of the Surviving Corporation (the

"Surviving Corporation Representative") for purposes of this Section 2.04 and

the Surviving Corporation will be bound by all actions taken by the Surviving

Corporation Representative in connection with this Section 2.04. In performing

its functions hereunder, the Surviving Corporation Representative will not be

liable to the Surviving Corporation or the stockholders of the Surviving

Corporation in the absence of gross negligence or willful misconduct. The

parties further agree that the Surviving Corporation shall not owe any

indemnification obligation to the Surviving Corporation Representative under

this Section 2.04.

(b) Not later than two (2) Business Days prior to the Closing Date, Company

management and Marc Reisch shall agree on a statement setting forth the

estimated Working Capital of the Company as of the Closing Date (but without

giving

<PAGE>

effect to the Closing) ("Estimated Working Capital"), prepared in good faith in

accordance with GAAP applied consistently with the Company's past practices (the

"Estimated Working Capital Statement"). In the event Company management and Marc

Reisch cannot agree, the Estimated Working Capital shall be the average of the

Estimated Working Capital as determined by Company management and as determined

by Marc Reisch and such average shall be reflected as the Estimated Working

Capital on the Estimated Working Capital Statement.

efforts to have prepared and delivered to the Stockholder Representative, within

30 days after the Closing Date, a statement setting forth the Closing Working

Capital (but without giving effect to the Closing) (the "Working Capital

Statement"), prepared in accordance with GAAP applied consistently with the

calculation and preparation of the Target Working Capital.

(d) On or prior to the fifth Business Day after receipt by the Stockholder

Representative of the Working Capital Statement (such five-Business Day period,

the "Objection Period"), the Stockholder Representative may give the Surviving

Corporation Representative a written notice (the "Objection Notice") stating in

reasonable detail its objections, if any, to the Working Capital Statement. Any

Objection Notice shall specify in reasonable detail the dollar amount and nature

of any objection and the basis therefor. Except to the extent the Stockholder

Representative makes a specific objection to a specific determination set forth

on the Working Capital Statement pursuant to the Objection Notice delivered to

the Surviving Corporation Representative within the Objection Period, the

Working Capital Statement will be conclusive and binding upon the parties

hereto.

(e) If the Stockholder Representative delivers a timely Objection Notice as

described in Section 2.04(c) above, then the Stockholder Representative and the

Surviving Corporation Representative will negotiate in good faith to resolve

their disputes regarding the Working Capital Statement. If the Stockholder

Representative and the Surviving Corporation Representative are unable to

resolve all disputes regarding the Working Capital Statement on or prior to the

tenth Business Day after the Surviving Corporation Representative's receipt of

the Objection Notice, then the Stockholder Representative and the Surviving

Corporation Representative will retain the New York City office of KPMG LLP or,

if KPMG LLP is unable or unwilling to participate, then such other independent

accounting firm as may be mutually agreed upon by the Surviving Corporation

Representative and the Stockholder Representative (KPMG LLP or such other

independent accounting firm, the "Independent Accounting Firm") to resolve the

dispute as soon as practicable, and in any event within 20 days. The Stockholder

Representative and the Surviving Corporation Representative shall provide the

Independent Accounting Firm with necessary documents as soon as possible after

its appointment, and the Independent Accounting Firm shall grant the Stockholder

Representative and the Surviving Corporation Representative the opportunity to

state their viewpoints. Upon request by the Stockholder Representative and the

Surviving Corporation Representative, there shall be a hearing before the

Independent Accounting Firm; provided, however that the Independent Accounting

Firm shall not decide any

<PAGE>

issues regarding the interpretation of this Agreement or the compliance of the

parties with their obligations under this Agreement, in particular, in

connection with this Section 2.04. The scope of the disputes to be resolved by

the Independent Public Accounting Firm shall be limited to whether the Closing

Working Capital as set forth on the Working Capital Statement was prepared in

accordance with GAAP and using accounting principles consistent with those used

in the determination of the Target Working Capital and whether there were errors

of fact or mathematical errors in the Working Capital Statement. The Independent

Accounting Firm shall render a written report as to the resolution of the

dispute and the resulting computation of Closing Working Capital. The Closing

Working Capital as determined by the Independent Accounting Firm will, absent

manifest error, be conclusive and binding upon the parties hereto and will

constitute the Closing Working Capital for all purposes of this Section 2.04. In

resolving any disputed item, the Independent Accounting Firm (x) shall be bound

by the provisions of this Section 2.04 and (y) may not assign a value to any

item greater than the greatest value for such item claimed by either party or

less than the smallest value for such item claimed by either party. The fees,

costs and expenses of the Independent Accounting Firm shall be borne by the

Surviving Corporation.

(f) If the Working Capital of the Company as of the Closing Date (as

finally determined pursuant to this Section 2.04, the "Closing Working Capital")

exceeds the Estimated Working Capital, the Surviving Corporation will pay, or

cause to be paid, in respect of each share of Company Preferred Stock that was

issued and outstanding immediately prior to the Effective Time, an amount equal

to (i) the amount of such excess plus the full amount of the Working Capital

Escrow Amount divided by (ii) the number of shares of Company Preferred Stock

(other than shares to be canceled in accordance with Section 2.01(b)) issued and

outstanding immediately prior to the Effective Time.

"Working Capital" means (i) accounts receivable, net inventories, prepaid

expenses and other current assets (but excluding cash, cash equivalents, other

short-term investments, income taxes receivable and deferred income taxes),

minus (ii) accounts payable and accrued expenses (other than income taxes

payable and deferred income taxes and accrued interest) and other current

liabilities (but excluding the current portion of long-term debt), determined in

accordance with GAAP and to the extent consistent with GAAP using the same

accounting methods, practices, principles, policies, and procedures, with

consistent classification, judgments and valuation and estimation methodologies

that were used in the preparation of the Target Working Capital.

(g) If the Closing Working Capital is less than the Estimated Working

Capital (the "WC Difference") the amount of the WC Difference shall reduce the

Working Capital Escrow Amount and such difference shall be paid by the escrow

agent out of the Working Capital Escrow Amount to the Surviving Corporation, and

if any amount is remaining in the Working Capital Escrow Account after payment

of the WC Difference to the Surviving Corporation, the escrow agent shall pay an

amount equal to (i) such remaining amount divided by (ii) the number of shares

of Company Preferred Stock (other than shares to be canceled in accordance with

Section 2.01(b)) issued and outstanding immediately prior to the Effective Time

in respect of each share of Company

<PAGE>

Preferred Stock. In no event shall the Merger Consideration be reduced by an

amount in excess of the Working Capital Escrow Amount.

(h) All payment under this Section 2.04 shall be made in immediately

available funds. No interest shall be payable with respect to the Working

Capital Escrow Amount or any other amounts payable pursuant to this Section

2.04.

(i) Any amount to be paid pursuant to this Section 2.04 will be treated as

an adjustment to the Merger Consideration for all purposes (including for Tax

purposes), unless a contrary treatment is required by applicable Law.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

Except as disclosed in the disclosure schedule delivered by the Company to

Parent prior to the execution of this Agreement (the "Company Disclosure

Schedule"), the Company represents and warrants to Parent and Merger Sub as

follows:

SECTION 3.01. Organization, Standing and Corporate Power. Each of the

Company and its Subsidiaries is a corporation or limited liability company, as

the case may be, duly organized, validly existing and in good standing under the

Laws of the jurisdiction in which it is incorporated or formed, as the case may

be, and has all requisite corporate or limited liability company, as the case

may be, power and authority to own, lease and operate its properties and assets

and to carry on its business as now being conducted. The Company and each of its

Subsidiaries is duly qualified to do business and in good standing in the

jurisdictions where the nature of the property owned or leased by it, or the

nature of the business conducted by it, makes such qualification necessary,

except where the failure to be so in good standing or to have such qualification

would not reasonably be likely to have a Material Adverse Effect. The Company

has made available, or will make available to Parent and Merger Sub prior to the

Closing Date, true and complete copies of (i) the certificates of incorporation

and by-laws (or equivalent governing instruments), as currently in effect, of

the Company and each Subsidiary, (ii) the minute books of the Company and, to

the extent in existence, each Subsidiary covering the period beginning no

earlier than January 1, 2001, and (iii) to the extent in the Company or any

Subsidiary's possession, stock certificate books and stock transfer ledgers of

the Company and its Subsidiaries since January 1, 2001.

SECTION 3.02. Capital Structure. The authorized capital stock of the

Company consists of 200,000 shares of Company Common Stock and 50,000 shares of

Company Preferred Stock. As of the date hereof, (a) 161,111.11 shares of Company

Common Stock are issued and outstanding, (b) no shares of Company Common Stock

are held by the Company in its treasury, (c) 16,500 shares of Company Common

Stock are reserved for issuance upon the exercise of outstanding options to

purchase shares of Company Common Stock granted under the Company Stock Plan

("Company Stock Options")), (d) 20,311.11 shares of Company Preferred Stock are

issued and outstanding and (e) no shares of Company Preferred Stock are held by

the Company in its treasury.

<PAGE>

Except as set forth above in this Section 3.02, as of the date hereof, no shares

of capital stock or other voting securities of the Company are issued, reserved

for issuance or outstanding. Section 3.02 of the Company Disclosure Schedule

sets forth a complete and accurate schedule, as of the date hereof, of all

holders of record of the issued and outstanding capital stock of the Company and

all holders of Company Stock Options and Warrants. Except as set forth above in

this Section 3.02, there are no authorized or outstanding stock appreciation

rights, phantom stock, profit participation rights, rights to receive shares of

Company Common Stock or Company Preferred Stock, as the case may be, on a

deferred basis or other rights that are linked to the value of Company Common

Stock or Company Preferred Stock, as the case may be, granted under the Company

Stock Plan or otherwise by the Company. There are no bonds, debentures, notes or

other indebtedness of the Company having the right to vote (or convertible into,

or exchangeable for, securities having the right to vote) on any matters on

which stockholders of the Company may vote. All outstanding shares of capital

stock of the Company: (i) have been duly authorized and validly issued; (ii) are

fully paid and non-assessable; and (iii) were not issued in violation of, or

subject to, any preemptive, subscription or other similar rights of any person.

Except as set forth above in this Section 3.02 or in Section 3.02 of the Company

Disclosure Schedule, (i) there are not issued, reserved for issuance or

outstanding as of the date hereof (A) any securities of the Company or any of

its Subsidiaries convertible into, exchangeable or exercisable for shares of

capital stock or equity securities of the Company or any of its Subsidiaries, or

(B) any subscriptions, warrants, calls, options, rights, commitments, proxies,

voting trusts, arrangements or undertakings of any kind to which the Company or

any of its Subsidiaries is a party or by which any of them is bound obligating

the Company or any of its Subsidiaries to issue, sell, transfer, redeem or

otherwise acquire, dispose or vote any shares of capital stock or other equity

securities of the Company or any of its Subsidiaries and (ii) the Company is not

a party to or bound by any agreement or commitment pursuant to which the Company

is or could be required to register any securities under the Securities Act.

SECTION 3.03. Authority; Noncontravention.

(a) The Company has all requisite corporate power and authority to execute

and deliver this Agreement, including the Stockholder Approval, and to

consummate the transactions contemplated by this Agreement. The execution and

delivery of this Agreement by the Company and the consummation by the Company of

the transactions contemplated by this Agreement have been duly and validly

authorized by all necessary corporate action on the part of the Company, and no

other corporate proceedings on the part of the Company are necessary to

authorize this Agreement or to consummate the transactions contemplated hereby.

This Agreement has been duly executed and delivered by the Company and, assuming

the due authorization, execution and delivery by each of the other parties

hereto, constitutes a legal, 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 affecting

creditors' rights generally and general equitable principles (regardless of

whether such enforceability is considered in a proceeding in equity or at law)).

<PAGE>

(b) The execution, performance and delivery of this Agreement do not, and

the consummation of the Merger and the other transactions contemplated by this

Agreement and compliance with the provisions of this Agreement will not, require

any consent, approval or notice under, conflict with, or result in any

violation, termination, suspension or breach of, or default (with or without

notice or lapse of time or both) under, or give rise to a right of termination,

suspension, cancellation or acceleration of any obligation or to the loss of a

benefit under, (i) the Company's Certificate of Incorporation, as amended (the

"Company Certificate"), the Company's By-laws, as amended (the "Company

By-laws"), or the organizational documents of any Subsidiary, (ii) except as set

forth in Section 3.03 of the Company Disclosure Schedule, any Contract to which

the Company or any of its Subsidiaries is a party or (iii) subject to the

governmental filings and other matters referred to in Section 3.04, any statute,

law, rule, regulation, order or ordinance of any Governmental Authority

(collectively, "Laws") applicable to the Company or any of its Subsidiaries,

other than, in the case of clauses (ii) and (iii), with respect to matters that

are not reasonably likely to (A) result in a Material Adverse Effect, (B) impair

the ability of the Company to perform its obligations under this Agreement in

any material respect or (C) delay in any material respect or prevent the

consummation of any of the transactions contemplated by this Agreement.

SECTION 3.04. Governmental Approvals. No consent, approval, order or

authorization of, action by or in respect of, or registration, declaration or

filing with, any Governmental Authority 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

Merger or the other transactions contemplated by this Agreement, except for (a)

the filing of a premerger notification and report form by the Company, and the

expiration or termination of all waiting periods, under the Hart-Scott-Rodino

Antitrust Improvements Act of 1976, as amended, and the regulations promulgated

thereunder (the "HSR Act"), or any other applicable filings and approvals under

similar foreign antitrust Laws, (b) 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 is qualified to do

business, (c) such filings as may be required by applicable state securities or

"blue sky" laws or state takeover laws, (d) consents, approvals, authorizations,

declarations or filings set forth in Section 3.04 of the Company Disclosure

Schedule and (e) consents, approvals, orders, authorizations, actions,

registrations, declarations or filings that, if not obtained or made, would not

reasonably be expected to (A) result in a Material Adverse Effect, (B) impair

the ability of the Company to perform its obligations under this Agreement in

any material respect or (C) delay in any material respect or prevent the

consummation of any of the transactions contemplated by this Agreement.

SECTION 3.05. Litigation. Except as set forth in the SEC Reports filed

prior to the date hereof, or in Section 3.05 of the Company Disclosure Schedule:

(i) there is no claim, suit, action, arbitration, investigation or proceeding

pending or, to the Knowledge of the Company, threatened against the Company or

any of its Subsidiaries which if adversely determined would, individually or in

the aggregate, reasonably be expected to result in damages payable by the

Company or any Subsidiary in excess of $250,000 or injunctive relief against the

Company or any of its Subsidiaries, or that

<PAGE>

would materially and adversely affect the ability of the Company to consummate

the transactions contemplated hereby or which seeks to enjoin the consummation

of the transactions contemplated hereby; and (ii) there is no judgment, decree,

award, injunction, rule or order of any Governmental Authority or arbitrator

outstanding against the Company or any of its Subsidiaries that would reasonably

be expected to materially and adversely affect the ability of the Company to

consummate the transactions contemplated hereby.

SECTION 3.06. Compliance with Laws; Permits.

(a) Except as set forth in Section 3.06(a) of the Company Disclosure

Schedule, the conduct of the business by the Company and each of its

Subsidiaries since January 1, 2001 has not violated or breached and does not

currently violate or breach (and no event has occurred which with notice or the

lapse of time, or both, would constitute a violation or breach of) any Laws

applicable to the Company or any of its Subsidiaries, their respective

properties or other assets, except for violations and breaches which have not

given and would not reasonably be expected to give rise to a material liability.

Except as set forth in the SEC Reports filed prior to the date hereof or as set

forth in Section 3.06(a) of the Company Disclosure Schedule, there are no

unresolved notices of deficiency or charges of violation with respect to the

matters covered by this Section 3.06(a) brought or, to the Knowledge of the

Company, threatened or pending against the Company which have given or would

reasonably be expected to give rise to a material liability.

(b) Except as disclosed in Section 3.06(b) of the Company Disclosure

Schedule, each of the Company and its Subsidiaries have obtained all permits,

licenses, authorizations, grants, consents, certificates, registrations,

qualifications, variances, exemptions, orders, franchises, exceptions,

identification and registration numbers, approvals or orders of any Governmental

Authority necessary to own, lease and to operate its properties or otherwise to

carry on each of their respective businesses as it is now being conducted

(collectively, the "Permits"), except those the absence of which has not

materially impaired and would not reasonably be expected to materially impair

the ability of the Company and its Subsidiaries to conduct their businesses as

currently conducted. Neither the Company nor any of its Subsidiaries has

received any notice or claim pertaining to the failure to obtain any Permit,

except for any such notice or claim that has not given and would not reasonably

be expected to give rise to a material liability.

SECTION 3.07. Affiliate Transactions. Except as disclosed in the SEC

Reports filed prior to the date hereof or as set forth in Section 3.07 of the

Company Disclosure Schedule, none of the Company or any of its Subsidiaries is a

party to any Contract with any (i) officer, director or employee of the Company

or any of its Subsidiaries, (ii) record or beneficial owner of five percent or

more of the capital stock of the Company, or (iii) affiliate of any such

officer, director or record or beneficial owner of the Company (each, an

"Affiliate Agreement"), except any transaction on arm's length terms and in the

ordinary course of business consistent with past practice with respect to the

officers and directors of the Company and its Subsidiaries, including the

payment of

<PAGE>

customary directors fees and expenses. Except as described in Section 3.07 of

the Company Disclosure Schedule, neither the Company nor any Subsidiary has any

loans receivable from any affiliate of the Company or from any director, officer

or employee of the Company or any Subsidiary.

SECTION 3.08. Subsidiaries.

(a) Except as set forth in the SEC Reports filed prior to the date hereof

or Section 3.08 of the Company Disclosure Schedule, the Company does not own,

directly or indirectly, any shares of capital stock or any other equity interest

in any person, domestic or foreign.

(b) All of the outstanding shares of capital stock or equity interests of

each of its Subsidiaries that are owned by the Company or any other Subsidiary

of the Company (collectively, the "Subsidiary Shares") have been duly authorized

and are validly issued, fully paid and non-assessable and were not issued in

violation of any preemptive rights or comparable rights. There are no

irrevocable proxies or similar obligations with respect to any of the Subsidiary

Shares. There are no securities convertible into, exchangeable for, or carrying

the right to acquire, equity securities (or securities convertible into or

exchangeable for equity securities) of any of its Subsidiaries, or

subscriptions, warrants, options, calls, convertible securities, registration or

other rights or other arrangements or commitments obligating any Subsidiary to

issue, transfer or dispose of any of its equity securities or any ownership

interest therein.

the Company owns the Subsidiary Shares free and clear of any Liens. Except as

disclosed in Section 3.08 of the Company Disclosure Schedule, the Company owns

and has full voting power over all of the equity interests of each of its

Subsidiaries. No stock appreciation rights, phantom stock, profit participation

or other similar rights with respect to any Subsidiary or any capital stock of

any Subsidiary are authorized or outstanding.

SECTION 3.09. No Brokers. Except as set forth in Section 3.09 of the

Company Disclosure Schedule, neither the Company nor any of its officers or

directors has employed any investment banker, business consultant, financial

advisor, broker or finder in connection with the transactions contemplated by

this Agreement, or obligated the Company or any of the Subsidiaries to pay any

investment banking, business consultancy, financial advisory, brokerage or

finders' fees or commissions in connection with the transactions contemplated

hereby. The amount of such fees payable pursuant to the items listed in Section

3.09 of the Company Disclosure Schedule and the terms related thereto have been

previously and accurately disclosed in writing to Parent.

SECTION 3.10. SEC Reports; Financial Statements.

(a) The Company and its Subsidiaries have filed with the U.S. Securities

and Exchange Commission (the "SEC") all periodic reports required to be filed by

the Company or any Subsidiary with the SEC from and after January 1, 2001

<PAGE>

(collectively, and in each case including all exhibits and schedules thereto and

documents incorporated by reference therein, the "SEC Reports"). As of its date

of filing, each SEC Report complied in all material respects with applicable

requirements of the Exchange Act and the rules and regulations promulgated

thereunder, and none of such SEC Reports contained any untrue statement of a

material fact or omitted to state a material fact required or necessary to make

the statements made therein, in light of the circumstances under which they were

made, not misleading.

(b) Each of the consolidated financial statements (including the notes

thereto) included in the SEC Reports filed prior to the date hereof (the

"Financial Statements"): (i) complied as to form in all material respects with

applicable accounting requirements and the published rules and regulations of

the SEC with respect thereto, (ii) were prepared in accordance with GAAP on a

consistent basis during the periods involved (except as may be indicated in the

notes thereto); and (iii) present fairly in all material respects, as of its

respective date and for the period set forth therein, the consolidated financial

position, results of operations or cash flows, as the case may be, of the

Company and its Subsidiaries (subject, in the case of unaudited interim

financial statements, to exceptions permitted by Form 10-Q under the Exchange

Act).

SECTION 3.11. Undisclosed Liabilities. Except for the liabilities (i) set

forth on, reflected in, reserved against or otherwise described in the most

recent Financial Statements (ii) set forth in Section 3.11 of the Company

Disclosure Schedule or (iii) liabilities incurred in the ordinary course of

business consistent with past practice since December 31, 2003 or as

contemplated by this Agreement, neither the Company nor any Subsidiary has any

material indebtedness, obligation or liability of any kind, whether absolute,

accrued, contingent or otherwise and whether due or to become due, that would be

required to be reflected on a balance sheet prepared in accordance with GAAP

consistently applied in order for such balance sheet to present fairly in all

material respects the consolidated financial position of the Company and its

Subsidiaries.

SECTION 3.12. Intellectual Property. Except as set

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