AGREEMENT AND PLAN OF MERGER dated as of August 2, 2005 by and among CHART INDUSTRIES, INC., CERTAIN OF ITS STOCKHOLDERS, FIRST RESERVE FUND X, L.P. And CI ACQUISITION, INC.

 

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the product of (x) the Per Share Purchase Price, multiplied by (y) the number of Top-Up Shares to be purchased by Merger Subsidiary pursuant to this SECTION 2.01(e).

          SECTION 2.02 Conversion of Shares. At the Effective Time and by virtue of the Merger and without any action on the part of the holders of Shares or shares of the capital stock of Merger Subsidiary:

          (a) Each share of capital stock of the Company held by the Company as treasury stock or owned by Buyer, Merger Subsidiary or any subsidiary of either of them immediately prior to the Effective Time, including without limitation all Shares acquired in the Stock Purchase and all Top-Up Shares acquired pursuant to SECTION 2.01(e), shall be canceled, and no payment shall be made with respect thereto;

          (b) Each share of capital stock of Merger Subsidiary outstanding immediately prior to the Effective Time shall be converted into and become one share of capital stock of the Surviving Corporation with the same rights and privileges as the shares so converted and shall constitute the only outstanding shares of capital stock of the Surviving Corporation; and

          (c) Each Share outstanding immediately prior to the Effective Time shall, except as otherwise provided in clause (a) above or as provided in SECTION 2.04 with respect to Shares as to which appraisal rights have been exercised, be converted into the right to receive the Per Share Purchase Price or, if greater, the price per Share paid in the Stock Purchase, in cash without interest (the “Merger Consideration”). As of the Effective Time, all such Shares shall no longer be outstanding and shall automatically be canceled and retired and shall cease to exist, and each holder of a certificate representing any such Shares shall cease to have any rights with respect thereto, except the right to receive upon the surrender of such certificates, the Merger Consideration.

          SECTION 2.03 Exchange of Shares.

          (a) Prior to the Effective Time, Buyer shall appoint an agent (the “Exchange Agent”) reasonably acceptable to the Company for the purposes of exchanging certificates representing Shares for the Merger Consideration in accordance with this SECTION 2.03 and exchanging certificates representing certain Warrants for Warrant Consideration in accordance with SECTION 2.06. Buyer will, at the Effective Time, deposit with the Exchange Agent, the full amount of the Merger Consideration to be paid in respect of Shares. For purposes of determining the Merger Consideration to be so deposited, Buyer shall assume that no stockholder of the Company will perfect his right to appraisal of his, her or its Shares. Promptly after the Effective Time, Buyer will send, or will cause the Exchange Agent to send, to each holder of Shares at the Effective Time a letter of transmittal and related instructions for use in such exchange.

          (b) Each holder of Shares that have been converted into a right to receive the Merger Consideration, upon surrender to the Exchange Agent of a certificate or certificates representing such Shares (or evidence of loss in lieu thereof), together with a properly completed letter of transmittal covering such Shares, will be entitled to receive the Merger Consideration payable in respect of such Shares and the certificate or certificates so surrendered shall forthwith

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be cancelled; provided that in no event will a holder of a certificate or certificates be entitled to receive the Merger Consideration if the Merger Consideration was already paid with respect to the Shares underlying such certificate or certificates in connection with an affidavit of loss. Until so surrendered, each such certificate shall, after the Effective Time, represent for all purposes only the right to receive such Merger Consideration.

          (c) If any portion of the Merger Consideration payable in respect of any Share is to be paid to a person other than the registered holder of the Shares represented by the certificate or certificates surrendered, it shall be a condition to such payment that the certificate or certificates so surrendered shall be properly endorsed or otherwise be in proper form for transfer and that the person requesting such payment shall pay to the Exchange Agent any transfer or other taxes required as a result of such payment to a person other than the registered holder of such Shares or establish to the satisfaction of the Exchange Agent that such tax has been paid or is not payable.

          (d) After the Effective Time, there shall be no further registration of transfers of Shares outstanding immediately prior to the Effective Time.

          (e) Any portion of the Merger Consideration made available to the Exchange Agent pursuant to SECTION 2.03(a) that remains unclaimed by the holders of Shares entitled thereto six months after the Effective Time shall be returned to Buyer, upon demand, and any stockholder of the Company who has not exchanged his Shares for the Merger Consideration in accordance with this SECTION 2.03 prior to that time shall thereafter look only to Buyer for payment of the Merger Consideration in respect of his Shares. None of Buyer, Merger Subsidiary or the Company shall be liable to any holder of the Shares for any Merger Consideration delivered to a public official pursuant to any applicable abandoned property, escheat or similar law.

          (f) Any portion of the Merger Consideration made available to the Exchange Agent pursuant to SECTION 2.03(a) to pay for Shares for which appraisal rights shall have been perfected shall be returned to Buyer, upon demand.

          (g) In the event that any certificate representing Shares 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 Buyer, the posting by such person of a bond in such reasonable amount as Buyer may direct as indemnity against any claim that may be made against it with respect to such certificate (provided that, if such person is a financial institution or other institutional investor, its own agreement shall be satisfactory), the Exchange Agent will issue in exchange for such lost, stolen or destroyed certificate the Merger Consideration with respect to such certificate, to which such person is entitled pursuant hereto.

          SECTION 2.04 Dissenting Shares. Notwithstanding SECTION 2.02, Shares outstanding immediately prior to the Effective Time and held by a holder who has not voted in favor of the Merger or consented thereto in writing, if any such vote or consent is required, and who has demanded appraisal for such Shares in accordance with the DGCL (“Dissenting Shares”) shall not be converted into a right to receive the Merger Consideration, unless such holder fails to perfect or withdraws or otherwise loses his right to appraisal. At the

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Company Stock Option that was granted with an exercise price per share less than the per share fair market value of the Shares underlying such Company Stock Option on the grant date thereof (each a “Discount Option”), and which remains outstanding as of immediately prior to the Effective Time, adjusted into a Rollover Option in accordance with the terms of the Plans and SECTION 2.05(c) below, then immediately prior to the Effective Time, such Discount Option shall be modified in accordance with Internal Revenue Service Notice 2005-1, Q&A 18(d) (any Discount Option so modified is referred to herein as a “Replacement Option”) by increasing the aggregate exercise price of such Discount Option by an amount equal to the excess of (A) the aggregate fair market value of the Shares underlying such Discount Option on the grant date thereof over (B) the aggregate exercise price of such Discount Options on the grant date thereof (such excess, the “Aggregate Original Option Spread”). Prior to the Effective Time, the Company shall take all action necessary to effect the foregoing.

          (c) The adjustment of any Company Stock Option(s) (or portions thereof) (including any Replacement Option(s)) into a Rollover Option shall be effected in a manner such that: (i) the excess of the aggregate fair market value of the shares of common stock of the Surviving Corporation subject to such Rollover Option immediately following such adjustment over the aggregate exercise price of such Rollover Option immediately following such adjustment shall be equal to the aggregate amount of cash to which the holder of such corresponding Company Stock Option(s) (or portions thereof) would have been entitled pursuant to SECTION 2.05(a) (before any reduction for withholding taxes) in respect of such Company Stock Option(s) (or portions thereof) had such Company Stock Option(s) (or portions thereof) been cancelled in accordance with such section (for the avoidance of doubt, with respect to any Replacement Option(s), the “aggregate amount of cash to which the holder of such corresponding Company Stock Option(s) (or portions thereof) would have been entitled pursuant to SECTION 2.05(a)” shall be determined after giving effect to the increase in the exercise price of such Replacement Option(s) pursuant to the proviso in SECTION 2.05(b) above); and (ii) all of the other requirements of Internal Revenue Service Notice 2005-1, and Treasury Regulation Section 1.424-1, as modified by Internal Revenue Service Notice 2005-1, Q&A 4(d), are intended to be satisfied.

          (d) Each Eligible Optionee who holds a Discount Option that the Committee has elected to adjust into a Rollover Option in accordance with SECTION 2.05(b) shall be entitled to receive an amount in cash from the Company at the Merger Closing, and the Company shall, and Buyer shall take all actions necessary or advisable to enable and cause the Company to, pay an amount in cash at the Merger Closing to such Eligible Optionee, equal to the Aggregate Original Option Spread for such Discount Option, less any required withholding taxes. Prior to the Effective Time, the Company shall take all action necessary to effect the foregoing.

          SECTION 2.06 Warrants.

          (a) At the Effective Time, each warrant issued pursuant to that certain Warrant Agreement (the “Warrant Agreement”), dated September 15, 2003, between the Company and National City Bank, as Warrant Agent (the “Warrants”), that is outstanding immediately prior to the Effective Time shall be canceled in the Merger. Thereafter, no holder of any such Warrant shall have any rights in respect thereof, other than the right to receive

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therefor in accordance with this SECTION 2.06 an amount in cash equal to the product of (i) the number of Shares issuable upon the exercise of such Warrant as of immediately prior to the Effective Time (assuming, for this purpose, that such Warrant is exercised for cash) and (ii) the excess, if any, of the Merger Consideration over the exercise price per Share under such Warrant (the “Warrant Consideration”). Prior to the Effective Time, the Company shall take all actions necessary to effect the foregoing.

          (b) Buyer will, at the Effective Time, deposit with the Exchange Agent, the full amount of the Warrant Consideration to be paid in respect of the Warrants. Promptly after the Effective Time, Buyer will send, or will cause the Exchange Agent to send, to each holder of Warrants at the Effective Time a letter of transmittal and related instructions for the exchange of certificates representing Warrants for the Warrant Consideration payable in respect thereof. Each holder of Warrants, upon surrender to the Exchange Agent of a certificate or certificates representing such Warrants (or evidence of loss in lieu thereof), together with a properly completed letter of transmittal covering such Warrants, will be entitled to receive the Warrant Consideration payable in respect of such Warrants, and the certificate or certificates so surrendered shall forthwith be cancelled; provided that in no event will a holder of a certificate or certificates representing Warrants be entitled to receive the Warrant Consideration if the Warrant Consideration was already paid with respect to the Warrants underlying such certificate or certificates in connection with an affidavit of loss. Until so surrendered, each such certificate shall, after the Effective Time, represent for all purposes only the right to receive such Warrant Consideration.

          (c) If any portion of the Warrant Consideration payable in respect of any Warrant is to be paid to a person other than the registered holder of the Warrant represented by the certificate or certificates surrendered, it shall be a condition to such payment that the certificate or certificates so surrendered shall be properly endorsed or otherwise be in proper form for transfer and that the person requesting such payment shall pay to the Exchange Agent any transfer or other taxes required as a result of such payment to a person other than the registered holder of such Warrants or establish to the satisfaction of the Exchange Agent that such tax has been paid or is not payable.

          (d) After the Effective Time, there shall be no further registration of transfers of Warrants outstanding immediately prior to the Effective Time.

          (e) Any portion of the Warrant Consideration made available to the Exchange Agent pursuant to SECTION 2.06(b) that remains unclaimed by the holders of Warrants entitled thereto six months after the Effective Time shall be returned to Buyer, upon demand, and any warrantholder of the Company who has not exchanged his Warrants for the Warrant Consideration in accordance with this SECTION 2.06 prior to that time shall thereafter look only to Buyer for payment of the Warrant Consideration in respect of his Warrants. None of Buyer, Merger Subsidiary or the Company shall be liable to any holder of the Warrants for any Warrant Consideration delivered to a public official pursuant to any applicable abandoned property, escheat or similar law.

          (f) In the event that any certificate representing Warrants shall have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming such

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certificate to be lost, stolen or destroyed and, if required by Buyer, the posting by such person of a bond in such reasonable amount as Buyer may direct as indemnity against any claim that may be made against it with respect to such certificate (provided that, if such person is a financial institution or other institutional investor, its own agreement shall be satisfactory), the Exchange Agent will issue in exchange for such lost, stolen or destroyed certificate the Warrant Consideration with respect to such certificate, to which such person is entitled pursuant hereto.

ARTICLE III

THE SURVIVING CORPORATION

          SECTION 3.01 Certificate of Incorporation. The Certificate of Incorporation of the Company in effect at the Effective Time shall be the Certificate of Incorporation of the Surviving Corporation until amended in accordance with applicable law.

          SECTION 3.02 Bylaws. The Bylaws of the Company in effect at the Effective Time shall be the Bylaws of the Surviving Corporation until amended in accordance with applicable law.

          SECTION 3.03 Directors and Officers. From and after the Effective Time, until successors are duly elected or appointed in accordance with applicable law, (i) the directors of Merger Subsidiary at the Effective Time shall constitute the directors of the Surviving Corporation, until the earlier of their resignation or removal, and (ii) the officers of the Company at the Effective Time shall be the officers of the Surviving Corporation until the earlier of their resignation or removal.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

          Except as set forth in the Company Disclosure Schedule delivered by the Company to Buyer at or prior to the execution of this Agreement (the “Company Disclosure Schedule”) or as expressly disclosed in the Company SEC Reports filed with SEC prior to the date hereof, the Company represents and warrants to Buyer and Merger Subsidiary that:

          SECTION 4.01 Organization and Qualification; Subsidiaries.

          (a) Each of the Company and each Material Subsidiary is a corporation, limited liability company, partnership or other legal entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization and has the requisite power and authority and all necessary governmental approvals to own, lease and operate its properties and to carry on its business as it is now being conducted, except where the

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failure to be so organized, existing or in good standing or to have such power, authority and governmental approvals would not, individually or in the aggregate, have a Company Material Adverse Effect. The Company and each Material Subsidiary are duly qualified or licensed as foreign corporations to do business, and are in good standing, in each jurisdiction where the character of the properties owned, leased or operated by them or the nature of their business makes such qualification or licensing necessary, except for such failures to be so qualified or licensed and in good standing that would not, individually or in the aggregate, have a Company Material Adverse Effect. The term “Company Material Adverse Effect” means any change, condition, circumstance or effect that is, or is reasonably likely to be, materially adverse to the assets and liabilities (taken together), business, financial condition or results of operations of the Company and the Company Subsidiaries, taken as a whole (other than changes, conditions, circumstances or effects that are the result of (i) economic factors affecting the economy or financial markets as a whole or generally affecting any of the industries and markets in which the Company or any of the Company Subsidiaries operates, (ii) natural disasters, acts of war, sabotage or terrorism, military actions or the escalation thereof, (iii) any change in applicable laws, rules or regulations or accounting rules or (iv) actions contemplated by the parties in connection with this Agreement or the announcement or performance of this Agreement, except that the exclusions set forth in clauses (i), (ii) and (iii) shall only be effective if the Company and the Company Subsidiaries, taken as a whole, are not substantially, disproportionately impacted in financial terms by such events when compared to other companies in the industries in which the Company and the Company Subsidiaries operate).

          (b) For purposes hereof, “Material Subsidiary” means a subsidiary (as defined in Rule 1-02 of Regulation S-X of the United States Securities and Exchange Commission (the “SEC”)) of the Company (a “Company Subsidiary”) that constitutes a “significant subsidiary” of the Company within the meaning of Rule 1-02 of Regulation S-X of the SEC.

          SECTION 4.02 Certificate of Incorporation and Bylaws. The Company has heretofore made available to Buyer a complete and correct copy of the Certificate of Incorporation and the Bylaws or equivalent organizational documents, each as amended to date, of the Company and each Company Subsidiary. Such Certificates of Incorporation, Bylaws and equivalent organizational documents are in full force and effect.

          SECTION 4.03 Capitalization. The authorized capital stock of the Company consists of 9,500,000 Shares and 500,000 shares of preferred stock, par value $0.01 per share (the “Preferred Stock”). As of July 18, 2005, (a) 5,360,409 Shares were outstanding and (b) no shares of Preferred Stock were outstanding. All outstanding shares of capital stock of the Company have been duly authorized and validly issued and are fully paid and nonassessable. As of July 18, 2005, Warrants to purchase 249,983 Shares were outstanding at an exercise price of $32.97 per Share (subject to adjustment). SECTION 4.03 of the Company Disclosure Schedule contains a true and complete list of all outstanding Company Stock Options as of the date hereof, the exercise price for each such Company Stock Option as of the date hereof and the holders of each such Company Stock Option as of the date hereof. As of March 31, 2005, 729,080 Shares were reserved for issuance upon the exercise of outstanding Company Stock Options and Warrants, which consisted of (i) Company Stock Options to purchase 477,701 Shares at a weighted average exercise price of $18.18 per Share (subject to

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adjustment) and (ii) Warrants to purchase 251,379 Shares at an exercise price of $32.97 per Share (subject to adjustment) pursuant to the Warrant Agreement, and, except for such Company Stock Options and Warrants, no preemptive rights, conversion rights, stock appreciation rights, redemption rights, repurchase rights options, warrants or other rights, agreements, arrangements or commitments of any character obligating the Company or any Company Subsidiary to issue or sell, or to cause to be issued or sold, any shares of capital stock of, other equity interests in, or rights to acquire equity interests in, the Company or any Material Subsidiary were outstanding. Other than with respect to the Company Subsidiaries listed on SECTION 4.03 of the Company Disclosure Schedule, the Company does not directly or indirectly own any securities or other beneficial ownership interests in any other entity (including through joint ventures or partnership arrangements) representing more than 5% of the beneficial ownership interests of such entity, or have any similar equity investment in any other person. There are no material outstanding contractual obligations of the Company or any Company Subsidiary to repurchase, redeem or otherwise acquire any Shares or any capital stock of any Material Subsidiary, or to make any investment (in the form of a loan, capital contribution or otherwise) in any Company Subsidiary. Each outstanding share of capital stock or other equity interest of each Company Subsidiary is validly issued and, with respect to each outstanding share of capital stock of any Company Subsidiary that is a domestic corporation, fully paid, and each such share owned by the Company or another Company Subsidiary is free and clear of all security interests, liens, claims, pledges, options, rights of first refusal, agreements imposing restrictions on assets, limitations on the Company’s or such other Company Subsidiary’s voting rights, charges and other encumbrances of any nature whatsoever (“Encumbrances”) other than any such encumbrances imposed by applicable law (including securities laws). Except as otherwise expressly contemplated by SECTION 2.05 hereof, following the consummation of the Merger, there will not be outstanding any rights, warrants, options or other securities entitling the holder thereof to purchase, acquire or otherwise receive any shares of the capital stock of the Company or any of the Company Subsidiaries (or any other securities exercisable for or convertible into such shares). Neither the Company nor any of the Company Subsidiaries has outstanding any bonds, debentures, notes or other obligations the holders of which have the right to vote (or are convertible into or exercisable for securities having the right to vote) with the stockholders of the Company or any Company Subsidiary on any matter or any agreements with respect to which Company stockholders, as such, have the right to vote.

          SECTION 4.04 Authority Relative to this Agreement. The Company has all necessary power and authority to execute and deliver this Agreement, to perform its obligations hereunder and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement by the Company and the consummation by the Company of the transactions contemplated hereby have been duly and validly authorized by all necessary corporate action, and no other corporate proceedings on the part of the Company are necessary to authorize this Agreement or to consummate the transactions contemplated herein (other than, with respect to the Merger, the approval and adoption of this Agreement by the holders of a majority of the then outstanding Shares and the filing and recordation of appropriate merger documents as required by the DGCL). This Agreement has been duly and validly executed and delivered by the Company and, assuming the due authorization, execution and delivery by Buyer, constitutes a legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, subject to the effect of any applicable bankruptcy, reorganization, insolvency, moratorium or similar laws affecting creditors rights generally and to

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the effect of general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).

          SECTION 4.05 No Conflict; Required Filings and Consents.

          (a) The execution and delivery of this Agreement by the Company do not, and the performance of the transactions contemplated herein by the Company will not, (i) conflict with or violate the Certificate of Incorporation or Bylaws or equivalent organizational documents of the Company or any Company Subsidiary, (ii) conflict with or violate any law, rule, regulation, order, judgment or decree applicable to the Company or any Company Subsidiary or by which any property or asset of the Company or any Company Subsidiary is bound or affected, or (iii) result in any breach of or constitute a default (or an event which with notice or lapse of time or both would become a default) under, result in the loss of a material benefit under, or give to others any right of termination, amendment, acceleration or cancellation of, or result in the creation of an Encumbrance on any property or asset of the Company or Company Subsidiary pursuant to, any note, bond, mortgage, indenture, contract, agreement, lease, license, permit, franchise or other instrument or obligation to which the Company or such Company Subsidiary is a party or by which the Company or such Company Subsidiary or any property or asset of the Company or such Company Subsidiary is bound or affected, except, in the case of clauses (ii) and (iii) above, for any such conflicts, violations, breaches, defaults or other occurrences which would not prevent or delay consummation of the Merger in any material respect, or otherwise prevent the Company from performing its obligations under this Agreement in any material respect, or would not, individually or in the aggregate, have a Company Material Adverse Effect (provided that, for purposes of this SECTION 4.05(a), the definition of Company Material Adverse Effect shall not include the exclusion in clause (iv) thereof).

          (b) The execution and delivery of this Agreement by the Company do not, and the performance of this Agreement by the Company will not, require any consent, approval, authorization or permit of, or filing with or notification to, any governmental or regulatory authority, domestic or foreign (each a “Governmental Entity”), except (i) for (A) applicable requirements, if any, of the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder (the “Exchange Act”), the Securities Act of 1933, as amended (the “Securities Act”), state securities or “blue sky” laws (“Blue Sky Laws”) and state takeover laws, (B) the pre-merger notification requirements of the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as amended, and the rules and regulations thereunder (the “HSR Act”), (C) filing and recordation of appropriate merger documents as required by the DGCL and (D) applicable requirements, if any, of any non-United States competition, antitrust and investment laws and (ii) where failure to obtain such consents, approvals, authorizations or permits, or to make such filings or notifications, would not prevent or delay consummation of the Merger in any material respect, or otherwise prevent the Company from performing its obligations under this Agreement in any material respect, or would not, individually or in the aggregate, have a Company Material Adverse Effect (provided that, for purposes of this SECTION 4.05(b), the definition of Company Material Adverse Effect shall not include the exclusion in clause (iv) thereof).

          SECTION 4.06 Compliance.

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furnished to the SEC and not deemed to be “filed” for purposes of Section 18 of the Exchange Act) was prepared in accordance with U.S. generally accepted accounting principles applied on a consistent basis throughout the periods indicated (“GAAP”) (except as may be indicated in the notes thereto) and each fairly presented the financial position, results of operations and cash flows of the Company and the consolidated Company Subsidiaries, as the case may be, at the respective dates thereof and for the respective periods indicated therein (subject, in the case of unaudited statements, to year-end adjustments which were not and are not expected, individually or in the aggregate, to be material in amount and the absence in such unaudited statements of certain footnote disclosures).

          (c) Except for (i) liabilities recorded or disclosed in the consolidated financial statements or the notes thereto contained in the Company SEC Reports, (ii) liabilities that were not required to be disclosed in such consolidated financial statements or the notes thereto pursuant to GAAP, (iii) liabilities or obligations incurred in the ordinary course of business consistent with past practices since March 31, 2005, (iv) liabilities or obligations incurred pursuant to the transactions contemplated by this Agreement and/or (v) liabilities or obligations that have been discharged or paid in full prior to the date of this Agreement, there are no material liabilities or obligations of the Company or any of the Company Subsidiaries of any kind whatsoever, whether accrued, contingent, absolute, determined or otherwise.

          (d) Since the enactment of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 (the “▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act”), the Company has been and is in compliance in all material respects with the applicable provisions of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act and the rules and regulations promulgated thereunder applicable to the Company.

          SECTION 4.08 Brokers. Except for UBS Securities LLC (“UBS”) whose fees will be paid by the Company, there is no investment banker, broker or finder which has been retained by or is authorized to act on behalf of the Company or any Company Subsidiary who might be entitled to any fee or commission from the Company, any Company Subsidiary, Merger Subsidiary or Buyer or any of their affiliates upon consummation of the transactions contemplated by this Agreement.

          SECTION 4.09 Events Subsequent to Most Recent Fiscal Quarter End. Since March 31, 2005, there has not been any adverse change in the financial condition of the Company and the Material Subsidiaries taken as a whole which would constitute a Company Material Adverse Effect or any action by the Company or a Company Subsidiary that would have required Buyer’s consent pursuant to SECTION 6.01 had such action been taken after the date hereof.

          SECTION 4.10 Tax Matters. (i) The Company and its Material Subsidiaries have duly and timely filed (taking into account any extension of time within which to file) all material Tax Returns required to be filed by any of them and all such filed Tax Returns are complete and accurate in all material respects; (ii) the Company and its Material Subsidiaries have paid all Taxes due and payable or that the Company or any Material Subsidiary is obligated to withhold from amounts owing to any employee, creditor or third party, except with respect to matters contested in good faith and for which adequate reserves have been provided in accordance with GAAP or for such amounts that, individually or in the aggregate,

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could not reasonably be expected to have a Company Material Adverse Effect; (iii) as of the date of this Agreement, there are no pending or, to the knowledge of the Company, threatened in writing audits, examinations, investigations or other proceedings in respect of Taxes or Tax matters relating to the Company or any Material Subsidiary which, if determined adversely to the Company or such Material Subsidiary, could reasonably be expected to have a Company Material Adverse Effect; (iv) there are no deficiencies or claims for any Taxes that have been proposed, asserted or assessed against the Company or any Material Subsidiary, which if such deficiencies or claims were finally resolved against the Company or such Material Subsidiary, could reasonably be expected to have a Company Material Adverse Effect; (v) there are no material liens or claims for Taxes upon the assets of the Company or any Material Subsidiary, other than liens or claims for current Taxes not yet due and payable and liens or claims for Taxes that are being contested in good faith by appropriate proceedings and for which adequate reserves have been provided in accordance with GAAP; (vi) the Company has made available to the Buyer (1) all material Tax Returns filed by or on behalf of the Company or any Material Subsidiary for all completed Tax years that remain open for audit or review by the relevant Tax Authority and (2) all material ruling requests, private letter rulings, notices of proposed deficiencies, closing agreements and settlement agreements, and any similar documents or communications sent or received by the Company or any Material Subsidiary relating to Taxes, to the extent still pending or in effect; (vii) the Company and the Company Subsidiaries have not incurred any material liability for Taxes from and after September 15, 2003 other than Taxes incurred in the ordinary course of business consistent with past practices; (viii) neither the Company nor any Material Subsidiary has made an election under Section 341(f) of the Internal Revenue Code of 1986, as amended (the “Code”); (ix) neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated hereby will result in the Company and the Company Subsidiaries incurring any material liability to make or possibly make any payments, either alone or in conjunction with any other payments, that (A) are non-deductible under, or would otherwise constitute a “parachute payment” within the meaning of, Section 280G of the Code or (B) are or may be subject to the imposition of an excise Tax under Section 4999 of the Code; (x) as of the date hereof the Company and the Company Subsidiaries have not agreed to, and are not required to, make any adjustments or changes to their accounting methods pursuant to Section 481 of the Code (or similar provisions of state, local or foreign law), and neither the Internal Revenue Service nor any other Tax Authority has proposed in writing any such adjustments or changes in the accounting methods of the Company and the Material Subsidiaries; (xi) to the Company’s knowledge, no unresolved material claim has ever been made in writing by any Tax Authority in a jurisdiction in which the Company or the Company Subsidiaries do not file Tax Returns that any such person is or may be subject to taxation by that jurisdiction; (xii) the Company is not, and has not been during the five-year period ending on the date hereof, a “United States real property holding corporation” within the meaning of Section 897(c)(2) of the Code; (xiii) neither the Company nor any of its Subsidiaries (1) is a party to any Tax sharing or similar agreement or any arrangement pursuant to which it or any of its Subsidiaries has an obligation to indemnify any party (other than the Company or any Company Subsidiary) with respect to Taxes or (2) is or has been since September 15, 2003 a member of an affiliated group filing a consolidated return (other than a group the common parent of which is the Company); (xiv) neither the Company nor any Company Subsidiary has engaged in any “reportable transactions” within the meaning of Treasury Regulation §1.6011-4(b) during the period for which such regulation is effective; and, (xv) during the five-year period ending on the

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conditional sales contracts and equipment leases with third parties entered into in the ordinary course of business and under which the Company or the Company Subsidiaries are not in default, (iii) Encumbrances for current Taxes and utilities not yet due and payable or which may hereafter be paid without penalty, which have been set aside in accordance with GAAP or which are being contested by appropriate proceedings, (iv) imperfections of title or Encumbrances, if any, that do not, individually or in the aggregate, materially impair the continued use and operation of any asset to which they relate in the conduct of the business of the Company or any of the Company Subsidiaries as presently conducted, (v) leases, subleases and similar agreements set forth on the Company Disclosure Schedules, (vi) easements, covenants, rights-of-way and other similar restrictions or conditions of record or which would be shown by a current accurate survey of any of the Real Property that do not materially interfere with the continued use and operation of the Real Property as currently used and operated, (vii) zoning, building and other restrictions imposed by any applicable law (including securities laws) that do not, individually or in the aggregate, materially impair the continued use and operation of any asset to which they relate in the conduct of the business of the Company or any of the Company Subsidiaries as presently conducted, (viii) Encumbrances that have been placed by any developer, landlord or other third party on property over which the Company or any of the Company Subsidiaries have easement rights or under any lease or subordination or similar agreements relating thereto that do not, individually or in the aggregate, materially impair the continued use and operation of any asset to which they relate in the conduct of the business of the Company or any of the Company Subsidiaries as presently conducted, (ix) unrecorded easements, covenants, rights-of-way and other similar restrictions on the Real Property none of which, individually or in the aggregate, materially impairs the continued use and operation of such Real Property as currently used and operated, (x) pledges and deposits made in the ordinary course of business in compliance with workers’ compensation, unemployment insurance and other social security laws or regulations, (xi) cash deposits to secure the performance of bids, trade contracts, leases, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature, in each case in the ordinary course of business consistent with past practice, and (xii) bankers’ liens and similar liens, including rights of offset or set-off in respect of deposit accounts and liens in favor of securities intermediaries in respect of securities accounts securing fees and costs owing to such securities intermediaries arising or incurred in the ordinary course of business. Neither the Company nor any Company Subsidiary is a party to nor is any of the Owned Real Property subject to any unrecorded instrument granting a right or option to any other person to purchase or lease or otherwise obtain title to, or an interest in, such Owned Real Property. Neither the Company nor any Company Subsidiary has received written notice of any pending violation of a condition or agreement contained in any easement, restrictive covenant or any similar instrument or agreement affecting any of the Owned Real Property, which in any event could reasonably be expected to have a Company Material Adverse Effect.

          (b) SECTION 4.14(b) of the Company Disclosure Schedule lists all leases and subleases (collectively, the “Leases”) pursuant to which any real estate is leased or subleased by the Company or one of the Company Subsidiaries and used in the business and operations of the Company and the Company Subsidiaries as conducted in the ordinary course of business (collectively, the “Leased Real Property” and, together with the Owned Real Property, the “Real Property”). Each such Lease is in full force and effect as against the Company or the applicable Company Subsidiary that is a party thereto and constitutes a legal, valid and binding obligation

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of, and is legally enforceable against, the Company or the applicable Company Subsidiary that is a party thereto. The Company has delivered to Buyer complete and correct copies of all Leases including all amendments thereto effective as of the date hereof. Neither the Company nor any Company Subsidiary has received written notice of any pending default under any Lease, and there has not occurred any event which (whether with or without notice, lapse of time or the happening or occurrence of any other event) would constitute such a default, which in either such event would reasonably be expected to have a Company Material Adverse Effect.

          (c) The Real Property listed on SECTION 4.14(a) of the Company Disclosure Schedule is all of the real property interests used in the business of the Company and the Company Subsidiaries as conducted in the ordinary course of business. The Company does not own or lease Real Property except as set forth on SECTION 4.14(a) and (b) of the Company Disclosure Schedule. Neither the Company nor any Company Subsidiary has received written notice of any pending or threatened condemnation proceedings or other similar action to take by eminent domain any of the Real Property. Neither the Company nor any Company Subsidiary is obligated under or bound by any option, right of first refusal, purchase contract or other contractual right to sell, lease or purchase any Real Property or any portion thereof which Real Property, individually or in the aggregate, is material to the Company or any Company Subsidiary. To the knowledge of the Company, each Real Property complies in all material respects with all applicable Laws.

          SECTION 4.15 Tangible Assets. The Company and each of the Company Subsidiaries has good and marketable title to all of its material tangible assets free and clear of all Encumbrances, other than any such Encumbrances imposed by applicable law, any defect in title or Encumbrance to the extent it would not have a Company Material Adverse Effect, or any other Permitted Encumbrance. The Company and each of the Company Subsidiaries holds valid leaseholds in all of the material tangible assets leased by it, in each case under valid and enforceable leases.

          SECTION 4.16 Material Contracts.

          (a) Except as listed and set forth in SECTION 4.16(a) of the Company Disclosure Schedule, the Company is not a party to any legally binding contract, agreement, arrangement, bond, commitment, note, loan, mortgage, lease, subcontract, indenture, instrument, license, purchase order, sale order, proposal or undertaking, whether written or oral, or other agreement legally binding on the parties thereto (“Contract”) that is:

               (i) an agreement limiting or restraining the freedom of Buyer or the Surviving Corporation or their affiliates following the Merger Closing to compete in any material respect in any line of business with any person;

               (ii) an agreement granting an Encumbrance on assets of the Company or any Company Subsidiary, other than any such encumbrances imposed by applicable law on any asset of the Company or a Company Subsidiary or that otherwise constitute a Permitted Encumbrance, or an agreement guaranteeing the payment of liabilities or performance of obligations of any other person (other than the Company or a Company Subsidiary) in an

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or enforceable as would not have a Company Material Adverse Effect. Neither the Company nor any Company Subsidiary is in any material respect and, to the knowledge of the Company, no other party thereto is in default in any material respect in the performance, observance or fulfillment of any material obligation, covenant or condition contained in the Material Contracts, and no event has occurred which with or without the giving of notice or lapse of time, or both, would constitute a default by the Company or a Company Subsidiary thereunder, except as would not reasonably be expected to have a Company Material Adverse Effect. As of the date hereof, neither the Company nor any Company Subsidiary has received any written notice of the intention of any party to terminate such Material Contract except as would not reasonably be expected to have a Company Material Adverse Effect. Complete and correct copies (or accurate descriptions) of all Material Contracts, together with all modifications and amendments thereto to the date of this Agreement, have been made available to Buyer or its representatives.

          SECTION 4.17 Employee Matters.

          (a) SECTION 4.17(a) of the Company Disclosure Schedule lists each ERISA Plan (as defined below) and each material Plan as of the date hereof. “Plan” shall mean each “employee pension benefit plan,” as that term is defined in section 3(2) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”); each “employee welfare benefit plan,” as that term is defined in section 3(1) of ERISA (such plans being hereinafter referred to collectively as the “ERISA Plans”); and each other retirement, pension, profit-sharing, money purchase, deferred compensation, excess benefits, incentive compensation, bonus, stock option or other equity related program, severance pay, change of control benefits or payments, fringe benefit, employment or other employee benefit plan, policy, program, agreement, or arrangement maintained or contributed to by the Company or the Company Subsidiaries in the six years preceding the date of this Agreement, and with respect to which the Company or the Company Subsidiaries have liability, or could have liability due to any applicable statute of limitations not having expired, as of the date hereof, in respect of or for the benefit of (i) any current employee, consultant or independent contractor of the Company or the Company Subsidiaries who provides substantially all of his or her services to or for the business of the Company or the Company Subsidiaries (any such individual referred to hereinafter as an “Employee”) or director or (ii) any former Employee or director, but excluding any such plan, program, agreement, or arrangement maintained or contributed to solely in respect of or for the benefit of Employees or former Employees employed or formerly employed outside of the United States, as of the date hereof. SECTION 4.17(a) of the Company Disclosure Schedule also lists any Foreign Plan (as defined below) that is a defined benefit type retirement Plan and each other material Foreign Plan. “Foreign Plan” shall mean each plan, program, policy agreement, or arrangement maintained or contributed to in the six years preceding the date of this Agreement, and with respect to which the Company or the Company Subsidiaries have liability, or could have liability due to any applicable statute of limitations not having expired, as of the date hereof, solely in respect of or for the benefit of current or former Employees or directors employed or formerly employed outside of the United States, as of the date hereof (collectively referred to hereinafter as the “Foreign Plans”). With respect to any Foreign Plans, (i) all Foreign Plans have been established, maintained and administered in material compliance with their terms and all applicable statutes, laws, ordinances, rules, orders, decrees, judgments, writs and regulations of any controlling governmental authority or instrumentality; (ii) all Foreign Plans that are required to be funded are fully funded, and with respect to all other Foreign Plans,

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adequate reserves therefore have been established on the accounting statements of the Company or any Company Subsidiary; and (iii) no material liability or obligation of the Company or any Company Subsidiary exists with respect to such Foreign Plans that has not been disclosed in SECTION 4.17(a) of the Company Disclosure Schedule. With respect to each Plan and each Foreign Plan listed on SECTION 4.17(a) of the Company Disclosure Schedule, the Company has delivered or made available to Buyer a current, accurate and complete copy (or, to the extent no such copy exists, an accurate description) thereof and to the extent applicable and available to the Company after reasonable inquiry: (i) any related trust agreement or other funding instrument; (ii) the most recent determination letter, if applicable; (iii) any summary plan description (to the extent required by applicable law) and summaries of material modifications; and (iv) for the two (2) most recent years (A) the Form 5500 and attached schedules, if applicable, (B) audited financial statements, if applicable, and (C) actuarial valuation reports, if applicable.

          (b) Except as otherwise set forth in SECTION 4.17(b) of the Company Disclosure Schedule, the execution and delivery of this Agreement by the Company and the performance of this Agreement by the Company will not directly result now or at any time in the future in (i) the payment to, or the acceleration of any payment to, any Employee of any severance, termination, change of control or similar payments or benefits, whether or not such payments would constitute parachute payments within the meaning of Section 280G of the Code or (ii) the acceleration, vesting or increase in benefits to any Employee or director.

          (c) Except as set forth on SECTION 4.17(c) of the Company Disclosure Schedule, with respect to the ERISA Plans, other than those ERISA Plans identified on SECTION 4.17(d) of the Company Disclosure Schedule as “multiemployer plans”:

               (i) The PBGC has not instituted proceedings to terminate any such ERISA Plan that is subject to Title IV of ERISA, no material liability under Title IV of ERISA has been incurred or is reasonably expected to be incurred by the Company, any of the Company Subsidiaries (other than liability for premiums due to the Pension Benefit Guaranty Corporation (the “PBGC”) and contributions required to be made in the ordinary course), unless such liability has been, or prior to the Merger Closing Date will be, satisfied in full;

               (ii) Neither the Company nor any Company Subsidiary has engaged in, or is a successor or parent corporation to an entity that has engaged in, a transaction described in Section 4069 or 4212(c) of ERISA. No (A) “reportable event” (as such term is defined in Section 4043 of ERISA) that could reasonably be expected to result in material liability, (B) non-exempt “prohibited transaction” (as such term is defined in Section 406 of ERISA and Section 4975 of the Code) that could reasonably be expected to result in a material liability, or (C) “accumulated funding deficiency” (as such term is defined in Section 302 of ERISA and Section 412 of the Code (whether or not waived)) has occurred with respect to any such ERISA Plan;

               (iii) Each such ERISA Plan has been operated and administered in all material respects in accordance with its provisions and all applicable laws and the Company and the Company Subsidiaries have performed in all material respects all obligations required to be performed by them thereunder and are not in any material respect in default under or in violation of any of the ERISA Plans;

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of any Company Intellectual Property, and the Company knows of no valid basis for same; and (iii) the transactions contemplated by this Agreement shall not impair the rights of the Company under, or cause any party to breach or default under any IP License, or cause material additional fees to be due thereunder.

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF BUYER

          Except as set forth in the Buyer Disclosure Schedule delivered by Buyer to the Company at or prior to the execution of this Agreement (the “Buyer Disclosure Schedule”), Buyer and Merger Subsidiary, jointly and severally, represent and warrant to the Company and each Principal Stockholder as follows:

          SECTION 5.01 Organization and Qualification; Subsidiaries. Each of Buyer and Merger Subsidiary is a limited partnership or corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization and has the requisite power and authority and all necessary governmental approvals to own, lease and operate its properties and to carry on its business as it is now being conducted, except where the failure to be so organized, existing or in good standing or to have such power, authority and governmental approvals would not, individually or in the aggregate, have a Buyer Material Adverse Effect (as defined below). Each of Buyer and Merger Subsidiary is duly qualified or licensed as a foreign corporation to do business, and is in good standing, in each jurisdiction where the character of the properties owned, leased or operated by it or the nature of its business makes such qualification or licensing necessary, except for such failures to be so qualified or licensed and in good standing that would not, individually or in the aggregate, have a Buyer Material Adverse Effect. The term “Buyer Material Adverse Effect” means any change, condition, circumstance or effect that is, or is reasonably likely to be, materially adverse to the assets and liabilities (taken together), business, financial condition or results of operations of the Buyer, Merger Subsidiary and each of Buyer’s other subsidiaries, taken as a whole (other than changes, conditions, circumstances or effects that are the result of (i) economic factors affecting the economy or financial markets as a whole or generally affecting any of the industries and markets in which Buyer, Merger Subsidiary or any of Buyer’s other subsidiaries operates, (ii) natural disasters, acts of war, sabotage or terrorism, military actions or the escalation thereof, (iii) any change in applicable laws, rules or regulations or accounting rules or (iv) actions contemplated by the parties in connection with this Agreement or the announcement or performance of this Agreement, except that the exclusions set forth in clauses (i), (ii) and (iii) shall only be effective if the Buyer, Merger Subsidiary or Buyer’s other subsidiaries are not substantially, disproportionately impacted in financial terms by such events when compared to other companies in the industries in which the Buyer, Merger Subsidiary or Buyer’s other subsidiaries operate).

          SECTION 5.02 Certificate of Incorporation and Bylaws. Buyer has heretofore made available to the Company a complete and correct copy of the Certificate of

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(iii) file any amended Tax Return with respect to any material Tax; (iv) change any annual Tax accounting period; (v) enter into any closing agreement relating to any material Tax; or (vi) surrender any right to claim a material Tax refund;

          (n) materially change the procedures for the collection of accounts receivable or the payment of accounts payable or change the accounting procedures relating to the receivables and payables other than in the ordinary course of business;

          (o) take any other action, other than reasonable and usual actions in the ordinary course of business and consistent with past practice and other than as required by law or changes in GAAP, with respect to accounting policies or procedures;

          (p) cancel any debts to, or waive any claims or rights of, the Company (other than ordinary course customer accommodations consistent with past practice) in excess of $2,000,000 in the aggregate, or waive, settle or compromise, or permit any settlement or compromise of, any litigation, arbitration, claim, suit, action, investigation or proceeding pending or threatened against the Company or any Company Subsidiary, or of which the Company or any Company Subsidiary or their assets are subject, in excess of $2,000,000 in the aggregate or in any manner that materially impacts the ability of the Company and the Company Subsidiaries to conduct their business;

          (q) incur Company Transaction Expenses in an aggregate amount in excess of the Assumed CTE Amount, unless the Company obtains a new or amended opinion from UBS (or another nationally recognized investment bank) to the effect that the Merger Consideration to be paid to the stockholders of the Company (other than the Principal Stockholders) is fair, from a financial point of view, to such stockholders after giving effect to the actual amount of Company Transaction Expenses; or

          (r) enter into or amend any contract, agreement, commitment or arrangement to effectuate any prohibited matter set forth in this SECTION 6.01.

          SECTION 6.02 Access to Information. During the term of this Agreement, the Company will give Buyer, its officers, directors, employees, counsel, financial advisors, auditors and other authorized representatives reasonable access to the offices, properties, books and records of the Company and the Company Subsidiaries, will furnish to Buyer, its counsel, financial advisors, auditors and authorized representatives such financial and operating data and other information as such persons may reasonably request and will instruct the Company’s employees, counsel and financial advisors to cooperate with Buyer in its reasonable investigation of the business of the Company and the Company Subsidiaries, in each case subject to any restrictions on such access imposed by law and subject to the terms of the Confidentiality Agreement, dated March 8, 2005, between the Company and First Reserve Corporation (the “Confidentiality Agreement”). During such period, the Company shall (and shall cause the Company Subsidiaries to) furnish promptly to Buyer all information concerning its business, properties and personnel as Buyer may reasonably request, including but not limited to financial reports generated in the ordinary course of business, subject to the terms of the Confidentiality Agreement. The Company shall furnish promptly to Buyer a copy of each report, schedule,

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registration statement and other document filed by it or the Company Subsidiaries during such period pursuant to the requirements of federal or state securities laws.

          SECTION 6.03 No Solicitation.

          (a) Subject to SECTION 6.03(b) below, the Company shall not, and shall cause its subsidiaries and each officer, director or employee of the Company, and any investment banker, attorney or other representative of the Company not to, take or cause, directly or indirectly, any of the following actions after the date hereof with any party other than Buyer, Merger Subsidiary or any of their respective designees or representatives: (i) solicit, knowingly encourage, initiate or participate in any negotiations, inquiries or discussions with respect to any offer, indication or proposal to acquire more than 20% of its business, assets or capital stock whether by merger, consolidation, other business combination, purchase of assets, tender or exchange offer or otherwise (each of the foregoing, an “Acquisition Proposal”) or (ii) disclose, in connection with an Acquisition Proposal, any information or provide access to its properties, books or records, except as required by law or pursuant to a governmental request for information.

          (b) Notwithstanding anything to the contrary contained in SECTION 6.03(a) or elsewhere in this Agreement, prior to the earlier of the Stock Purchase Closing and the Effective Time, the Company may, to the extent the Company’s Board of Directors (the “Board”), after consultation with outside counsel, determines in good faith that it would be required to do so in the proper exercise of its fiduciary duties, participate in discussions or negotiations with, and furnish non-public information and afford access to the properties, books, records, officers, employees and representatives of the Company to any person, entity or group after such person, entity or group has delivered to the Company, in writing, a bona fide unsolicited Acquisition Proposal for a majority of the Company’s business assets or capital stock which the Board, after consultation with and taking into account the advice of UBS or another independent, nationally recognized financial advisor, determines in good faith that, if consummated, would be more favorable to the Company’s stockholders from a financial point of view than the transactions contemplated by this Agreement (a “Superior Proposal”). In the event the Company receives a Superior Proposal prior to the earlier of the Stock Purchase Closing and the Effective Time, nothing contained in this Agreement (but subject to the terms of this paragraph (b)) will prevent the Company or any of its stockholders (including, without limitation, any of the Principal Stockholders) from executing or entering into an agreement relating to such Superior Proposal or prevent the Board from recommending such Superior Proposal to its stockholders, if the Board, after consultation with outside counsel, determines in good faith that it would be required to do so in the proper exercise of its fiduciary duties; in such case, the Board may withdraw, modify or refrain from making its recommendation of the transactions contemplated by this Agreement, and, to the extent it does so, the Company may refrain from calling, providing notice of or holding a meeting of its stockholders to adopt this Agreement or from soliciting proxies or consents to secure the vote or written consent of its stockholders to adopt this Agreement, if any such meeting, vote and/or consent is otherwise required, and may terminate this Agreement; provided, however, that the Company shall provide Buyer at least two business days prior written notice (together with a complete copy of the relevant agreement and any subsequent amendment thereto) of the Company’s intention to execute or enter into an agreement relating to such Superior Proposal and shall provide Buyer the

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