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<SEC-DOCUMENT>0000950152-07-002359.txt : 20070321
<SEC-HEADER>0000950152-07-002359.hdr.sgml : 20070321
<ACCEPTANCE-DATETIME>20070321160552
ACCESSION NUMBER:		0000950152-07-002359
CONFORMED SUBMISSION TYPE:	DEFM14A
PUBLIC DOCUMENT COUNT:		4
FILED AS OF DATE:		20070321
DATE AS OF CHANGE:		20070321
EFFECTIVENESS DATE:		20070321

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			BLAIR CORP
		CENTRAL INDEX KEY:			0000071525
		STANDARD INDUSTRIAL CLASSIFICATION:	RETAIL-CATALOG & MAIL-ORDER HOUSES [5961]
		IRS NUMBER:				250691670
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		DEFM14A
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-00878
		FILM NUMBER:		07709269

	BUSINESS ADDRESS:	
		STREET 1:		220 HICKORY ST
		CITY:			WARREN
		STATE:			PA
		ZIP:			16366
		BUSINESS PHONE:		8147233600

	MAIL ADDRESS:	
		STREET 1:		220 HICKORY STREET
		CITY:			WARREN
		STATE:			PA
		ZIP:			16366

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	NEW PROCESS CO
		DATE OF NAME CHANGE:	19890507
</SEC-HEADER>
<DOCUMENT>
<TYPE>DEFM14A
<SEQUENCE>1
<FILENAME>l24566bdefm14a.htm
<DESCRIPTION>BLAIR CORPORATION        DEFM14A
<TEXT>
<HTML>
<HEAD>
<TITLE>BLAIR CORPORATION          DEFM14A</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">UNITED
    STATES</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>SECURITIES AND EXCHANGE COMMISSION</B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>Washington,&#160;D.C. 20549</B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>



<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 12pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">SCHEDULE&#160;14A</FONT></B>
</DIV>

<DIV style="margin-top: 8pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>PROXY STATEMENT PURSUANT TO SECTION&#160;14(A) OF</B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>THE SECURITIES EXCHANGE ACT OF 1934 (Amendment
    No.&#160;&#160;&#160;&#160;&#160;)</B>
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <FONT style="font-size: 9pt">Filed by the
    Registrant&#160;&#160;<FONT face="wingdings">&#254;</FONT>
    </FONT>
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <FONT style="font-size: 9pt">Filed by a Party other than the
    Registrant&#160;&#160;<FONT face="wingdings">o</FONT>
    </FONT>
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <FONT style="font-size: 9pt">Check the appropriate box:
    </FONT>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <FONT style="font-size: 9pt"><FONT face="wingdings">o</FONT>&#160;&#160;Preliminary
    Proxy Statement
    </FONT>
</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <FONT style="font-size: 9pt"><FONT face="wingdings">o</FONT>&#160;&#160;Confidential,
    for Use of the Commission Only (as permitted by
    <FONT style="white-space: nowrap">Rule&#160;14a-6(e)(2))</FONT>
    </FONT>
</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <FONT style="font-size: 9pt"><FONT face="wingdings">&#254;</FONT>&#160;&#160;Definitive
    Proxy Statement
    </FONT>
</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <FONT style="font-size: 9pt"><FONT face="wingdings">o</FONT>&#160;&#160;Definitive
    Additional Materials
    </FONT>
</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <FONT style="font-size: 9pt"><FONT face="wingdings">o</FONT>&#160;&#160;Soliciting
    Material Pursuant to
    <FONT style="white-space: nowrap">&#167;240.14a-12</FONT>
    </FONT>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <FONT style="font-size: 12pt">BLAIR CORPORATION
    </FONT>
</DIV>

<CENTER style="font-size: 1pt; width: 100%; border-bottom: 1pt solid #000000"></CENTER><!-- callerid=999 iwidth=456 length=456 -->

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <FONT style="font-size: 8pt">(Name of Registrant as Specified In
    Its Charter)
    </FONT>
</DIV>

<DIV style="margin-top: 5pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<CENTER style="font-size: 1pt; width: 100%; border-bottom: 1pt solid #000000"></CENTER><!-- callerid=999 iwidth=456 length=456 -->

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <FONT style="font-size: 8pt">(Name of Person(s) Filing Proxy
    Statement, if other than the Registrant)
    </FONT>
</DIV>

<DIV style="margin-top: 5pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <FONT style="font-size: 9pt">Payment of Filing Fee (Check the
    appropriate box):
    </FONT>
</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <FONT style="font-size: 9pt"><FONT face="wingdings">o</FONT>&#160;&#160;No
    fee required.
    </FONT>
</DIV>

<DIV style="margin-top: 5pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>    <FONT style="font-size: 9pt"><FONT face="wingdings">o</FONT>&#160;&#160;
    </FONT></TD>
    <TD align="left">
    <FONT style="font-size: 9pt">Fee computed on table below per
    Exchange Act
    <FONT style="white-space: nowrap">Rules&#160;14a-6(i)(1)</FONT>
    and 0-11.
    </FONT>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 8pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="3%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    <FONT style="font-size: 9pt">(1)&#160;
    </FONT>
</TD>
    <TD align="left">
    <FONT style="font-size: 9pt">Title of each class of securities
    to which transaction applies:
    </FONT>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 6%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <FONT style="font-size: 9pt">Common Stock, no par value, of
    Blair Corporation
    </FONT>
</DIV>

<CENTER style="font-size: 1pt; width: 92%; border-bottom: 1pt solid #000000"></CENTER><!-- callerid=999 iwidth=456 length=423 -->

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>    <FONT style="font-size: 9pt">&#160;&#160;(2)&#160;
    </FONT></TD>
    <TD align="left">
    <FONT style="font-size: 9pt">Aggregate number of securities to
    which transaction applies:
    </FONT>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 6%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <FONT style="font-size: 9pt">4,084,681&#160;shares of Common
    Stock (consisting of 3,990,093&#160;shares of Common Stock
    issued, exclusive of treasury stock and inclusive of 138,501
    unvested restricted Common Shares issued pursuant to Stock
    Plans, as of January&#160;22, 2007, 94,588&#160;shares of Common
    Stock issuable upon exercise of
    <FONT style="white-space: nowrap">&#147;in-the-money&#148;</FONT>
    stock options)
    </FONT>
</DIV>

<DIV align="left" style="margin-left: 6%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<CENTER style="font-size: 1pt; width: 92%; border-bottom: 1pt solid #000000"></CENTER><!-- callerid=999 iwidth=456 length=424 -->

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>    <FONT style="font-size: 9pt">&#160;&#160;(3)&#160;
    </FONT></TD>
    <TD align="left">
    <FONT style="font-size: 9pt">Per unit price or other underlying
    value of transaction computed pursuant to Exchange Act
    <FONT style="white-space: nowrap">Rule&#160;0-11</FONT>
    (set forth the amount on which the filing fee is calculated and
    state how it was determined). The filing fee was determined
    based on the sum of (A)&#160;3,990,093&#160;shares of Common
    Stock multiplied by $42.50&#160;per share and (B)&#160;the
    aggregate value of
    <FONT style="white-space: nowrap">&#147;in-the-money&#148;</FONT>
    options to purchase 94,588&#160;shares of Common Stock
    determined by taking the difference between $42.50 and the
    weighted average exercise price per share of the
    <FONT style="white-space: nowrap">&#147;in-the-money&#148;</FONT>
    options of $21.89. The filing fee was determined by multiplying
    0.000107 by the sum of the preceding sentence.
    </FONT>
</TD>
</TR>

</TABLE>

<DIV align="left" style="margin-left: 6%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<CENTER style="font-size: 1pt; width: 92%; border-bottom: 1pt solid #000000"></CENTER><!-- callerid=999 iwidth=456 length=424 -->

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>    <FONT style="font-size: 9pt">&#160;&#160;(4)&#160;
    </FONT></TD>
    <TD align="left">
    <FONT style="font-size: 9pt">Proposed maximum aggregate value of
    transaction:
    </FONT>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 6%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <FONT style="font-size: 9pt">$171,528,411.18
    </FONT>
</DIV>

<CENTER style="font-size: 1pt; width: 92%; border-bottom: 1pt solid #000000"></CENTER><!-- callerid=999 iwidth=456 length=424 -->

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>    <FONT style="font-size: 9pt">&#160;&#160;(5)&#160;
    </FONT></TD>
    <TD align="left">
    <FONT style="font-size: 9pt">Total fee paid:
    </FONT>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 6%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <FONT style="font-size: 9pt">$18,353.54
    </FONT>
</DIV>

<CENTER style="font-size: 1pt; width: 92%; border-bottom: 1pt solid #000000"></CENTER><!-- callerid=999 iwidth=456 length=424 -->

<DIV style="margin-top: 5pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <FONT style="font-size: 9pt"><FONT face="wingdings">&#254;</FONT>&#160;&#160;Fee
    paid previously with preliminary materials.
    </FONT>
</DIV>

<DIV style="margin-top: 5pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>    <FONT style="font-size: 9pt"><FONT face="wingdings">o</FONT>&#160;&#160;
    </FONT></TD>
    <TD align="left">
    <FONT style="font-size: 9pt">Check box if any part of the fee is
    offset as provided by Exchange Act
    <FONT style="white-space: nowrap">Rule&#160;0-11(a)(2)</FONT>
    and identify the filing for which the offsetting fee was paid
    previously. Identify the previous filing by registration
    statement number, or the Form or Schedule and the date of its
    filing.
    </FONT>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 5pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>    <FONT style="font-size: 9pt">&#160;&#160;(1)&#160;
    </FONT></TD>
    <TD align="left">
    <FONT style="font-size: 9pt">Amount Previously Paid:
    </FONT>
</TD>
</TR>

</TABLE>

<DIV align="left" style="margin-left: 6%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<CENTER style="font-size: 1pt; width: 92%; border-bottom: 1pt solid #000000"></CENTER><!-- callerid=999 iwidth=456 length=424 -->

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>    <FONT style="font-size: 9pt">&#160;&#160;(2)&#160;
    </FONT></TD>
    <TD align="left">
    <FONT style="font-size: 9pt">Form, Schedule or Registration
    Statement No.:
    </FONT>
</TD>
</TR>

</TABLE>

<DIV align="left" style="margin-left: 6%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<CENTER style="font-size: 1pt; width: 92%; border-bottom: 1pt solid #000000"></CENTER><!-- callerid=999 iwidth=456 length=424 -->

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>    <FONT style="font-size: 9pt">&#160;&#160;(3)&#160;
    </FONT></TD>
    <TD align="left">
    <FONT style="font-size: 9pt">Filing Party:
    </FONT>
</TD>
</TR>

</TABLE>

<DIV align="left" style="margin-left: 6%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<CENTER style="font-size: 1pt; width: 92%; border-bottom: 1pt solid #000000"></CENTER><!-- callerid=999 iwidth=456 length=424 -->

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>    <FONT style="font-size: 9pt">&#160;&#160;(4)&#160;
    </FONT></TD>
    <TD align="left">
    <FONT style="font-size: 9pt">Date Filed:
    </FONT>
</TD>
</TR>

</TABLE>

<DIV align="left" style="margin-left: 6%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<CENTER style="font-size: 1pt; width: 92%; border-bottom: 1pt solid #000000"></CENTER><!-- callerid=999 iwidth=456 length=424 -->

<DIV style="margin-top: 5pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>    <FONT style="font-size: 9pt">&#160;&#160;&#160;&#160;&#160;
    </FONT></TD>
    <TD align="left">
    <B><FONT style="font-size: 9pt">Persons who are to respond to
    the collection of information contained in this form are not
    required to respond unless the form displays a currently valid
    OMB control number.</FONT></B>
</TD>
</TR>

</TABLE>

<P align="left" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV style="margin-top: 2pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <IMG src="l24566bl2456600.gif" alt="(BLAIR LOGO)" ><FONT style="font-size: 9pt">
    </FONT>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 9pt">March&#160;19, 2007</FONT></B>
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Dear Stockholder:
</DIV>

<DIV style="margin-top: 2pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A special meeting of stockholders of Blair Corporation, a
    Delaware corporation, has been scheduled for Tuesday,
    April&#160;24, 2007, at 11:00&#160;a.m., Eastern Daylight Time,
    at The Library Theatre, located at 302 Third Avenue West,
    Warren, Pennsylvania. At the special meeting, we will ask you to
    consider and vote on a proposal to adopt an Agreement and Plan
    of Merger, dated January&#160;23, 2007, or the &#147;merger
    agreement&#148;, pursuant to which Appleseed&#146;s Topco, Inc.,
    a Delaware corporation, has agreed to acquire our company in a
    cash merger, or the &#147;merger&#148;. Following the merger,
    Blair will become a wholly owned subsidiary of Appleseed&#146;s.
    If the merger agreement is adopted by our stockholders and the
    merger completed, you will no longer have an ownership interest
    in our company and your shares of Blair common stock will be
    converted into the right to receive $42.50 in cash, referred to
    as the merger consideration, without interest and less
    applicable withholding taxes, for each share of common stock
    that you own, unless you have properly exercised your appraisal
    rights with respect to the merger. The merger consideration
    represents a premium of approximately 15% to the closing price
    of our common stock on January&#160;22, 2007, the last trading
    day before the public announcement of the signing of the merger
    agreement.
</DIV>

<DIV style="margin-top: 2pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our board of directors unanimously adopted resolutions:
    (i)&#160;approving the merger agreement; (ii)&#160;determining
    that the merger agreement and the terms and conditions of the
    merger are fair to, advisable and in the best interests of our
    company and our stockholders; and (iii)&#160;directing that the
    merger agreement be submitted for adoption at a special meeting
    of our stockholders. In reaching this determination, our board
    of directors considered a variety of factors, which are
    discussed in the attached proxy statement. <B>Our board of
    directors unanimously recommends that all of our stockholders
    vote &#147;FOR&#148; the proposal to adopt the merger
    agreement.</B>
</DIV>

<DIV style="margin-top: 2pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The merger cannot be completed unless a majority of the
    outstanding shares of our common stock entitled to be cast at
    the special meeting vote to adopt the merger agreement.
</DIV>

<DIV style="margin-top: 2pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The accompanying Notice of Special Meeting of Stockholders and
    proxy statement explain the merger agreement and the merger and
    provide specific information concerning the special meeting.
    Please carefully read these materials and each appendix attached
    to the proxy statement.
</DIV>

<DIV style="margin-top: 2pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Your vote is very important, regardless of the number of shares
    you own. You may vote either by proxy or in person at the
    special meeting. To be certain that your shares are voted at the
    special meeting, please mark, sign, date and return promptly the
    enclosed proxy card in the postage-paid return envelope
    provided, or authorize the individuals named on the proxy card
    to vote your shares by calling the toll-free telephone number or
    by using the Internet as described in the instructions included
    with the proxy card, whether or not you plan to attend the
    special meeting in person. If you do not return your proxy card
    or authorize a proxy to vote on your behalf by telephone or
    Internet, or you abstain or do not instruct your broker or other
    nominee how to vote your shares, it will have the same effect as
    voting against the proposal to adopt the merger agreement.
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>OUR BOARD OF DIRECTORS BELIEVES THAT THE MERGER IS IN THE
    BEST INTERESTS OF OUR COMPANY AND OUR STOCKHOLDERS. ACCORDINGLY,
    OUR BOARD HAS UNANIMOUSLY APPROVED THE MERGER AGREEMENT AND
    UNANIMOUSLY RECOMMENDS THAT YOU VOTE &#147;FOR&#148; THE
    PROPOSAL&#160;TO ADOPT THE MERGER AGREEMENT.</B>
</DIV>

<DIV style="margin-top: 2pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>Please do not send your stock certificates to us at this
    time.</B>
</DIV>

<DIV style="margin-top: 2pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    On behalf of our board of directors, thank you in advance for
    your continued support.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 49%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Sincerely,
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 49%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <IMG src="l24566bl2456601.gif" alt="" >
</DIV>

<DIV align="left" style="margin-left: 49%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Craig Johnson
</DIV>

<DIV align="left" style="margin-left: 49%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Chairman of the Board of Directors</I>
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    This proxy statement is dated March&#160;19, 2007 and is first
    being mailed to our stockholders on or about March&#160;21, 2007.
</DIV>

<P align="left" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 14pt">BLAIR CORPORATION</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>220 Hickory Street, Warren, Pennsylvania 16366<BR>
    <FONT style="white-space: nowrap">(814)&#160;723-3600</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<CENTER style="font-size: 1pt; width: 18%; border-bottom: 1pt solid #000000"></CENTER><!-- callerid=999 iwidth=455 length=84 -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 12pt">NOTICE OF SPECIAL MEETING OF
    STOCKHOLDERS<BR>
    TO BE HELD AT 11:00&#160;A.M.&#160;ON TUESDAY, APRIL&#160;24,
    2007</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<CENTER style="font-size: 1pt; width: 18%; border-bottom: 1pt solid #000000"></CENTER><!-- callerid=999 iwidth=455 length=84 -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>NOTICE IS HEREBY GIVEN </B>that a special meeting of
    stockholders of Blair Corporation, will be held at The Library
    Theatre, located at 302 Third Avenue West, Warren, Pennsylvania
    on Tuesday, April&#160;24, 2007 at 11:00&#160;a.m., Eastern
    Daylight Time, for the following purposes, all of which are more
    completely set forth in the accompanying proxy statement:
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 8%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (1)&#160;to consider and vote upon a proposal to adopt the
    Agreement and Plan of Merger, dated as of January&#160;23, 2007,
    or the merger agreement, by and among Appleseed&#146;s Topco,
    Inc., a Delaware corporation, or Appleseed&#146;s, BLR
    Acquisition Corp., a Delaware corporation and wholly-owned
    subsidiary of Appleseed&#146;s, or BLR Acquisition, and Blair
    Corporation, a Delaware corporation. A copy of the merger
    agreement is attached to this proxy statement as
    Appendix&#160;A. Pursuant to the terms of the merger agreement,
    BLR Acquisition will merge with and into Blair, with our company
    being the surviving corporation and becoming a wholly-owned
    subsidiary of Appleseed&#146;s following the merger, and each
    share of our common stock, other than those shares of common
    stock, if any, held by stockholders who properly exercise their
    appraisal rights under Delaware law, will be converted into the
    right to receive $42.50 in cash, without interest;&#160;and
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 8%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (2)&#160;to consider and vote upon a proposal to grant
    discretionary authority to adjourn the special meeting if
    necessary or appropriate to permit further solicitation of
    additional proxies if there are not sufficient votes at the time
    of the special meeting to adopt the merger agreement.
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>Our board of directors unanimously recommends that all of our
    stockholders vote &#147;FOR&#148; the proposal to adopt the
    merger agreement.</B>
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The board of directors has fixed March&#160;16, 2007 as the
    record date for the determination of stockholders entitled to
    notice of and to vote at the special meeting and any adjournment
    or postponement thereof. Only those stockholders of record as of
    the close of business on that date will be entitled to notice of
    and to vote at the special meeting. At the close of business on
    the record date, there were 3,854,287&#160;shares of our common
    stock entitled to vote at the special meeting.
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our company&#146;s stockholders have the right to dissent from
    the merger and obtain payment in cash of the appraised fair
    value of their shares under applicable provisions of Delaware
    law. In order to perfect and exercise appraisal rights,
    stockholders must give written demand for appraisal of their
    shares before the taking of the vote on the merger at the
    special meeting and must not vote in favor of the proposal to
    adopt the merger agreement. A copy of the applicable Delaware
    statutory provisions is included as Appendix&#160;C to the
    accompanying proxy statement, and a summary of these provisions
    can be found under &#147;The Merger&#160;&#151; Appraisal
    Rights&#148; in the accompanying proxy statement.
</DIV>



<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 49%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    By Order of the Board of Directors,
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 49%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <IMG src="l24566bl2456602.gif" alt="" >
</DIV>

<DIV align="left" style="margin-left: 49%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Herbert G. Hotchkiss</I>
</DIV>

<DIV align="left" style="margin-left: 49%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Corporate Secretary</I>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Warren, Pennsylvania
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    March&#160;19, 2007
</DIV>

<P align="left" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    YOUR VOTE IS VERY IMPORTANT. THE AFFIRMATIVE VOTE OF THE HOLDERS
    OF A MAJORITY OF THE OUTSTANDING SHARES&#160;OF OUR COMMON STOCK
    ENTITLED TO BE CAST AT THE SPECIAL MEETING IS REQUIRED TO ADOPT
    THE MERGER AGREEMENT. EVEN IF YOU PLAN TO BE PRESENT AT THE
    SPECIAL MEETING, YOU ARE URGED TO COMPLETE, SIGN, DATE AND
    RETURN THE ENCLOSED PROXY CARD PROMPTLY IN THE ENCLOSED
    POSTAGE-PAID RETURN ENVELOPE PROVIDED OR AUTHORIZE THE
    INDIVIDUALS NAMED ON THE PROXY CARD TO VOTE YOUR SHARES&#160;BY
    CALLING THE TOLL-FREE TELEPHONE NUMBER OR BY USING THE INTERNET
    AS DESCRIBED IN THE INSTRUCTIONS&#160;INCLUDED WITH THE PROXY
    CARD. IF YOU ATTEND THE SPECIAL MEETING, YOU MAY VOTE EITHER IN
    PERSON OR BY PROXY. ANY PROXY GIVEN MAY BE REVOKED BY YOU IN
    WRITING OR IN PERSON AT ANY TIME PRIOR TO THE EXERCISE THEREOF.
    HOWEVER, IF YOU ARE A STOCKHOLDER WHOSE SHARES&#160;ARE NOT
    REGISTERED IN YOUR OWN NAME, YOU WILL NEED ADDITIONAL
    DOCUMENTATION FROM THE RECORD HOLDER IN ORDER TO VOTE IN PERSON
    AT THE SPECIAL MEETING. FAILURE TO VOTE YOUR SHARES&#160;BY
    MAIL, TELEPHONE, INTERNET OR IN PERSON AT THE SPECIAL MEETING
    WILL HAVE THE SAME EFFECT AS A VOTE AGAINST THE MERGER.
</DIV>

<P align="left" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">BLAIR
    CORPORATION PROXY STATEMENT<BR>
    </FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">TABLE OF
    CONTENTS</FONT></B>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="96%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Page</B>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#101'><FONT style="font-size: 10pt">CAUTIONARY
    STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#160;1
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#102'><FONT style="font-size: 10pt">SUMMARY</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#160;2
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#103'><FONT style="font-size: 10pt">QUESTIONS AND
    ANSWERS ABOUT THE MERGER</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#160;7
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#104'><FONT style="font-size: 10pt">THE SPECIAL
    MEETING</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    10
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    <A HREF='#105'><FONT style="font-size: 10pt">Date, Time and
    Place</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    10
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    <A HREF='#106'><FONT style="font-size: 10pt">Matters to be
    Considered</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    10
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    <A HREF='#107'><FONT style="font-size: 10pt">Shares Outstanding
    and Entitled to Vote; Record Date</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    10
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    <A HREF='#108'><FONT style="font-size: 10pt">Votes
    Required</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    10
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    <A HREF='#109'><FONT style="font-size: 10pt">How to Vote Your
    Shares</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    11
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    <A HREF='#110'><FONT style="font-size: 10pt">Voting of
    Proxies</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    11
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    <A HREF='#111'><FONT style="font-size: 10pt">Solicitation of
    Proxies</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    11
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    <A HREF='#112'><FONT style="font-size: 10pt">Stock
    Certificates</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    11
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    <A HREF='#113'><FONT style="font-size: 10pt">Recommendation of
    Our Board of Directors</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    12
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    <A HREF='#114'><FONT style="font-size: 10pt">Contact for Our
    Stockholders Regarding Questions and Requests</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    12
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#115'><FONT style="font-size: 10pt">THE
    MERGER</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    13
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    <A HREF='#170'><FONT style="font-size: 10pt">Parties to the
    Merger</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    13
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    <A HREF='#116'><FONT style="font-size: 10pt">Description of the
    Merger</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    13
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    <A HREF='#117'><FONT style="font-size: 10pt">Background of the
    Merger</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    13
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    <A HREF='#118'><FONT style="font-size: 10pt">Our Reasons for the
    Merger</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    16
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    <A HREF='#119'><FONT style="font-size: 10pt">Recommendation of
    The Board of Directors</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    17
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    <A HREF='#120'><FONT style="font-size: 10pt">Opinion of Our
    Financial Advisor</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    17
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    <A HREF='#121'><FONT style="font-size: 10pt">Effective Time of
    the Merger</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    25
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    <A HREF='#122'><FONT style="font-size: 10pt">Structure of the
    Merger and Merger Consideration</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    25
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    <A HREF='#123'><FONT style="font-size: 10pt">Treatment of Stock
    Options and Restricted Stock</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    25
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    <A HREF='#124'><FONT style="font-size: 10pt">Exchange and
    Payment Procedures</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    25
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    <A HREF='#125'><FONT style="font-size: 10pt">Representations and
    Warranties</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    26
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    <A HREF='#126'><FONT style="font-size: 10pt">Conduct of Business
    Pending the Merger</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    27
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    <A HREF='#127'><FONT style="font-size: 10pt">No Solicitation and
    Go Shop Period</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    30
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    <A HREF='#128'><FONT style="font-size: 10pt">Employee Benefit
    Plans</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    31
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    <A HREF='#129'><FONT style="font-size: 10pt">Warren Charitable
    Contributions After the Merger</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    32
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    <A HREF='#130'><FONT style="font-size: 10pt">Indemnification;
    Directors&#146; and Officers&#146; Insurance</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    32
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    <A HREF='#131'><FONT style="font-size: 10pt">Stockholder
    Meeting</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    32
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    <A HREF='#132'><FONT style="font-size: 10pt">Reasonable
    Efforts</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    32
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    <A HREF='#133'><FONT style="font-size: 10pt">Certain Other
    Covenants</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    32
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    <A HREF='#134'><FONT style="font-size: 10pt">Conditions to the
    Merger</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    33
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    <A HREF='#135'><FONT style="font-size: 10pt">Regulatory
    Approvals</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    36
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    <A HREF='#136'><FONT style="font-size: 10pt">Termination of the
    Merger Agreement</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    36
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    <A HREF='#137'><FONT style="font-size: 10pt">Effect of
    Termination</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    37
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    <A HREF='#138'><FONT style="font-size: 10pt">Termination
    Fees</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    37
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    <A HREF='#139'><FONT style="font-size: 10pt">Amendment and
    Waiver of the Merger Agreement</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    38
</TD>
</TR>
</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    i
</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="96%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Page</B>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    <A HREF='#140'><FONT style="font-size: 10pt">Interests of Our
    Directors and Executive Officers in the Merger</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    38
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    <A HREF='#141'><FONT style="font-size: 10pt">Litigation Relating
    to the Merger</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    42
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    <A HREF='#142'><FONT style="font-size: 10pt">Material Federal
    Income Tax Consequences of the Merger</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    42
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    <A HREF='#143'><FONT style="font-size: 10pt">Expenses of the
    Merger</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    44
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    <A HREF='#144'><FONT style="font-size: 10pt">Appraisal
    Rights</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    44
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    <A HREF='#145'><FONT style="font-size: 10pt">Delisting and
    Deregistration of Our Common Stock</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    46
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#146'><FONT style="font-size: 10pt">SHAREHOLDER
    AGREEMENTS</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    47
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#147'><FONT style="font-size: 10pt">MARKET PRICE AND
    DIVIDEND DATA</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    48
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#148'><FONT style="font-size: 10pt">SECURITY OWNERSHIP
    OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    49
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#149'><FONT style="font-size: 10pt">ADJOURNMENT OF THE
    SPECIAL MEETING</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    51
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    <A HREF='#153'><FONT style="font-size: 10pt">Granting of
    Discretionary Authority to Adjourn Our Special Meeting</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    51
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#150'><FONT style="font-size: 10pt">STOCKHOLDER
    PROPOSALS</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    51
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#151'><FONT style="font-size: 10pt">OTHER
    MATTERS</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    52
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#152'><FONT style="font-size: 10pt">WHERE YOU CAN FIND
    MORE INFORMATION</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    52
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -52pt; margin-left: 52pt">
    <FONT style="font-size: 10pt">Appendix&#160;A&#160;Agreement and
    Plan of Merger, dated as of January&#160;23, 2007, by and among
    Appleseed&#146;s Topco, Inc., BLR Acquisition Corp. and Blair
    Corporation
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    A-1
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -51pt; margin-left: 51pt">
    <FONT style="font-size: 10pt">Appendix&#160;B&#160;Fairness
    Opinion of Stephens Inc.
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    B-1
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -51pt; margin-left: 51pt">
    <FONT style="font-size: 10pt">Appendix&#160;C&#160;Section&#160;262
    of the General Corporations Law of the State of Delaware
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    C-1
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    ii
</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->
<A name='101'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">CAUTIONARY
    STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    This proxy statement and the documents incorporated herein by
    reference contain forward-looking statements by us within the
    meaning of Sections&#160;27A of the Securities Act of 1933, as
    amended, or the Securities Act, and Section&#160;21E of the
    Securities Exchange Act of 1934, as amended, or the Exchange
    Act, that are based on our current expectations, assumptions,
    estimates and projections about our company and our industry.
    These forward-looking statements include our statements
    concerning whether and when the merger will close, whether
    conditions to the merger will be satisfied, and the effect of
    the merger on our business and operating results. In addition,
    any of the words &#147;believes,&#148; &#147;expects,&#148;
    &#147;anticipates,&#148; &#147;estimates,&#148;
    &#147;plans,&#148; &#147;projects,&#148; &#147;predicts&#148;
    and similar expressions indicate forward-looking statements.
    These forward-looking statements are subject to numerous risks
    and uncertainties that could cause actual results to differ
    materially from those contemplated by the forward-looking
    statements due to, among other things:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the company&#146;s success in gaining regulatory approval of the
    transaction;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    regulatory changes;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    changes in general economic conditions or changes in the retail
    industry;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the failure of the merger to be completed or difficulties in
    obtaining stockholder approval of the merger agreement;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    projected sales and earnings, and our company&#146;s ability to
    maintain selling margins;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    customer demand and consumer preferences;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the availability, selection and purchasing of attractive
    merchandise on favorable terms;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    economic and weather conditions for regions in which the
    company&#146;s stores are located and the effect of these
    factors on the buying patterns of the company&#146;s customers;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the impact of competitive pressures in our industry and other
    retail channels including specialty, off-price, discount,
    internet, and mail-order retailers;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    potential disruption from terrorist activity;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    world conflict and the possible impact on consumer spending
    patterns and other economic and demographic changes of similar
    or dissimilar nature;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    diversion of management time on merger-related issues;&#160;and
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    failure by us to satisfy the other conditions to the merger.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The statements made in this proxy statement represent our views
    as of the date of this proxy statement, and it should not be
    assumed that the statements made in this proxy statement will
    remain accurate as of any future date. Except to the extent
    required by applicable law or regulation, we undertake no duty
    to any person to update the statements made in this proxy
    statement under any circumstances. Forward-looking statements
    are not guarantees of performance. They involve risks,
    uncertainties and assumptions.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    For additional information about factors that could cause actual
    results to differ materially from those described in the
    forward-looking statements, please see our reports that have
    been filed with the Securities and Exchange Commission, or SEC,
    under &#147;Where You Can Find More Information.&#148;
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    1
</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->
<DIV style="width: 100%; height: 9in; border-top: 1px solid #000000; padding-top: 12pt; border-right: 1px solid #000000; padding-right: 12pt; border-bottom: 1px solid #000000; padding-bottom: 12pt; border-left: 1px solid #000000; padding-left: 12pt"><!-- Begin box 1 -->
<A name='102'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">SUMMARY</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>This summary highlights selected information from this proxy
    statement and may not contain all of the information that is
    important to you. To understand the merger fully and for a more
    complete description of the legal terms of the merger, you
    should read carefully this entire document, including the merger
    agreement, attached as Appendix&#160;A, and the other documents
    to which we have referred you. See &#147;Where You Can Find More
    Information&#148; beginning on page&#160;52. Page references are
    included in this summary to direct you to a more complete
    description of the topics contained in this proxy statement.</I>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Throughout this document, &#147;Appleseed&#146;s&#148; refers
    to Appleseed&#146;s Topco, Inc., a Delaware corporation,
    &#147;BLR&#148; and &#147;BLR Acquisition&#148; refers to BLR
    Acquisition Corp., a Delaware corporation and wholly-owned
    subsidiary of Appleseed&#146;s, and references to
    &#147;we,&#146;&#146;, &#147;us,&#146;&#146;, &#147;our&#148; or
    &#147;Blair&#148; refer to Blair Corporation. &#147;Golden
    Gate&#148; refers to Golden Gate Capital, the parent company of
    Appleseed&#146;s. Also, we refer to our merger with BLR
    Acquisition as the &#147;merger,&#148; and the Agreement and
    Plan of Merger, dated as of January&#160;23, 2007, by and among
    Appleseed&#146;s, BLR&#160;Acquisition and Blair as the
    &#147;merger agreement.&#148; &#147;Surviving corporation&#148;
    refers to Blair Corporation as a subsidiary of Appleseed&#146;s
    after the effective time of the merger.</I>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">The
    Merger (Page&#160;13)</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    You are being asked to vote to adopt the Agreement and Plan of
    Merger (the &#147;merger agreement&#148;), dated as of
    January&#160;23, 2007, by and among Blair, BLR Acquisition and
    Appleseed&#146;s. The merger agreement provides that BLR
    Acquisition will be merged with and into Blair, and each
    outstanding share of common stock, par value $0.01&#160;per
    share, of Blair (other than shares held in the treasury of Blair
    or by Appleseed&#146;s or BLR Acquisition and other than shares
    held by a stockholder who properly demands statutory appraisal
    rights), will be converted into the right to receive $42.50 in
    cash, without interest. For example, if you own 100&#160;shares
    of our common stock, you will receive $4,250.00 in cash in
    exchange for your shares.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Parties
    to the Merger (Page&#160;13)</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Blair.</I>&#160;&#160;We are a national catalog and
    multi-channel direct marketer of women&#146;s and men&#146;s
    apparel and home products. We sell a broad range of women&#146;s
    and men&#146;s apparel and home products through direct mail
    marketing and through our Web site <U>www.blair.com</U>. Blair
    employs approximately 1,900 associates (worldwide) and operates
    facilities and retail outlets in Northwestern Pennsylvania and
    Wilmington, Delaware. Our principal executive offices are
    located at 220 Hickory Street, Warren, Pennsylvania 16366 and
    our telephone number is
    <FONT style="white-space: nowrap">(814)&#160;723-3600.</FONT>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Appleseed&#146;s.</I>&#160;&#160;Appleseed&#146;s is a
    portfolio company of Golden Gate, a leading private equity firm,
    and is a leading, multi-channel marketer of apparel and home
    products focused on serving the needs of the women and men above
    the age of 50. Appleseed&#146;s provides products to consumers
    through the direct channels of catalog, internet and retail.
    Appleseed&#146;s is comprised of the brands Appleseed&#146;s,
    Draper&#146;s&#160;&#38; Damon&#146;s, Haband, Norm Thompson,
    Sahalie, Solutions and The Tog Shop. Appleseed&#146;s principal
    executive offices are located at 30 Tozer Road, Beverly,
    Massachusetts 01915 and its telephone number is
    <FONT style="white-space: nowrap">(978)&#160;922-2040.</FONT>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>BLR Acquisition.</I>&#160;&#160;BLR Acquisition is a
    wholly-owned subsidiary of Appleseed&#146;s organized under the
    laws of Delaware. It was incorporated solely for the purposes of
    the merger and is engaged in no other business other than those
    incidental to its formation and in connection with the
    transactions contemplated by the merger agreement. BLR
    Acquisition&#146;s principal executive offices are located at 30
    Tozer Road, Beverly, Massachusetts 01915 and its telephone
    number is
    <FONT style="white-space: nowrap">(978)&#160;922-2040.</FONT>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">The
    Special Meeting of Stockholders (Page&#160;10)</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Date, Time and Place.</I>&#160;&#160;A special meeting of
    stockholders will be held on April&#160;24, 2007 at
    11:00&#160;a.m., Eastern Daylight Time, at The Library Theatre,
    302 Third Avenue West, Warren, Pennsylvania.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Purpose of the Special Meeting.</I>&#160;&#160;At the special
    meeting, we will ask you to vote for the proposal to adopt the
    merger agreement. We will also ask you to approve a proposal to
    grant discretionary authority to adjourn the special meeting if
    necessary or appropriate to permit further solicitation of
    proxies if there are not sufficient votes at the time of the
    special meeting to adopt the merger agreement.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Vote Required.</I>&#160;&#160;The affirmative vote of a
    majority of the outstanding shares of our common stock entitled
    to be cast at the special meeting is required to vote to adopt
    the merger agreement. Proxies returned to us, if properly
</DIV>
</DIV><!-- End box 1 -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    2
</DIV><!-- END LOGICAL PAGE -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->
<DIV style="width: 100%; height: 9in; border-top: 1px solid #000000; padding-top: 12pt; border-right: 1px solid #000000; padding-right: 12pt; border-bottom: 1px solid #000000; padding-bottom: 12pt; border-left: 1px solid #000000; padding-left: 12pt"><!-- Begin box 1 -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    signed and dated but not marked to indicate your voting
    preference, will be counted as votes &#147;FOR&#148; the
    proposal to adopt of the merger agreement. The failure to vote
    has the same effect as a vote against the adoption of the merger
    agreement.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Record Date; Shares&#160;Entitled to Vote.</I>&#160;&#160;You
    are entitled to vote at the special meeting if you owned shares
    of our common stock at the close of business on March&#160;16,
    2007, the record date for the special meeting. You will have one
    vote at the special meeting for each share of our common stock
    you owned at the close of business on the record date. As of the
    record date, there were 3,854,287&#160;shares of our common
    stock entitled to be voted at the special meeting.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Recommendation
    of Our Board of Directors (Page&#160;12)</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our board of directors by unanimous vote:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    determined that the merger and the terms of the merger agreement
    are fair to, advisable and in the best interests of our company
    and our stockholders;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    approved the merger agreement, the merger and the other
    transactions contemplated by the merger agreement;&#160;and
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    recommends that our stockholders vote &#147;FOR&#148; the
    proposal to adopt the merger agreement.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Opinion
    of Our Financial Advisor (Page&#160;17)</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In connection with the merger, our financial advisor, Stephens
    Inc., or Stephens, delivered a written opinion to our board of
    directors that, as of the date of such opinion and based upon
    and subject to the factors and assumptions set forth therein,
    the $42.50 per share in cash to be received by holders of the
    outstanding shares of Blair common stock pursuant to the merger
    agreement was fair from a financial point of view to those
    holders. The written opinion of Stephens is attached to this
    proxy statement as Appendix&#160;B. We encourage you to read
    this opinion carefully in its entirety for a description of the
    procedures followed, assumptions made, matters considered and
    limitations on the scope of review undertaken. This opinion does
    not constitute a recommendation to any stockholder as to how
    such stockholder should vote or act with respect to any matter
    relating to the merger.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Effective
    Time of the Merger (Page&#160;25)</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We are working to complete the merger as soon as possible, and
    we anticipate completing the merger during the Spring of 2007,
    subject to the receipt of stockholder approval and satisfaction
    of the closing conditions under the merger agreement.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Treatment
    of Stock Options and Restricted Stock (Page&#160;25)</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    At the effective time of the merger, all stock options granted
    by us at or prior to January&#160;23, 2007, shall be canceled
    and become immediately vested and exercisable in full. In
    consideration of such cancellation, each holder of any such
    stock option with an exercise price less than the merger
    consideration will receive from us in settlement of such stock
    option at the closing of the merger, a cash payment, subject to
    any required withholding of taxes, equal to the product of
    (i)&#160;the total number of shares of our common stock subject
    to such stock option at the effective time of the merger and
    (ii)&#160;the excess, if any, of the merger consideration over
    the exercise price per share of such stock option. Each stock
    option that has an exercise price equal to or in excess of the
    merger consideration shall be canceled at the effective time of
    the merger for no consideration.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition, each share of restricted common stock, which was
    issued pursuant to our stock plans at or prior to
    January&#160;23, 2007, whether in book-entry or certificated
    form, will, at the effective time of the merger, become fully
    vested and converted into, and cancelled in exchange for, the
    right to receive the merger consideration, plus any
    <FONT style="white-space: nowrap">&#147;gross-up&#148;</FONT>
    for income taxes payable on account of such acceleration of the
    vesting of such restricted common stock as provided in each such
    holder&#146;s restricted stock award agreement as in effect as
    of January&#160;23, 2007.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Procedures
    for Receiving Merger Consideration (Page&#160;25)</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    You will need to surrender your common stock certificates to
    receive the $42.50 in cash per share after the consummation of
    the merger, but you should not send in any certificates now. As
    soon as reasonably practicable after the effective time of the
    merger, the paying agent appointed by Appleseed&#146;s will send
    you a letter of transmittal
</DIV>
</DIV><!-- End box 1 -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    3
</DIV><!-- END LOGICAL PAGE -->
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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->
<DIV style="width: 100%; height: 9in; border-top: 1px solid #000000; padding-top: 12pt; border-right: 1px solid #000000; padding-right: 12pt; border-bottom: 1px solid #000000; padding-bottom: 12pt; border-left: 1px solid #000000; padding-left: 12pt"><!-- Begin box 1 -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    and instructions for surrendering certificates representing
    shares of our common stock in exchange for the merger
    consideration. The letter of transmittal should be properly
    completed and returned to the paying agent along with the stock
    certificates representing shares of our common stock. After a
    properly completed letter of transmittal has been received and
    processed along with any stock certificates, you will be sent
    the merger consideration, without interest and less applicable
    withholding taxes, to which you are entitled.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">No
    Solicitation and Go Shop Period (Page&#160;30)</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We have agreed that, while the merger is pending, we will not
    initiate or, subject to certain limited exceptions, engage in
    discussions with any third party regarding transactions such as
    a merger, business combination or sale of a material amount of
    assets or capital stock. However, during the period commencing
    as of January&#160;23, 2007 and ending as of 11:59&#160;p.m. New
    York time on February&#160;22, 2007, or the &#147;Go Shop
    Period&#148;, we had the right to solicit acquisition proposals
    from third parties, as long as we complied with certain
    obligations. We actively sought acquisition proposals during the
    Go&#160;Shop Period and engaged Stephens to solicit acquisition
    proposals on our behalf. As of the date of this proxy statement,
    the Go Shop Period has expired and we have not received any such
    acquisition proposals.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Conditions
    to Completing the Merger (Page&#160;33)</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Before we can complete the merger, a number of conditions must
    be satisfied. These conditions include:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    adoption of the merger agreement by our stockholders;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    no law, rule, regulation, executive order or decree, judgment,
    injunction, ruling or other order having been enacted, issued,
    promulgated, enforced or entered by a governmental entity that
    is in effect and has the effect of preventing or prohibiting the
    consummation of the merger or otherwise imposing material
    limitations on the ability of BLR Acquisition and
    Appleseed&#146;s to effectively acquire or hold our business and
    those of our subsidiaries;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    all regulatory approvals or waivers required to consummate the
    transactions contemplated by the merger agreement by any
    governmental authority having been obtained and remaining in
    full force and effect, and all statutory waiting periods in
    respect thereof having expired;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the performance, subject to various materiality qualifications,
    by all parties of their respective obligations, agreements and
    covenants in the merger agreement, and the representations and
    warranties of Appleseed&#146;s, BLR and Blair in the merger
    agreement being true and correct, subject to the applicable
    materiality qualifiers and specific exclusions;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the holders of not more than 15% of our outstanding common stock
    having demanded appraisal rights with respect to their shares
    under Delaware law;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    other than previously disclosed in our SEC filings prior to
    January&#160;23, 2007, no effect, event or change having
    occurred since December&#160;31, 2005, which has had, or would
    reasonably be expected to have, a material adverse effect on our
    company;&#160;and
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the receipt by Appleseed&#146;s of signed letters of resignation
    from each of the directors of Blair and its subsidiaries,
    effective at or prior to the effective time of the merger.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Regulatory
    Approvals (Page&#160;36)</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The merger cannot proceed in the absence of the requisite
    regulatory approvals or waivers required to complete the
    transactions, including under the
    <FONT style="white-space: nowrap">Hart-Scott-Rodino</FONT>
    Antitrust&#160;Improvements Act of 1976, as amended, or the HSR
    Act, and the rules and regulations thereunder. Under the HSR Act
    and the rules promulgated thereunder, the merger cannot be
    completed until we notify and furnish information to the Federal
    Trade Commission, or the FTC, and the Antitrust Division of the
    U.S.&#160;Department of Justice, or the Antitrust Division, and
    specified waiting period requirements are satisfied. We and
    Appleseed&#146;s filed notification and report forms under the
    HSR Act with the FTC and the Antitrust Division on
    February&#160;28, 2007 and requested early termination of the
    waiting period. The FTC granted early termination of the HSR
    waiting period effective March&#160;9, 2007. Thus, the
    transaction has been cleared by the applicable antitrust
    regulatory authorities.
</DIV>
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<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    4
</DIV><!-- END LOGICAL PAGE -->
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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->
<DIV style="width: 100%; height: 9in; border-top: 1px solid #000000; padding-top: 12pt; border-right: 1px solid #000000; padding-right: 12pt; border-bottom: 1px solid #000000; padding-bottom: 12pt; border-left: 1px solid #000000; padding-left: 12pt"><!-- Begin box 1 -->

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Termination
    of the Merger Agreement (Page&#160;36)</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Blair, Appleseed&#146;s and BLR Acquisition can mutually agree
    to terminate the merger agreement without completing the merger,
    even if our stockholders have adopted the merger agreement. The
    merger agreement may also be terminated in certain other
    circumstances, including:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    by Blair, Appleseed&#146;s or BLR Acquisition, if:
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="6%"></TD>
    <TD width="2%"></TD>
    <TD width="92%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    any governmental entity has issued an order, decree or ruling or
    taken any other action permanently restraining, enjoining or
    otherwise prohibiting the merger and such order or other action
    is final and non-appealable;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the closing has not occurred on or before July&#160;23, 2007, or
    the &#147;Termination Date&#148;; provided that the right to
    terminate the merger agreement pursuant to this section will not
    be available to a party whose failure to perform any covenant or
    obligation under the merger agreement was the cause of or
    resulted in the failure of the merger to occur on or before the
    Termination Date;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    there exists any state or federal law, order, rule or regulation
    that makes the consummation of the merger illegal or otherwise
    prohibited;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our stockholders do not adopt the merger agreement at the
    special meeting or any postponement or adjournment thereof;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the merger has not been completed on or prior to the Termination
    Date as a result of a breach by BLR&#160;Acquisition or
    Appleseed&#146;s of any of their respective covenants or
    agreements in the merger agreement such that the closing
    condition with respect thereto would not be satisfied, or a
    breach by BLR&#160;Acquisition or Appleseed&#146;s of any of
    their respective representations and warranties in the merger
    agreement such that the closing condition with respect thereto
    would not be satisfied and, in either such case, such breach is
    not cured within 30&#160;days after receipt by BLR and
    Appleseed&#146;s of notice of such breach;&#160;and
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    there is a material breach by the non-terminating party of any
    of its representations, warranties, covenants or agreements in
    the merger agreement such that the closing conditions would not
    be satisfied and such breach has not been cured within
    30&#160;days following notice by the terminating party or cannot
    be cured by the Termination Date; provided that there is no cure
    period for the breach by Blair of certain covenants and
    guaranties related to the its non-solicitation obligation, and
    its obligations related to the proxy statement and
    stockholders&#146; meeting.
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    by Blair, prior to the adoption of the merger agreement by our
    stockholders, if our board of directors approves a superior
    proposal in accordance with the terms of the merger agreement;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    By Appleseed&#146;s or BLR Acquisition, if
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="8%"></TD>
    <TD width="2%"></TD>
    <TD width="90%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our board of directors withdraws or modifies in a manner adverse
    to Appleseed&#146;s or BLR Acquisition its recommendation that
    Blair&#146;s stockholders adopt the merger agreement,
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our board of directors fails within two (2)&#160;business days
    of Appleseed&#146;s or BLR Acquisition&#146;s written request to
    reaffirm its recommendation of the merger agreement,
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our board of directors approves or recommends to Blair&#146;s
    stockholders, or takes no position with respect to or fails to
    recommend against acceptance of any acquisition proposal,&#160;or
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Blair fails to call a special meeting of Blair stockholders
    within 35&#160;days of mailing this proxy statement or fails to
    mail this proxy statement within five days after it is cleared
    by the SEC.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Termination
    Fees (Page&#160;37)</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We will be required to pay Appleseed&#146;s a termination fee of
    $6.0&#160;million and reimburse Appleseed&#146;s for reasonable
    actual expenses if the merger agreement is terminated under
    certain circumstances. We must reimburse Appleseed&#146;s for
    reasonable actual expenses if the merger agreement is terminated
    under certain other circumstances. Appleseed&#146;s will be
    required to pay us a termination fee of approximately
    $6.0&#160;million if the merger agreement is terminated under
    certain circumstances.
</DIV>
</DIV><!-- End box 1 -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    5
</DIV><!-- END LOGICAL PAGE -->
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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->
<DIV style="width: 100%; height: 9in; border-top: 1px solid #000000; padding-top: 12pt; border-right: 1px solid #000000; padding-right: 12pt; border-bottom: 1px solid #000000; padding-bottom: 12pt; border-left: 1px solid #000000; padding-left: 12pt"><!-- Begin box 1 -->

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Interests
    of our Directors and Executive Officers in the Merger
    (Page&#160;38)</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In considering the recommendation of the board of directors with
    respect to the merger, you should be aware that some of our
    directors and executive officers have interests in the merger
    that may be different from, or in addition to, the interests of
    our stockholders generally. These interests, to the extent
    material, are described below under &#147;The Merger&#160;&#151;
    Interests of Our Directors and Executive Officers in the
    Merger.&#148; Our board of directors was aware of these
    interests and considered them, among other matters, in approving
    the merger agreement and the transactions contemplated by the
    merger agreement.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Shares&#160;Held
    by Directors and Executive Officers (Page&#160;49)</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As of the record date, our directors and executive officers
    beneficially owned approximately 7.59% of the outstanding shares
    of our common stock entitled to vote at the special meeting.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Material
    Federal Income Tax Consequences of the Merger
    (Page&#160;42)</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The merger will be a taxable transaction for United States
    federal income tax purposes to you. In general, with respect to
    each share of our common stock owned, a stockholder will
    recognize gain or loss as a result of the stockholder&#146;s
    receipt of the merger consideration equal to the difference
    between the merger consideration per share of our common stock
    exchanged in the merger and the stockholder&#146;s adjusted tax
    basis in that share. Such gain or loss will be capital gain or
    loss if such share is a capital asset in the hands of the
    stockholder and will be long-term gain or loss if the
    stockholder has held such share for more than twelve
    (12)&#160;months as of the effective time of the merger.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We strongly urge you to consult your own tax advisor as to the
    specific tax consequences to you of the merger, including the
    applicability and effect of United States federal, state, local
    and foreign income and other tax laws, in view of your
    particular circumstances.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Market
    Price Information (Page&#160;48)</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our common stock is listed on the American Stock Exchange under
    the symbol &#147;BL.&#148; On January&#160;22, 2007, the last
    trading day preceding public announcement of the merger, the
    closing share price of our common stock was $36.95. On
    March&#160;19, 2007, the last practicable trading date before
    the printing of this proxy statement, the closing share price of
    our common stock was $41.45.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Appraisal
    Rights (Page&#160;44)</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Delaware law provides you with appraisal rights in the merger.
    This means that if you are not satisfied with the amount you are
    receiving in the merger, you are entitled to have the fair value
    of your shares determined by the Delaware Court of Chancery and
    to receive payment based on that valuation. The ultimate amount
    you receive as a dissenting stockholder in an appraisal
    proceeding may be more or less than, or the same as, the amount
    you would have received in the merger. To exercise your
    appraisal rights, you must deliver a written demand for
    appraisal to Blair before the merger agreement is voted on at
    the special meeting and you must not vote in favor of the
    adoption of the merger agreement. Your failure to follow exactly
    the procedures specified under Delaware law will result in the
    loss of your appraisal rights.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Contact
    for Our Stockholders Regarding Questions and Requests
    (Page&#160;12)</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If our stockholders have more questions about the merger or how
    to submit their proxy, or if they need additional copies of the
    proxy statement or the enclosed proxy card, they should contact
    our proxy solicitor, Georgeson Shareholder Communications, Inc.,
    at (866) 229-8451.
</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>
</DIV><!-- End box 1 -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    6
</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->
<A name='103'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">QUESTIONS
    AND ANSWERS<BR>
    ABOUT THE MERGER</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following questions and answers briefly address some
    questions you may have regarding the special meeting and the
    proposed merger. These questions and answers may not address all
    questions that may be important to you as a stockholder of our
    company. Please refer to the more detailed information contained
    elsewhere in this proxy statement, the appendices to this proxy
    statement and the documents referred to or incorporated by
    reference in this proxy statement.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Q:&#160;What
    matters will be voted on at the special meeting?</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A:&#160;You will be asked to consider and vote on the following
    proposals:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    to adopt the merger agreement;&#160;and
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    to approve the adjournment of the special meeting, if necessary
    or appropriate, to solicit additional proxies if there are
    insufficient votes at the time of the meeting to adopt the
    merger agreement.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Q:&#160;What
    effect will the merger have on our company?</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A:&#160;If the merger is completed, we will be wholly-owned by
    Appleseed&#146;s and our common stock will no longer be publicly
    traded.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Q:&#160;What
    will I receive in the merger?</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A:&#160;If the merger is completed, you will be entitled to
    receive $42.50 in cash, referred to as the merger consideration,
    without interest and less any applicable withholding taxes, for
    each share of our common stock you own at the effective time of
    the merger. For example, if you own 100&#160;shares of our
    common stock, you will be entitled to receive $4250.00 in cash,
    less any applicable withholding taxes, in exchange for those
    shares.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Q:&#160;What
    vote is needed to adopt the merger agreement and authorize the
    merger?</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A:&#160;The affirmative vote of a majority of the outstanding
    shares of our common stock entitled to be cast at the special
    meeting is required to adopt the merger agreement. Each holder
    of our common stock is entitled to one vote per share. Proxies
    returned to us, if properly signed and dated but not marked to
    indicate your voting preference, will be counted as votes
    &#147;FOR&#148; the proposal to adopt of the merger agreement.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Q:&#160;What
    vote is required from our stockholders to approve the proposal
    to adjourn the special meeting, if necessary or appropriate, to
    solicit additional proxies?</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A:&#160;The proposal to adjourn the special meeting, if
    necessary or appropriate, to solicit additional proxies requires
    the affirmative vote of a majority of the shares of our common
    stock present in person or by proxy at the special meeting.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Q:&#160;Who
    is soliciting my vote?</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A:&#160;This proxy solicitation is being made and paid for by
    us. In addition, we have retained Georgeson Shareholder
    Communications to assist in the solicitation. We will pay
    Georgeson Shareholder Communications approximately $20,000 plus
    <FONT style="white-space: nowrap">out-of-pocket</FONT>
    expenses for its assistance. Our directors, officers and
    employees may also solicit proxies by personal interview, mail,
    <FONT style="white-space: nowrap">e-mail,</FONT>
    telephone, facsimile or by other means of communication. These
    persons will not be paid additional remuneration for their
    efforts. We will also request brokers and other fiduciaries to
    forward proxy solicitation materials to the beneficial owners of
    shares of Blair common stock that such brokers and fiduciaries
    hold of record. We will remunerate them for their reasonable
    expenses.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Q:&#160;How
    does Blair&#146;s Board of Directors recommend that I
    vote?</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A:&#160;Our Board of Directors unanimously recommends that our
    stockholders vote &#147;<B>FOR</B>&#148; the adoption of the
    merger agreement and &#147;<B>FOR</B>&#148; the adjournment
    proposal.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Q:&#160;Who
    is entitled to attend the special meeting?</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A:&#160;All of our stockholders are invited to attend the
    special meeting. Our stockholders of record on March&#160;16,
    2007 can vote in person at the special meeting.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    7
</DIV><!-- END LOGICAL PAGE -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Q:&#160;Do
    I need to attend the special meeting in person in order to
    vote?</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A:&#160;No.&#160;You do not have to attend the special meeting
    in order to vote your shares of our common stock. Your shares
    can be voted at the special meeting without attending by mailing
    your completed, dated and signed proxy card in the enclosed
    postage-paid return envelope or by authorizing the individuals
    named on the proxy card to vote your shares by calling the
    toll-free telephone number or by using the Internet as described
    in the instructions included with the proxy card.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Q:&#160;May
    I vote in person?</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A:&#160;Yes.&#160;If your shares are not held in street name
    through a broker or bank you may attend the special meeting and
    vote your shares in person. If your shares are held in street
    name, then you must get a proxy from your broker or bank to
    attend the special meeting and vote.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Q:&#160;What
    do I need to do now?</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A:&#160;We urge you to read this proxy statement carefully,
    including each appendix, and to consider how the merger affects
    you. Then, sign, date and mail your proxy card in the enclosed
    postage-paid return envelope or authorize the individuals named
    on the proxy card to vote your shares by calling the toll-free
    telephone number or by using the Internet as described in the
    instructions included with the proxy card as soon as possible.
    This will enable your shares to be represented and voted at the
    special meeting. If you sign and send in your proxy card and do
    not indicate how you want to vote, your proxy card will be
    counted as a vote in favor of the proposal to adopt the merger
    agreement.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Q:&#160;What
    happens if I do not return a proxy card by mail, vote by
    telephone or the Internet or vote in person at the special
    meeting?</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A:&#160;If you fail to return your proxy card by mail, do not
    vote by telephone or the Internet or do not vote in person at
    the special meeting, your shares will not be counted for
    purposes of determining whether a quorum is present at the
    special meeting. <B>In addition, the failure to return your
    proxy card by mail, to cast your vote by telephone or the
    Internet or vote in person at the special meeting will have the
    same effect as voting against the proposal to adopt the merger
    agreement.</B>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Q:&#160;If
    my shares are held in street name by my broker or bank, will my
    broker or bank automatically vote my shares for me?</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A:&#160;No.&#160;Your broker, bank or other nominee will not be
    able to vote shares held by it in &#147;street name&#148; on
    your behalf without instructions from you. You should instruct
    your broker, bank or other nominee to vote your shares,
    following the directions your broker, bank or other nominee
    provides.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Q:&#160;What
    if I fail to instruct my broker or bank?</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A:&#160;Failure to vote, including the failure to give your
    broker, bank or other nominee instructions, will have the same
    effect as voting against the proposal to adopt the merger
    agreement.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Q:&#160;May
    I change my vote after I have mailed my signed proxy card or
    cast my vote by telephone or the Internet?</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A:&#160;Yes.&#160;You may change your vote at any time before
    your proxy is voted at the special meeting. You can do this in
    one of three ways. First, you can send a written, dated notice
    to our Secretary stating that you would like to revoke your
    proxy. Second, you can complete, date, and submit a new proxy
    card by mail or cast your vote by telephone or the Internet, and
    any earlier dated proxies will be revoked automatically. Third,
    you can attend the special meeting and vote in person. Your
    attendance alone will not revoke your proxy. If you have
    instructed a broker, bank or other nominee to vote your shares,
    you must follow directions received from your broker, bank or
    other nominee to change your vote.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Q:&#160;What
    does it mean if I get more than one proxy card?</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A:&#160;If your shares are registered differently and are in
    more than one account, you will receive more than one card.
    Please complete and return all of the proxy cards you receive to
    ensure that all of your shares are voted.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    8
</DIV><!-- END LOGICAL PAGE -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Q:&#160;Should
    I send in my stock certificates now?</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A:&#160;No.&#160;After the merger is completed, you will receive
    written instructions for exchanging your shares of our common
    stock for the merger consideration of $42.50 in cash, without
    interest and less applicable withholding taxes, for each share
    of our common stock that you own at the effective time of the
    merger. DO NOT SEND ANY STOCK CERTIFICATES WITH YOUR PROXY.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Q:&#160;When
    do you expect to complete the merger?</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A:&#160;We are working toward completing the merger as quickly
    as possible and we anticipate that it will be completed in the
    Spring of 2007, subject to the receipt of stockholder approval
    and satisfaction of the other closing conditions under the
    merger agreement.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Q:&#160;What
    if the merger is not completed?</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A:&#160;If the merger is not completed, we will continue our
    current operations and will remain a publicly held company and
    you will not receive any of the merger consideration.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Q:&#160;Will
    the merger be a taxable transaction for me?</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A:&#160;If you are a U.S.&#160;taxpayer, for United States
    federal income tax purposes and under most state and local tax
    laws, your receipt of the merger consideration will be treated
    as a taxable sale of our common stock held by you. See &#147;The
    Merger&#160;&#151; Material Federal Income Tax Consequences of
    the Merger.&#148;
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Q:&#160;What
    about payment of dividends through closing?</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A:&#160;The merger agreement does not permit us to pay regular
    quarterly dividends from January&#160;23, 2007 through the date
    the merger is completed. If the merger is not completed and the
    merger agreement terminated, it is expected that we will
    continue with regular quarterly dividends.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Q:&#160;Am
    I entitled to appraisal rights?</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A:&#160;Yes.&#160;If you are a stockholder who objects to the
    merger, and if you comply with the required procedures under
    Delaware law, you will be entitled to appraisal rights under
    Delaware law. See &#147;The Merger&#160;&#151; Appraisal
    Rights.&#148;
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Q:&#160;Whom
    should I call with questions?</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A:&#160;If you would like additional copies, without charge, of
    this proxy statement or if you have questions about the merger,
    including the procedures for voting your shares, you should
    contact our proxy solicitor, Georgeson Shareholder
    Communications, Inc., toll free at
    <FONT style="white-space: nowrap">(866)&#160;229-8451.</FONT>
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    9
</DIV><!-- END LOGICAL PAGE -->
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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->
<A name='104'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">THE
    SPECIAL MEETING</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We are furnishing this proxy statement to our stockholders as
    part of the solicitation of proxies by our board of directors
    for use at the special meeting, and at any adjournment of the
    special meeting.
</DIV>
<A name='105'>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Date,
    Time and Place</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We will hold the special meeting on April&#160;24, 2007 at
    11:00&#160;a.m., Eastern Daylight Time, at The Library Theatre,
    302 Third Avenue West, Warren, Pennsylvania.
</DIV>
<A name='106'>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Matters
    to be Considered</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    At the special meeting, stockholders will be asked to consider
    and vote upon:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    a proposal to adopt the merger agreement;&#160;and
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    a proposal to grant discretionary authority to adjourn the
    special meeting if necessary or appropriate to permit further
    solicitation of additional proxies if there are not sufficient
    votes at the time of the special meeting to adopt the merger
    agreement.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Pursuant to Delaware law and our bylaws, no matter other than
    the proposals to adopt the merger agreement and, if deemed
    necessary, to adjourn the special meeting to permit further
    solicitation, will be brought before the special meeting.
</DIV>
<A name='107'>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Shares&#160;Outstanding
    and Entitled to Vote; Record Date</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The close of business on March&#160;16, 2007 has been fixed by
    our board of directors as the record date for the determination
    of holders of our common stock entitled to notice of, and to
    vote at, the special meeting and any adjournment of the special
    meeting. At the close of business on the record date, there were
    3,854,287&#160;shares of our common stock outstanding and
    entitled to vote held by approximately 1,778 holders of record.
    Each share of our common stock entitles the holder to one vote
    at the special meeting on all matters properly presented at the
    special meeting.
</DIV>
<A name='108'>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Votes
    Required</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A quorum, consisting of the holders of a majority of the shares
    of our common stock entitled to vote as of the record date, must
    be present in person or by proxy before any action may be taken
    at the special meeting. Shares of our common stock represented
    at the special meeting but not voting, including shares of our
    common stock for which proxies have been received but for which
    stockholders have abstained, will be treated as present at the
    special meeting for purpose of determining the presence or
    absence of a quorum for the transaction of all business at the
    special meeting but will not be counted as votes cast. Holders
    of record of our common stock on the record date are entitled to
    one vote per share on each matter to be considered at the
    special meeting.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The proposal to adopt the merger agreement requires the
    affirmative vote of a majority of the shares of our common stock
    outstanding on the record date and entitled to be cast at the
    special meeting. If a holder of our common stock abstains from
    voting or does not vote, either in person or by proxy, it will
    have the effect of a vote against the proposal to adopt the
    merger agreement. If you hold your shares in &#147;street
    name&#148; through a broker, bank or other nominee, you must
    direct your broker, bank or other nominee to vote in accordance
    with the instructions you have received from your broker, bank
    or other nominee. Brokers, banks or other nominees who hold
    shares of our common stock in street name for customers who are
    the beneficial owners of those shares may not give a proxy to
    vote those customers&#146; shares in the absence of specific
    instructions from those customers. These non-voted shares will
    have the effect of votes against the proposal to adopt the
    merger agreement.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The proposal to approve adjournments of the special meeting if
    deemed necessary or appropriate to permit the solicitation of
    additional proxies if there are not sufficient votes at the time
    of the special meeting to adopt the merger agreement, requires
    the affirmative vote of a majority of the shares of our common
    stock represented in person or by proxy at the special meeting,
    even if less than a quorum. Accordingly, not voting at the
    special meeting will have no effect on the outcome of this
    proposal, but abstentions will have the same effect as a vote
    against this proposal.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    10
</DIV><!-- END LOGICAL PAGE -->
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->
<A name='109'>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">How to
    Vote Your Shares</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our stockholders of record may vote by mail, telephone, Internet
    or by attending the special meeting and voting in person. If you
    choose to vote by mail, simply mark the enclosed proxy card,
    date and sign it, and return it in the postage-paid return
    envelope provided. Delaware law permits electronic submission of
    proxies through the Internet or by telephone, instead of
    submitting proxies by mail on the enclosed proxy card. Thus, our
    stockholders of record have the option of submitting their
    proxies electronically through the Internet or by telephone as
    described in the instructions included with the proxy card.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If your shares are held in the name of a bank, broker or other
    holder of record, you will receive instructions from the holder
    of record that you must follow in order for your shares to be
    voted. Also, please note that if the holder of record of your
    shares is a broker, bank or other nominee and you wish to vote
    at the special meeting, you must bring a letter from the broker,
    bank or other nominee confirming that you are the beneficial
    owner of the shares.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The grant of a proxy on the enclosed form of proxy does not
    preclude a stockholder from voting in person at the special
    meeting. A stockholder may revoke a proxy at any time prior to
    its exercise by:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    delivering, prior to the special meeting, a written notice of
    revocation addressed to Herbert G. Hotchkiss, Corporate
    Secretary, Blair Corporation, 220 Hickory Street, Warren,
    Pennsylvania 16366;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    submitting, prior to the special meeting, a properly executed
    proxy with a later date;&#160;or
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    attending the special meeting and voting in person (however,
    attendance at the special meeting will not, in and of itself,
    constitute revocation of a proxy).
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If you have instructed your bank, broker or other nominee to
    vote your shares, you must follow directions received from your
    bank, broker or other nominee to change or revoke your proxy.
</DIV>
<A name='110'>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Voting of
    Proxies</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    All shares represented by properly executed proxies received
    prior to the special meeting (and not revoked) will be voted at
    the special meeting in the manner specified by the holders
    thereof. Properly executed proxies that do not contain voting
    instructions will be voted FOR the proposal to adopt the merger
    agreement and FOR approval of adjournment of the special meeting
    if deemed necessary or appropriate to permit the solicitation of
    additional proxies if there are not sufficient votes at the time
    of the special meeting to adopt the merger agreement. No proxy
    that is specifically marked AGAINST the proposal to adopt the
    merger agreement will be voted in favor of the adjournment
    proposal, unless it is specifically marked FOR the proposal to
    adjourn the special meeting to a later date.
</DIV>
<A name='111'>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Solicitation
    of Proxies</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    All costs related to the solicitation of proxies, including the
    printing and mailing of this proxy statement, will be borne by
    us. We have retained Georgeson Shareholder Communications, Inc.
    to aid in the solicitation of proxies and to verify records
    relating to the solicitation. Georgeson Shareholder
    Communications, Inc. will receive a fee for its services of
    $20,000 and expense reimbursement. In addition to solicitation
    by mail, our directors, officers and employees may solicit
    proxies from stockholders in person or by telephone, telegram,
    facsimile, or other electronic methods, without additional
    compensation other than reimbursement for their actual expenses.
    However, you should be aware that certain members of our board
    of directors and our officers have interests in the merger that
    are different from, or in addition to, yours. See &#147;The
    Merger&#160;&#151; Interests of Our Directors and Executive
    Officers in the Merger&#148; beginning on page&#160;38.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Arrangements also will be made with custodians, nominees and
    fiduciaries to forward solicitation material to the beneficial
    owners of stock held of record by such persons, and we will
    reimburse such custodians, nominees and fiduciaries for their
    reasonable
    <FONT style="white-space: nowrap">out-of-pocket</FONT>
    expenses in connection with these arrangements.
</DIV>
<A name='112'>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Stock
    Certificates</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Stockholders should not send stock certificates with their
    proxies. A letter of transmittal with instructions for the
    surrender of our common stock certificates will be mailed to our
    stockholders as soon as practicable after completion of the
    merger.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    11
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->
<A name='113'>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Recommendation
    of Our Board of Directors</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our board of directors has adopted resolutions:
    (i)&#160;approving the merger agreement; (ii)&#160;determining
    that the merger agreement and the terms and conditions of the
    merger are fair to, advisable and in the best interests of our
    company and our stockholders; and (iii)&#160;directing that the
    merger agreement be submitted for adoption at a special meeting
    of our stockholders. <B>Our board of directors unanimously
    recommends that all of our stockholders vote &#147;FOR&#148; the
    proposal to adopt the merger agreement. Our board of directors
    also unanimously recommends that our stockholders vote
    &#147;FOR&#148; approval of adjournment of the special meeting
    if deemed necessary or appropriate to facilitate the
    solicitation of additional proxies if there are not sufficient
    votes at the time of the special meeting to adopt the merger
    agreement.</B> See &#147;The Merger&#160;&#151; Our Reasons for
    the Merger&#148; beginning on page&#160;16.
</DIV>
<A name='114'>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Contact
    for Our Stockholders Regarding Questions and Requests</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If our stockholders have more questions about the merger
    agreement or the merger or how to submit their proxy, or if they
    need additional copies of the proxy statement or the enclosed
    proxy card, they should contact our proxy solicitor, Georgeson
    Shareholder Communications, Inc. at (866) 229-8451.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    12
</DIV><!-- END LOGICAL PAGE -->
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->
<A name='115'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">THE
    MERGER</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>The following information describes the material aspects of
    the merger agreement and the merger. This description does not
    purport to be complete and is qualified in its entirety by
    reference to the appendices to this document, including the
    merger agreement. Our stockholders are urged to carefully read
    the appendices in their entirety.</I>
</DIV>
<A name='170'>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Parties
    to the Merger</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Blair.</I>&#160;&#160;We are a national catalog and
    multi-channel direct marketer of women&#146;s and men&#146;s
    apparel and home products. We sell a broad range of women&#146;s
    and men&#146;s apparel and home products through direct mail
    marketing and through our Web site <U>www.blair.com</U>. Blair
    employs approximately 1,900 associates (worldwide) and operates
    facilities and retail outlets in Northwestern Pennsylvania and
    Wilmington, Delaware. Our principal executive offices are
    located at 220 Hickory Street, Warren, Pennsylvania 16366 and
    our telephone number is
    <FONT style="white-space: nowrap">(814)&#160;723-3600.</FONT>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Appleseed&#146;s.</I>&#160;&#160;Appleseed&#146;s is a
    portfolio company of Golden Gate, a leading private equity firm,
    and is a leading, multi-channel marketer of apparel and home
    products focused on serving the needs of the women and men above
    the age of 50. Appleseed&#146;s provides products to consumers
    through the direct channels of catalog, internet and retail.
    Appleseed&#146;s is comprised of the brands Appleseed&#146;s,
    Draper&#146;s&#160;&#38; Damon&#146;s, Haband, Norm Thompson,
    Sahalie, Solutions and The Tog Shop. Appleseed&#146;s principal
    executive offices are located at 30 Tozer Road, Beverly,
    Massachusetts 01915 and its telephone number is
    <FONT style="white-space: nowrap">(978)&#160;922-2040.</FONT>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>BLR Acquisition.</I>&#160;&#160;BLR Acquisition is a
    wholly-owned subsidiary of Appleseed&#146;s organized under the
    laws of Delaware. It was incorporated solely for the purposes of
    the merger and is engaged in no other business other than those
    incidental to its formation and in connection with the
    transactions contemplated by the merger agreement. BLR
    Acquisition&#146;s principal executive offices are located at 30
    Tozer Road, Beverly, Massachusetts 01915 and its telephone
    number is
    <FONT style="white-space: nowrap">(978)&#160;922-2040.</FONT>
</DIV>
<A name='116'>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Description
    of the Merger</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our board of directors has unanimously approved the merger
    whereby our company will become a wholly-owned subsidiary of
    Appleseed&#146;s. If the merger agreement is adopted and the
    merger completed, BLR Acquisition will merge with and into
    Blair, with Blair as the surviving corporation in the merger. If
    the merger is completed, unless you have properly exercised your
    appraisal rights with respect to the merger, you will be
    entitled to receive the merger consideration of $42.50, without
    interest and less applicable withholding taxes, in exchange for
    each share of our common stock that you own at the effective
    time of the merger. We encourage you to read carefully the
    merger agreement in its entirety, a copy of which is attached as
    Appendix&#160;A to this proxy statement, because it is the legal
    document that governs the merger.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    After the merger is completed, you will have the right to
    receive the merger consideration but you will no longer have any
    rights as a stockholder of Blair. You will receive your portion
    of the merger consideration after exchanging your stock
    certificates representing our common stock in accordance with
    the instructions contained in a letter of transmittal to be sent
    to you shortly after completion of the merger.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our common stock is currently registered under the Exchange Act
    and is listed on the American Stock Exchange under the symbol
    &#147;BL.&#148; Following the merger, our common stock will be
    delisted from the American Stock Exchange and will no longer be
    publicly traded, and the registration of our common stock under
    the Exchange Act will be terminated.
</DIV>
<A name='117'>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Background
    of the Merger</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our board of directors has periodically discussed and reviewed
    our business, strategic direction, performance and prospects in
    the context of developments in the women&#146;s and men&#146;s
    apparel and home products industry and the competitive landscape
    in the industry in which we operate. As a result, our board of
    directors has also at times discussed with senior management
    various potential strategic alternatives involving possible
    acquisitions or business combinations that could complement and
    enhance our competitive strengths and strategic position and
    increase stockholder value. To assist us in these deliberations,
    the board and management hired two advisors: Tucker Alexander to
    help with acquisitions, and Stephens to help explore strategic
    alternatives. In this regard, our management has from time to
    time communicated informally with representatives of other
    similar entities,
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    13
</DIV><!-- END LOGICAL PAGE -->
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    including Appleseed&#146;s, regarding industry trends and
    issues, their respective companies&#146; strategic direction and
    the potential benefits and issues arising from a potential
    business combination or other strategic transaction. No business
    combinations or other strategic transaction resulted from any of
    these efforts. As part of this evaluation, we signed letters of
    intent on two separate occasions to acquire Appleseed&#146;s
    between the years of 2001 and 2003. In both instances, the
    proposed transactions never advanced beyond the due diligence
    stage.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In November of 2005, Appleseed&#146;s was acquired by affiliates
    of Golden Gate. Shortly thereafter, in January of 2006, John
    Zawacki, our President and Chief Executive Officer at the time,
    now our Vice Chairman, contacted Neale Attenborough, Chief
    Executive Officer of Appleseed&#146;s, to see if he had any
    interest in potentially joining our management team.
    Mr.&#160;Attenborough indicated that he was happy in his current
    position with Appleseed&#146;s.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    From January 2006 to April 2006, Mr.&#160;Attenborough contacted
    Mr.&#160;Zawacki several times to try to arrange meetings to
    discuss potential strategic alternatives with us. On
    April&#160;18, 2006, Mr.&#160;Attenborough and Mr.&#160;Zawacki
    met in Jamestown, New York. At this meeting,
    Mr.&#160;Attenborough outlined how he believed that Blair would
    be a significant strategic fit for the platform of multi-channel
    apparel entities that Golden Gate was building. Following that
    meeting, Mr.&#160;Attenborough contacted Mr.&#160;Zawacki
    several times to see if we were interested in pursuing a
    potential strategic transaction. During that period of time, we
    continued to evaluate other acquisition candidates.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In May of 2006, as part of the process of pursuing potential
    acquisition candidates, Tucker Alexander contacted Stefan
    Kaluzny, a managing director of Golden Gate, and inquired
    whether Golden Gate would be interested in selling
    Appleseed&#146;s or one of their other portfolio companies to
    us. Mr.&#160;Kaluzny stated that Golden Gate was not interested
    in selling either Appleseed&#146;s or any of its other portfolio
    companies to us. However, Mr.&#160;Kaluzny subsequently made it
    clear that Golden Gate was interested in acquiring Blair.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Over the next few months no discussions between the parties
    occurred. We continued to evaluate our strategic alternatives
    but did not consummate any business combinations or other
    strategic transactions. In August of 2006, Mr.&#160;Kaluzny
    expressed to Tucker Alexander that Golden Gate was interested in
    negotiating an acquisition of Blair. If Blair was not interested
    in negotiating a transaction, Mr.&#160;Kaluzny informed Tucker
    Alexander that Golden Gate might consider various alternatives,
    including a tender offer.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    During the period from September to November 2006, our board and
    management continued to evaluate our business strategy and
    strategic alternatives for the future. However, we did not
    consummate any business combination or strategic transaction
    during this time. On November&#160;13, 2006, Craig Johnson, our
    Chairman of the Board, and Mr.&#160;Zawacki met with
    Mr.&#160;Attenborough and Mr.&#160;Kaluzny in Pittsburgh,
    Pennsylvania. During that meeting, Mr.&#160;Kaluzny and
    Mr.&#160;Attenborough set forth the strategic direction for
    Appleseed&#146;s and again stated their interest in adding Blair
    to the Golden Gate portfolio. No specific offer was made at that
    time and we communicated to Messrs.&#160;Kaluzny and
    Attenborough that we were not interested in being acquired at
    that time. Following this meeting until January&#160;2, 2007,
    there were no discussions between us and Golden Gate or
    Appleseed&#146;s.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    On January&#160;2, 2007, Mr.&#160;Attenborough contacted
    Mr.&#160;Zawacki to state that he would be faxing
    Mr.&#160;Zawacki and Mr.&#160;Johnson a letter offering to
    acquire Blair. On January&#160;3, 2007, we received a letter
    from Appleseed&#146;s offering to acquire all of the outstanding
    shares of our company&#146;s common stock for $37.50 per share
    in cash. The letter also stated that if we did not respond
    within two days, Appleseed&#146;s reserved the right to make the
    offer to acquire Blair public, as well as take such actions as
    commencing a cash tender offer and proposing its nominees as
    directors.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    After consulting our outside legal counsel, Patton Boggs LLP,
    and our investment advisor, Stephens, on January&#160;5, 2007,
    Stephens contacted Mr.&#160;Attenborough to arrange a meeting on
    January&#160;9, 2007. On January&#160;8, 2007, our board of
    directors met with legal counsel and Stephens to review the
    Appleseed&#146;s offer, which it determined to be inadequate and
    discussed potential strategic alternatives and defensive
    measures.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    On January&#160;9, 2007, Mr.&#160;Kaluzny,
    Mr.&#160;Attenborough, Mr.&#160;Johnson, Adelmo S. Lopez, our
    Executive Vice President and Chief Operating Officer at the time
    (now our President and Chief Executive Officer), and
    representatives of Stephens met in New York to discuss the
    Appleseed&#146;s offer. At that meeting, Mr.&#160;Kaluzny
    informed us that Appleseed&#146;s and its affiliates had
    acquired over 5% of our stock and that they remained very
    interested in acquiring Blair, including by tender offer if an
    agreement could not be reached with our board. We informed him
    that our board of directors believed the offer of $37.50 per
    share did not represent sufficient consideration.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    14
</DIV><!-- END LOGICAL PAGE -->
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    On January&#160;10, 2007, Mr.&#160;Kaluzny contacted Stephens
    and increased the offer to purchase Blair to $39.00&#160;per
    share in cash. On January&#160;11, 2007, our board of directors
    met to evaluate this proposal and potential strategic
    alternatives. At that meeting, the board considered potential
    defensive measures and authorized Stephens to contact parties
    that had previously expressed an intention to acquire Blair.
    These parties responded that they were either not interested in
    such a transaction or not interested in such a transaction at
    the price being offered by Appleseed&#146;s. Additionally, our
    board agreed to meet with Mr.&#160;Kaluzny and
    Mr.&#160;Attenborough to discuss Appleseed&#146;s offer.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    On January&#160;14, 2007, Mr.&#160;Kaluzny and
    Mr.&#160;Attenborough met with our board of directors, in Erie,
    Pennsylvania, regarding their offer. At that meeting,
    Mr.&#160;Kaluzny and Mr.&#160;Attenborough again discussed
    Golden Gate&#146;s portfolio of companies and the plans for
    Blair following the proposed acquisition. Following the
    presentation, our board of directors met and went through a
    detailed analysis with Stephens regarding the $39.00&#160;per
    share offer. The board of directors specifically rejected the
    $39.00&#160;per share offer because it did not represent
    sufficient consideration.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    On January&#160;15, 2007, Mr.&#160;Kaluzny raised the
    Appleseed&#146;s offer to $41.50 per share in cash and
    stipulated that the offer must be accepted by January&#160;18,
    2007 or Appleseed&#146;s would commence a tender offer. On the
    same day, our board of directors met and directed Stephens to
    continue to negotiate with Appleseed&#146;s to obtain a higher
    price and the right to shop for other potential buyers for Blair
    following signing of a merger agreement, also referred to as a
    &#147;Go Shop&#148; provision.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    On January&#160;16, 2007, Appleseed&#146;s raised its offer to
    $42.50&#160;per share and agreed to the concept of a Go Shop
    provision in the merger agreement. Our board of directors held
    another meeting and authorized management to negotiate a merger
    agreement, including those terms. During the period of
    January&#160;17, 2007 through January&#160;22, 2007, the parties
    negotiated the specific terms of the merger agreement. On
    January&#160;18, 2007, Golden Gate, Appleseed&#146;s and certain
    of their affiliates filed a Schedule&#160;13D with the SEC
    stating that they owned approximately 8.1% of our common stock,
    they had previously made an offer to acquire our company for
    $37.50&#160;per share in cash and that they were in negotiations
    with us. On that same day, we also issued a press release
    stating that we had received their offer and that we were in
    discussions with them.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    During the course of negotiations, the board of directors was
    kept apprised of important details of the negotiations by our
    financial advisor and legal counsel. At one point during the
    course of negotiations, Appleseed&#146;s lowered its offer to
    $41.50&#160;per share in cash after receiving certain
    information from us. The board of directors rejected this offer
    and informed Appleseed&#146;s that it would not recommend a deal
    to our stockholders at that price. Appleseed&#146;s subsequently
    raised its offer price to $42.50&#160;per share.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    On the evening of January&#160;22, 2007, our board of directors
    met to consider the fully-negotiated merger agreement. At that
    time, Stephens discussed a range of matters, including the
    amount and form of the merger consideration, the structure of
    the transaction, business and financial information regarding
    the parties, our historical stock price performance, our
    financial performance in 2006 and our prospects for 2007 and
    years thereafter, valuation methodologies and analyses and the
    other matters set forth in &#147;Opinion of Our Financial
    Advisor.&#148; After this discussion, Stephens rendered to our
    board of directors its opinion that, as of the date of the
    meeting and based upon and subject to the considerations
    described in its opinion, the proposed $42.50&#160;per share
    cash merger consideration was fair, from a financial point of
    view, to holders of our common stock. Patton Boggs LLP, our
    outside legal counsel, then discussed with our board of
    directors matters relating to the proposed merger and related
    agreements. Following these presentations, our board meeting
    continued with discussions and questions among the members of
    the board, management and our legal and financial advisors. The
    meeting was then recessed until the following morning.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    On the morning of January&#160;23, 2007, after further
    discussion, and taking into consideration the factors described
    below under &#147;&#160;&#151; Our Reasons for the Merger,&#148;
    our board determined that the merger presented the best
    potential opportunity and strategic transaction for our company
    and our stockholders and was advisable and in the best interests
    of our company and our stockholders. Our board then unanimously
    approved and adopted the merger agreement and unanimously
    resolved to recommend that our stockholders vote to adopt the
    merger agreement. Following approval by our board of directors,
    the parties executed the merger agreement and, then, on
    January&#160;23, 2007, publicly announced the transaction by
    joint press release.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    During the period from January&#160;23, 2007 through
    February&#160;22, 2007, under the supervision of our board of
    directors, representatives of Stephens contacted
    35&#160;potential strategic acquirors and 58&#160;potential
    financial acquirors. Of these 93&#160;parties, 4&#160;entered
    into a non-disclosure agreements with Blair. However, as of the
    date of this proxy statement, no party has submitted a proposal
    to pursue a transaction with Blair.
</DIV>

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    <BR>
    15
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    On January&#160;25, 2007, Mr.&#160;Seymour Holtzman, as a
    representative of a group of stockholders, filed a
    Schedule&#160;13D with the SEC stating that the group owned 5.1%
    of our common stock. Mr.&#160;Holtzman, as a representative of
    the group, also stated:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    he may attempt to meet with our Board of Directors and
    management in order to maximize shareholder value;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    he requested a stockholder list from us in order to communicate
    with our stockholders; and
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the group, at the time, intended to vote all of their common
    stock against the proposal to adopt the merger agreement.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Following the filing of the Schedule&#160;13D, we corresponded
    with Mr.&#160;Holtzman regarding his request for the stockholder
    list and a request to enter into a confidentiality agreement. As
    of the date of this proxy statement, there has been no other
    correspondence. Additionally, as of the date of this proxy
    statement, Mr.&#160;Holtzman has not met with our Board of
    Directors or management, and to our knowledge, has not
    communicated with our stockholders.
</DIV>
<A name='118'>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Our
    Reasons for the Merger</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our board of directors, at its meetings held on the evening of
    January&#160;22, 2007 and the morning of January&#160;23, 2007,
    considered the merger agreement and unanimously determined it to
    be fair, and in the best interests of our company and our
    stockholders. In evaluating the merger, our board of directors
    consulted with management, as well as our legal and financial
    advisors, and considered a number of factors. Listed below are
    the material factors that our board of directors considered in
    its decision:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the financial terms of the merger, including the fact that,
    based on the closing price of our common stock on the American
    Stock Exchange on September&#160;14, 2006, December&#160;26,
    2006 (four weeks prior to the announcement of the merger
    agreement) and January&#160;22, 2007 (the day prior to
    announcement of the merger agreement), the $42.50&#160;per share
    merger consideration represented premiums of approximately
    79.10%, 31.38% and 15.02%, respectively;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    its review of our business, operations, financial condition and
    earnings on an historical and a prospective basis, including our
    decline in revenue from fiscal 2003 through fiscal 2005 and for
    the nine-months ended September&#160;30, 2006, and our decline
    in EBITDA over the same periods;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the historical trading price of our common stock;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the possible alternatives to the merger, including continuing to
    operate our company on a stand-alone basis or seeking to
    continue to grow through acquisitions, and the risks associated
    with such alternatives;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the risk that our actual financial performance for the year
    ended December&#160;31, 2007 may be materially less than
    management&#146;s financial projections for the year ended
    December&#160;31, 2007, based on our financial performance
    during the prior year and the resultant decrease in our stock
    price, at least in the short to medium term;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the fact that the merger agreement provides us with the ability
    to solicit acquisition proposals for a 30&#160;day period after
    the date the merger agreement was signed, or the &#147;Go Shop
    Period,&#148; as discussed under &#147;&#151;&#160;No
    Solicitation and Go Shop Period&#148; beginning on page&#160;30;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the recent evaluation by our board of directors of our business
    plan and the risks and uncertainties associated with the
    implementation thereof compared to the risks and benefits from
    the merger;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the retail catalog industry trends, competition and challenges
    affecting us, including the increasing importance of scale and
    scope and an increasingly difficult operating cost environment;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the complementary fit of the businesses of Appleseed&#146;s and
    our company, and the expectation that the merger would entail
    minimal disruption for our customers;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the financial presentations of Stephens, including the opinion,
    dated January&#160;22, 2007, to our board of directors as to the
    fairness, from a financial point of view and as of the date of
    the opinion and based upon and subject to the considerations
    described in its opinion, of the $42.50&#160;per share in cash
    to be received by the holders of our common stock in the merger,
    as more fully described under the caption &#147;&#151; Opinion
    of Our Financial Advisor&#148; beginning on page&#160;17;
</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    16
</DIV><!-- END LOGICAL PAGE -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the fact that the merger consideration is all cash so that the
    merger will allow our stockholders to immediately realize a fair
    value, in cash, for their investment and will provide those
    stockholders with certainty of value for their shares;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the terms of the merger agreement, including the absence of a
    financing condition to Appleseed&#146;s obligation to complete
    the merger, the limited number and nature of other conditions to
    Appleseed&#146;s obligation to consummate the merger and the
    limited risk that such conditions would not be satisfied, the
    limited number of regulatory and other approvals required in
    connection with the merger and the likelihood such approvals
    would be received without unacceptable conditions;&#160;and
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the other terms of the merger agreement, including the ability
    of the board of directors to terminate the merger agreement in
    order to accept a superior proposal and the payment of the
    termination fee to Appleseed&#146;s upon any such event, as
    discussed under &#147;&#151;&#160;Termination of the Merger
    Agreement&#148; beginning on page&#160;36 and
    &#147;&#151;&#160;Termination Fees&#148; beginning on
    page&#160;37.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The board of directors also took into account a number of
    potentially adverse factors concerning the merger including,
    without limitation, the following:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the risk that the merger might not be completed in a timely
    manner or at all;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    diverting management focus and resources from other strategic
    opportunities and from operational matters while working to
    implement the merger, and the possibility of management and
    employee disruption associated with the merger;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the merger consideration consists of cash and will therefore be
    taxable to our stockholders for U.S.&#160;federal income tax
    purposes, and because stockholders are receiving cash for their
    stock, they will not participate in the future growth of our
    company;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the requirement that we pay Appleseed&#146;s a termination fee
    and reimburse certain of its expenses in order for the board of
    directors to accept a superior proposal, or under certain other
    circumstances, as discussed in &#147;&#151;&#160;Termination of
    the Merger Agreement&#148; beginning on page&#160;36 and
    &#147;&#151;&#160;Termination Fees&#148; beginning on
    page&#160;37;&#160;and
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the fact that some of our directors and executive officers have
    other financial interests in the merger that are in addition to
    their interests as stockholders, including as a result of
    employment and compensation arrangements with us and the manner
    in which they would be affected by the merger. See
    &#147;&#160;&#151; Interests of Our Directors and Executive
    Officers in the Merger&#148; beginning on page&#160;38.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The foregoing discussion of the factors considered by our board
    of directors in this section &#147;&#151;&#160;Our Reasons for
    the Merger&#148; is not intended to be exhaustive, but, rather,
    includes the material factors considered by our board of
    directors. In reaching its decision to approve the merger
    agreement, the merger and the other transactions contemplated by
    the merger agreement, our board of directors did not quantify or
    assign any relative weights to the factors considered, and
    individual directors may have given different weights to
    different factors. Our board of directors considered all these
    factors as a whole, and, overall, considered the factors to be
    favorable to, and supportive of, its determination.
</DIV>
<A name='119'>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Recommendation
    of the Board of Directors</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    After careful consideration, our board of directors unanimously
    determined that the merger agreement and the merger are in the
    best interests of our company and our stockholders, and approved
    the merger agreement. Our board of directors unanimously
    recommends that you vote &#147;FOR&#148; the proposal to adopt
    the merger agreement.
</DIV>
<A name='120'>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Opinion
    of Our Financial Advisor</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    On October&#160;3, 2006, we hired Stephens, to act as our
    financial advisor with respect to exploring strategic
    alternatives and as a business consultant to evaluate
    operational prospects and to explore financing options available
    to us. On January&#160;9, 2007, we retained Stephens to act as
    our financial advisor to review and analyze strategic
    alternatives related to this transaction. In its role as
    financial advisor, Stephens was requested to furnish an opinion
    as to the fairness, from a financial point of view, to our
    stockholders of the consideration to be offered to those
    stockholders in the merger. On January&#160;22, 2007, Stephens
    rendered its oral and written opinion to our board of
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    17
</DIV><!-- END LOGICAL PAGE -->
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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    directors that as of that date, and based upon and subject to
    certain matters stated in that opinion, from a financial point
    of view, the consideration to be offered to our stockholders in
    the merger was fair to such stockholders.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The full text of Stephens&#146; opinion is attached as
    Appendix&#160;B to this proxy statement. The opinion outlines
    the procedures followed, assumptions made, matters considered
    and qualifications and limitations on the review undertaken by
    Stephens in rendering its opinion. The description of the
    opinion set forth below is qualified in its entirety by
    reference to the opinion. We urge our stockholders to read the
    entire opinion carefully in connection with their consideration
    of the merger.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Stephens&#146; opinion was provided for the information and
    assistance of our board of directors in connection with its
    consideration of the merger. The Stephens&#146; opinion does not
    address any other aspect of the transaction and is not intended
    to be and does not constitute a recommendation to any
    stockholder of Blair as to how that stockholder should vote with
    respect to the merger or any related matter. Stephens was not
    requested to opine as to, and the Stephens&#146; opinion does
    not address, our underlying business decision to proceed with or
    effect the merger, nor does the Stephens opinion address the
    relative merits of the merger with Appleseed&#146;s compared to
    any other business strategies or alternatives that might be
    available to us.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In arriving at its opinion, Stephens reviewed and analyzed:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the merger agreement and the specific terms of the merger;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    publicly available information concerning us that Stephens
    believed to be relevant to its analysis, including our Annual
    Report on Form
    <FONT style="white-space: nowrap">10-K</FONT> for the
    fiscal year ended December&#160;31, 2005, and our Quarterly
    Reports on
    <FONT style="white-space: nowrap">Form&#160;10-Q</FONT>
    for the quarters ended March&#160;31, 2006, June&#160;30, 3006
    and September&#160;30, 2006;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    financial and operating information with respect to our
    business, operations and prospects furnished to it by us,
    including financial projections of Blair prepared by management;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the trading history of our common stock over several different
    periods over the past 10&#160;years;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    a comparison of our historical financial results and present
    financial condition with those of other companies that Stephens
    deemed relevant;&#160;and
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    a comparison of the financial terms of the merger with the
    financial terms of certain other transactions that Stephens
    deemed relevant.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition, Stephens had discussions with our management
    concerning our business, operations, assets, liabilities,
    financial condition and prospects and undertook such other
    studies, analyses and investigations as Stephens deemed
    appropriate.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In arriving at its opinion, Stephens assumed and relied upon the
    accuracy and completeness of the financial and other information
    used by Stephens without assuming any responsibility for
    independent verification of that information. Stephens further
    relied upon the assurances of our management that they were not
    aware of any facts or circumstances that would make that
    information inaccurate or misleading. In arriving at its
    opinion, upon our advice, Stephens assumed that the estimates
    provided by our management were a reasonable basis to evaluate
    our future financial performance and that we would perform
    substantially in accordance with those estimates. In arriving at
    its opinion, Stephens did not conduct a physical inspection of
    our properties and facilities and did not make or obtain any
    evaluations or appraisals of our assets or liabilities.
    Stephens&#146; opinion necessarily was based upon market,
    economic and other conditions as they existed on, and could be
    evaluated as of, the date of the Stephens opinion.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    At the January&#160;22, 2007 meeting of our board of directors,
    Stephens made a presentation of certain financial analyses of
    the merger. The following is a summary of the material
    valuation, financial and comparative analyses in the
    presentation that was delivered to our board of directors by
    Stephens. Some of the summaries of financial analyses include
    information presented in tabular format. In order to fully
    understand the financial analyses performed by Stephens, the
    tables must be read together with the accompanying text of each
    summary. The tables alone do not constitute a complete
    description of the financial analyses, including the
    methodologies and assumptions underlying the analyses, and if
    viewed in isolation could create a misleading or incomplete view
    of the financial analysis performed by Stephens.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Implied Transaction Multiples
    Analysis.</I>&#160;&#160;Stephens calculated and compared
    various implied transaction multiples based on the fully diluted
    equity consideration to be received by the holders of the
    outstanding shares of
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    18
</DIV><!-- END LOGICAL PAGE -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Blair common stock at $42.50&#160;per share, assuming the
    exercise of all the
    <FONT style="white-space: nowrap">in-the-money</FONT>
    options, less the proceeds from such exercise, which is referred
    to in this discussion as equity value, and the sum of
    Blair&#146;s equity value and the net book value of Blair&#146;s
    net debt (which is the sum of Blair&#146;s total debt less cash
    and cash equivalents), which is referred to in this discussion
    as enterprise value. Based on Blair&#146;s financial statement
    projections prepared by management, Stephens calculated the
    following multiples for Blair:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    enterprise value as a multiple of net sales;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    enterprise value as a multiple of earnings before interest and
    taxes, depreciation and amortization which is referred to in
    this discussion as EBITDA;&#160;and
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    enterprise value as a multiple of earnings before interest, and
    taxes, which is referred to in this discussion as EBIT.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Each of the multiples was calculated for each of the projected
    fiscal years 2006 and 2007. The following table sets forth the
    results of this analysis:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>
<DIV style="margin-left: 10%; margin-right: 0%">
<TABLE border="0" width="90%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="76%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="2%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="5%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="3%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="10" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Enterprise Value as a Multiple of:</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Sales</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>EBITDA</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>EBIT</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B><FONT style="font-size: 10pt">FY 2006E</FONT></B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.3
</TD>
<TD nowrap align="left" valign="bottom">
    x
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    31.3
</TD>
<TD nowrap align="left" valign="bottom">
    x
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    NM
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B><FONT style="font-size: 10pt">FY 2007E</FONT></B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.4
</TD>
<TD nowrap align="left" valign="bottom">
    x
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    6.5
</TD>
<TD nowrap align="left" valign="bottom">
    x
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    11.0x
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>
</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Summary of Imputed Share Values.</I>&#160;&#160;Stephens
    assessed the fairness of the per share merger consideration to
    the holders of shares of Blair common stock other than
    Appleseed&#146;s and its affiliates by assessing the value of
    Blair using several methodologies, including an analysis of
    historical stock prices, a comparable companies analysis using
    valuation multiples from selected publicly traded companies, a
    discounted cash flow analysis, a leveraged buyout analysis, a
    normalized margin analysis, a premiums paid analysis, an
    historical one year stock price analysis and a comparable
    acquisitions analysis, each of which is described in more detail
    in the summaries set forth below. Each of these methodologies
    was used to generate imputed valuation ranges that were then
    compared to the per share merger consideration.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following table shows the ranges of imputed valuation per
    common share of Blair derived under each of these methodologies.
    The table should be read together with the more detailed summary
    of each of these valuation analyses as set forth below.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>
<DIV style="margin-left: 10%; margin-right: 0%">
<TABLE border="0" width="90%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="79%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="6%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="6%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="6" nowrap align="center" valign="bottom">
    <B>Imputed Valuation<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="6" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Per Common Share</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Valuation Methodology</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Minimum</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Maximum</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Comparable Companies Analysis
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    15.49
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    75.58
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Comparable Transactions Analysis
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    14.37
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    18.83
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Discounted Cash Flow Analysis
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    33.69
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    41.93
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Premiums Paid Analysis
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    41.38
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    44.69
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Leveraged Buyout Analysis
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    28.45
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    35.30
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Historical One-Year Stock Price
    Analysis
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    23.73
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    46.44
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Normalized Margin Analysis
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    27.82
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    54.24
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>
</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Comparable Companies Analysis.</I>&#160;&#160;Stephens
    analyzed the public market statistics of certain comparable
    companies to us and examined various trading statistics and
    information relating to those companies. As part of this
    comparable companies analysis, Stephens examined market
    multiples for each company including:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the multiple of enterprise value to estimated 2007 revenue;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the multiple of enterprise value to estimated 2006 earnings
    before interest, tax, depreciation and amortization, or
    EBITDA;&#160;and
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the multiple of enterprise value to estimated 2007 EBITDA.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The estimated 2006 and 2007 revenue and EBITDA were obtained
    from various Wall Street research reports. The stock price data
    used for this analysis was the closing price for the selected
    companies on January&#160;19, 2007.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    19
</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Stephens selected the companies below because their businesses
    and operating profiles are reasonably similar to ours. No
    comparable company identified below is identical to us. A
    complete analysis involves complex considerations and
    qualitative judgments concerning differences in financial and
    operating characteristics of the comparable companies and other
    factors that could affect the public trading values of those
    comparable companies. Mathematical analysis (such as determining
    the mean or the median) is not in itself a meaningful method of
    using selected company data.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In choosing comparable companies to analyze, Stephens selected
    the following companies:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Kohl&#146;s Corporation;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    J C Penney Corporation, Inc.;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Williams-Sonoma Inc.;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Dillard&#146;s Inc.;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Chico&#146;s FAS&#160;Inc.;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    J.&#160;Crew Group, Inc.;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Coldwater Creek Inc.;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    AnnTaylor Stores Corporation;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Cabela&#146;s Inc.;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Charming Shoppes Inc.;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Talbots Inc.;&#160;and
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Charlotte Russe Holding Inc.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following table summarizes the results from the comparable
    companies&#146; analysis:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>
<DIV style="margin-left: 10%; margin-right: 0%">
<TABLE border="0" width="90%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="79%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="2%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="2%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="5%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="5%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Comparable<BR>
    </B>
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Blair</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Companies(1)</B>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Enterprise Value to:
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    <FONT style="font-size: 10pt">2007 Revenue Estimate
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.3x
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1.0x
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    <FONT style="font-size: 10pt">2006 EBITDA Estimate
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    26.9x
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    9.2x
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    <FONT style="font-size: 10pt">2007 EBITDA Estimate
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5.6x
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    8.0x
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>
</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="font-size: 1pt; margin-left: 0%; width: 13%; align: left; border-bottom: 1pt solid #000000"></DIV><!-- callerid=999 iwidth=455 length=60 -->

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="4%"></TD>
    <TD width="1%"></TD>
    <TD width="95%"></TD>
</TR>

<TR>
    <TD align="right" valign="top">
    (1) </TD>
    <TD></TD>
    <TD valign="bottom">
    Based on median values.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Stephens did not rely solely on the quantitative results of the
    analysis in developing reference ranges or otherwise applying
    its analysis. Based on its experience with mergers and
    acquisitions, various judgments concerning relative
    comparability of each of the selected companies, the relative
    historical trading level of Blair versus comparable companies
    and using the selected multiples as a general guide, Stephens
    selected a range that it believed reflected an appropriate range
    of multiples applicable to Blair. Stephens then applied the
    selected range to the appropriate projected revenue or EBITDA
    estimate as provided by management in order to derive an implied
    per share reference range for the company shares. As a result of
    this analysis, Stephens derived a range for the implied value
    per share of our common stock of $15.49 to $75.58. Stephens
    noted that the merger consideration of $42.50&#160;per share of
    our common stock was within the range derived.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Comparable Transactions Analysis.</I>&#160;&#160;Stephens
    reviewed the publicly available information for selected catalog
    retail and retail related mergers or acquisitions announced
    since January&#160;1, 2005 deemed to be reasonably comparable to
    the proposed transaction. For the selected merger transactions
    listed below, Stephens used publicly available financial
    information to determine the multiple of the enterprise value to
    latest twelve-month or LTM, EBITDA by dividing the publicly
    announced transaction value of each selected transaction by the
    publicly available latest twelve-month EBITDA of the target
    company prior to the transaction announcement. The following
    transactions were reviewed by Stephens (in each case, the first
    named company was the acquirer and the second named company was
    the acquired company):
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Limited Brand Inc./La&#160;Senza Corp.;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Sun Capital Partners, Inc. and Golden Gate Capital/Eddie Bauer
    Holdings, Inc.;
</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    20
</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    MultiCultural Radio Broadcasting/Shop At Home Network, LLC;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Green Equity Investors/Tourneau, Inc.;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Belk, Inc./Parisian Inc.;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The Carlyle Group/Oriental Trading Company, Inc.;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Bain Capital Partners and The Blackstone Group/Michael&#146;s
    Stores Inc.;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    NRDC Equity Partners, LLC/Lord&#160;&#38; Taylor;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Sun Capital Partners, Inc./Lillian Vernon Corporation;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Istithmar/Loehmann&#146;s Holdings Inc.;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Redcats USA Inc./Sportsman&#146;s Guide Inc.;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Sun Capital Partners, Inc./Bachrach Acquisition, LLC;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Talbots Inc./J.Jill Group Inc.;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Leonard Green&#160;&#38; Partners/Sport Authority Inc.;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Bain Capital Partners/Burlington Coat Factory Warehouse;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Apax Partners Worldwide/Tommy Hilfiger Corp.;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Apollo Management/Linens&#160;&#145;n Things;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Bon-Ton Stores Inc./Saks Inc.&#160;&#151; Northern Department
    Store Group;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Jerry Zucker/Hudson&#146;s Bay;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    GMM Capital LLC and Prentice Capital/Goody&#146;s Family
    Clothing Inc.;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Investor Group/ShopKo Stores Inc.;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    American Capital Strategies/Potpourri Group;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    EW Scripps/Shopzilla;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Charming Shoppes Inc./Crosstown Traders Inc.;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Carter&#146;s Inc./Oshkosh B&#146;Gosh Inc.;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Texas Pacific Group and Warburg Pincus/Neiman Marcus Group Inc.;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Belk, Inc./Proffitt&#146;s&#160;&#38; McRae&#146;s;&#160;and
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    InterActiveCorp./Cornerstone Brands.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Stephens considered these selected merger transactions to be
    reasonably similar, but not identical, to the merger. The
    selected transaction may differ significantly from the proposed
    merger based on, among other things, the structure of the
    transactions, the financial and other characteristics of the
    parties to the transactions, and the dates that the transactions
    were announced or consummated. A complete analysis involves
    complex considerations and qualitative judgments concerning
    differences in the selected merger transactions and other
    factors that could affect the multiples paid in those comparable
    transactions to which the merger is being compared. Mathematical
    analysis (such as determining the mean or the median) is not in
    itself a meaningful method of using selected merger transaction
    data.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following table sets forth the results of the analysis:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>
<DIV style="margin-left: 10%; margin-right: 10%">
<TABLE border="0" width="80%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="75%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="5%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="5%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="4%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="4%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Blair<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Median<BR>
    </B>
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Implied by<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Comparable<BR>
    </B>
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>the Merger(1)</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Transactions</B>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Enterprise Value to:
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    <FONT style="font-size: 10pt">LTM EBITDA
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    31.3x
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    9.4x
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>
</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="font-size: 1pt; margin-left: 0%; width: 13%; align: left; border-bottom: 1pt solid #000000"></DIV><!-- callerid=999 iwidth=455 length=60 -->

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="4%"></TD>
    <TD width="1%"></TD>
    <TD width="95%"></TD>
</TR>

<TR>
    <TD align="right" valign="top">
    (1) </TD>
    <TD></TD>
    <TD valign="bottom">
    Based on 2006 EBITDA Estimate.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Stephens did not rely solely on the quantitative results of the
    selected transaction analysis in developing a reference range or
    otherwise applying its analysis. Stephens, based on its
    experience with mergers and acquisitions,
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    21
</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    various judgments concerning the relative comparability of each
    of the selected transactions to the proposed merger, and using
    the selected multiples as a general guide, selected a range that
    it believed reflected an appropriate range of multiples
    applicable to Blair. This analysis suggested an implied value
    range of approximately $14.37 to $18.83&#160;per share of our
    common stock based on Enterprise Value to LTM EBITDA estimated
    multiples of comparable transactions. Stephens noted that the
    merger consideration offered of $42.50&#160;per share was above
    the derived range for the implied value per share of our common
    stock.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Discounted Cash Flow Analysis.</I>&#160;&#160;Stephens
    performed a discounted cash flow analysis to estimate a range of
    the present values per share of our common stock using EBITDA
    that Blair is expected to generate during fiscal years ended
    December&#160;31, 2007 through December&#160;31, 2012 based on
    financial projections prepared by Company management through the
    years ended December&#160;31, 2010 and management guidance
    through the years ended December&#160;31, 2012. The valuation
    range was determined by adding (1)&#160;the present value of
    unlevered free cash flow for the period January&#160;1, 2007
    through December&#160;31, 2011, and (2)&#160;the present value
    of the &#147;terminal value&#148; of our common stock. In
    calculating the terminal value of our common stock, Stephens
    applied multiples ranging from 5.0x to 7.0x to 2012 forecasted
    EBITDA. Over the period from January&#160;18, 2002 to
    January&#160;19, 2007, Blair&#146;s common stock has traded at
    an average enterprise value to LTM EBITDA of 5.9x. The free cash
    flow stream and the terminal value were then discounted back to
    December&#160;31, 2006, using discount rates ranging from 15.0%
    to 17.0%, which range Stephens viewed as appropriate for a
    company with our risk characteristics. This analysis suggested
    an acquisition value range of approximately $33.69 to
    $41.93&#160;per share of our common stock. Stephens noted that
    the merger consideration of $42.50&#160;per share was above the
    derived range for the implied value per share of our common
    stock.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Implied
    Price per Share Present Value Indications</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>
<DIV style="margin-left: 10%; margin-right: 10%">
<TABLE border="0" width="80%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="56%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="4%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="4%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="4%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=05 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=05 type=lead -->
    <TD width="4%" align="right">&nbsp;</TD>	<!-- colindex=05 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=05 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=06 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=06 type=lead -->
    <TD width="4%" align="right">&nbsp;</TD>	<!-- colindex=06 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=06 type=hang1 -->
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="18" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Terminal Multiple of 2011E EBITDA</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Discount Rate</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>5.0x</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>5.5x</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>6.0x</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>6.5x</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>7.0x</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B><FONT style="font-size: 10pt">15.0%</FONT></B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    35.54
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    37.14
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    38.74
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    40.33
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    41.93
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B><FONT style="font-size: 10pt">15.5%</FONT></B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    35.06
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    36.63
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    38.19
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    39.75
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    41.31
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B><FONT style="font-size: 10pt">16.0%</FONT></B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    34.60
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    36.12
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    37.65
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    39.18
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    40.71
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B><FONT style="font-size: 10pt">16.5%</FONT></B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    34.14
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    35.64
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    37.13
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    38.63
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    40.12
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B><FONT style="font-size: 10pt">17.0%</FONT></B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    33.69
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    35.16
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    36.62
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    38.09
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    39.55
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>
</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Premiums Paid Analysis.</I>&#160;&#160;Stephens reviewed
    publicly available information regarding the premiums paid in
    forty-one transactions announced since June&#160;30, 2006 with
    transaction values ranging from $100&#160;million to
    $300&#160;million excluding transactions where the target
    operated as a real estate investment trust or was an
    energy-related company.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As part of the premiums paid analysis, Stephens examined mean
    and medium premiums for each transaction including:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    price per share one day prior to the announcement of the
    transaction;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    price per share one week prior to the announcement of the
    transaction;&#160;and
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    price per share four weeks prior to the announcement of the
    transaction.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The results of this analysis are set forth below:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>
<DIV style="margin-left: 10%; margin-right: 10%">
<TABLE border="0" width="80%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="55%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="5%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="5%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="6%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="6%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="6%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="6%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="11" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Premium to Enterprise Value</B>
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>1 Day Prior to<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>1 Week Prior to<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>4 Weeks Prior to<BR>
    </B>
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Announcement</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Announcement</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Announcement</B>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Mean
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    30.4%
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    31.4%
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    33.4%
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Median
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    26.7%
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    27.7%
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    30.4%
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>
</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Based on this analysis, Stephens derived a range for the implied
    price per share of our common stock of $41.38 to $44.69 based on
    applying a 25% to 35% premium to the average of the share price
    over the 30 trading days prior to the issuance of this fairness
    opinion of $33.10. Stephens noted that the merger consideration
    of $42.50&#160;per share of our common stock was within the
    derived range for the implied value per share of our common
    stock.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    22
</DIV><!-- END LOGICAL PAGE -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Leveraged Buyout Analysis.</I>&#160;&#160;Stephens also
    performed an analysis of hypothetical leveraged buyouts of Blair
    and the value that Blair&#146;s stockholders could receive in
    such a transaction. For this analysis, Stephens assumed Blair
    would incur $43.3&#160;million of debt in connection with such
    buyouts, a target internal rate of return of 20% to 30% for an
    acquiror intending to exit after 5.0&#160;years (which are
    consistent with historical leveraged buyouts), an exit multiple
    of 6.0x EBITDA (from January&#160;18, 2002 to January&#160;19,
    2007, Blair&#146;s common stock has traded at an average
    enterprise value to LTM EBITDA of 5.9x), a 10% management equity
    position and transaction fees and expenses of 2% of the implied
    transaction value, including financing fees, M&#38;A and legal
    fees. Stephens performed this analysis using EBITDA that Blair
    is expected to generate during fiscal years ended
    December&#160;31, 2007 through December&#160;31, 2011 based on
    financial projections prepared by Company management through the
    years ended December&#160;31, 2010 and management guidance
    through the year ended December&#160;31, 2011. These projections
    were based on assumptions regarding the future financial
    performance of Blair.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    This analysis yielded an implied per share offer valuation range
    for each Blair ordinary share of:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>
<DIV style="margin-left: 10%; margin-right: 10%">
<TABLE border="0" width="80%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="85%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="11%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Implied<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Share Valuation</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Highest Estimated Valuation per
    Share
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    35.30
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Lowest Estimated Valuation per
    Share
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    28.45
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>
</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Stephens noted that the merger consideration of $42.50&#160;per
    share was above the derived range for the implied value per
    share of our common stock.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Historical One-Year Stock Price
    Analysis.</I>&#160;&#160;Stephens analyzed the historical daily
    closing prices per share of our common stock for the one-year
    period ending January&#160;19, 2007. Stephens noted that during
    this period, the
    <FONT style="white-space: nowrap">52-week</FONT> high
    and low closing prices per share of our common stock were $46.44
    and $23.73, respectively. Stephens further noted that the merger
    consideration of $42.50&#160;per share of our common stock was
    towards the upper end of the
    <FONT style="white-space: nowrap">52-week</FONT>
    range for the closing prices per share of our common stock for
    the one-year period ending January&#160;19, 2007. In addition,
    Stephens noted that a price of $42.50&#160;per share was at the
    upper end of the
    <FONT style="white-space: nowrap">10-year</FONT>
    trading range for the stock even when noting that profitability
    in previous periods was higher that in the
    <FONT style="white-space: nowrap">52-week</FONT>
    period ending January&#160;19, 2007.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Normalized Margin Analysis.</I>&#160;&#160;In addition to the
    analyses summarized above, Stephens performed an illustrative
    analysis of the implied share price as if the 2006 performance
    was an outlier, and Blair were valued assuming a return to
    historical EBITDA margins which averaged 5.2% over the period of
    January&#160;1, 2002 through the projected year ended
    December&#160;31, 2006 based on management estimates. Stephens
    evaluated projections as provided by management, looking at a
    range of transaction multiples of EBITDA and sensitivities to
    EBITDA margins achieved. For this analysis, Stephens used the
    revenue projections for the year ended December&#160;31, 2007
    prepared by Blair&#146;s management, and a range of EBITDA
    margins from 4.15% of revenue (the equivalent of achieving 75%
    of the projected 2007 EBITDA) to 6% of revenue (the average of
    Blair&#146;s historical EBITDA margins from the years ended
    December&#160;31, 2002 through December&#160;31, 2005). The
    analysis also assumed a transaction multiple of enterprise value
    to EBITDA of 5.0x to 8.0x (from January&#160;18, 2002 to
    January&#160;19, 2007, Blair&#146;s common stock has traded at
    an average enterprise value to LTM EBITDA of 5.9x). As presented
    below, this analysis resulted in a range of share prices from
    $27.82 to $54.24, and Stephens noted that the merger
    consideration of $42.50&#160;per share of our common stock was
    within the derived range for the implied value per share of our
    common stock, and above both the median implied price which was
    $39.91 and the mean implied price which was $40.29.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>
<DIV style="margin-left: 10%; margin-right: 10%">
<TABLE border="0" width="80%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="65%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="4%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="4%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="4%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=05 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=05 type=lead -->
    <TD width="4%" align="right">&nbsp;</TD>	<!-- colindex=05 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=05 type=hang1 -->
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="14" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Multiple of EBITDA</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>EBITDA Margin</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>5.0x</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>6.0x</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>7.0x</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>8.0x</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">4.15%&#160;&#151; (75% of
    projected 2007)
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    27.82
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    31.85
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    35.88
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    39.91
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">5.00%
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    31.93
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    36.78
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    41.63
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    46.48
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">5.50%&#160;&#151; (100% of
    projected 2007)
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    34.54
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    39.91
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    45.28
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    50.65
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">6.00%&#160;&#151; (average of FY
    2002 to FY 2005)
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    36.78
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    42.60
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    48.42
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    54.24
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>
</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Stephens concluded that the $42.50 offer price per share
    represented a price that was potentially equivalent to the level
    at which the Blair stock may trade if Blair&#146;s financial
    performance improved over the next twelve months as planned and
    margins returned to historical levels for the full fiscal year
    2007. Stephens&#146; believed the proposed $42.50 offer per
    share, which was within the range presented by this analysis,
    was a fair offer from a financial point
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    23
</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    of view, as it eliminates the inherent operating risk in the
    projections and provides a similar or higher value per share as
    Blair could achieve through significant operating improvements
    over the next twelve months.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Stephens performed a variety of financial and comparable
    analyses for purposes of rendering its opinion. The above
    summary of these analyses does not purport to be a complete
    description of the analyses performed by Stephens in arriving at
    its opinion. The preparation of a fairness opinion is a complex
    process and is not susceptible to partial analysis or summary
    description. In arriving at its opinion, Stephens considered the
    results of all of its analyses as a whole and did not attribute
    any particular weight to any analysis or factor considered by
    Stephens. Furthermore, Stephens believes that the summary
    provided and the analyses described above must be considered as
    a whole and that selecting any portion of Stephens&#146;
    analyses, without considering all of them, would create an
    incomplete view of the process underlying Stephens&#146;
    analysis and opinion. As a result, the ranges of valuations
    resulting from any particular analysis or combination of
    analyses described above were merely utilized to create points
    of reference for analytical purposes and should not be taken to
    be the view of Stephens with respect to our actual value.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In performing its analyses, Stephens made numerous assumptions
    with respect to industry performance, general business and
    economic conditions, and other matters, many of which are beyond
    the control of Stephens or us. Any estimates contained in the
    analyses of Stephens are not necessarily indicative of future
    results or actual values, which may be significantly more or
    less favorable than those suggested by those estimates. The
    analyses performed were prepared solely as part of the analysis
    by Stephens of the fairness to our stockholders of the
    consideration to be offered to those stockholders in the merger,
    from a financial point of view, and were prepared in connection
    with the delivery by Stephens of its opinion to our board of
    directors.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The consideration to be offered to our stockholders in the
    merger and other terms of the merger were determined through
    arms-length negotiations between us and Appleseed&#146;s and was
    unanimously approved by our board of directors. Stephens
    provided advice to us during those negotiations. However,
    Stephens did not recommend any specific price per share or other
    form of consideration to us or that any specific price per share
    or other form of consideration constituted the only appropriate
    consideration for the merger. The opinion of Stephens was one of
    many factors taken into consideration by our board of directors
    in making its determination to approve the merger. The analysis
    of Stephens summarized above should not be viewed as
    determinative of the opinion of our board of directors with
    respect to our value or of whether our board of directors would
    have been willing to agree to a different price per share or
    other forms of consideration.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our board of directors selected Stephens as its financial
    advisor because of Stephens&#146; reputation as a recognized
    investment banking and advisory firm with substantial experience
    in transactions similar to the merger and because Stephens is
    familiar with us and our business. As part of its investment
    banking and financial advisory business, Stephens is continually
    engaged in the valuation of businesses and their securities in
    connection with mergers and acquisitions, negotiated
    underwritings, competitive biddings, secondary distributions of
    listed and unlisted securities, private placements and
    valuations for corporate and other purposes.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Stephens provides a full range of financial advisory and
    securities services. Stephens has performed various investment
    banking services for us in the past and has received customary
    fees for those services. In the ordinary course of its business,
    Stephens may actively trade in the securities of Blair for its
    own account or for the accounts of its customers and,
    accordingly, may at any time hold or short positions in those
    securities.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Pursuant to an engagement letter between Stephens and us entered
    into in connection with this transaction, we agreed to pay
    Stephens a fee, the substantial portion of which is payable upon
    completion of the merger. Under the terms of this engagement
    letter, we paid Stephens a fee of $250,000 upon delivery of its
    fairness opinion to us on January&#160;22, 2007, and we have
    agreed to pay Stephens an additional fee of approximately
    $1.9&#160;million upon the closing of the merger. We have also
    agreed to reimburse Stephens for its reasonable out of pocket
    expenses incurred in connection with the engagement and to
    indemnify Stephens and its related parties from and against
    certain liabilities, including liabilities under the federal
    securities laws. Prior to our engagement of Stephens in
    connection with the merger, we had previously hired Stephens on
    October&#160;3, 2006 to act as our financial advisor with
    respect to exploring strategic alternatives for our company and
    serving as a business consultant to us to evaluate operational
    prospects and to explore financing options available to us. For
    the services provided by Stephens for this initial engagement in
    October 2006, we paid Stephens $150,000.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    24
</DIV><!-- END LOGICAL PAGE -->
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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->
<A name='121'>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Effective
    Time of the Merger</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The merger will become effective upon the filing of a
    Certificate of Merger with the Secretary of State of the State
    of Delaware, unless a later time is agreed upon by
    Appleseed&#146;s, BLR&#160;Acquisition and our company and is
    specified in the Certificate of Merger. The Certificate of
    Merger will be filed only after the satisfaction or waiver of
    all conditions to the merger set forth in the merger agreement.
</DIV>
<A name='122'>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Structure
    of the Merger and Merger Consideration</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Structure.</I>&#160;&#160;At the effective time of the
    merger, BLR&#160;Acquisition will merge with and into Blair.
    Blair will survive the merger and continue to exist after the
    merger as a wholly-owned subsidiary of Appleseed&#146;s. All of
    Blair&#146;s and BLR&#160;Acquisition&#146;s properties, rights,
    powers, privileges and franchises, and all of their debts,
    liabilities, and duties, will become those of the surviving
    corporation.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Merger Consideration.</I>&#160;&#160;At the effective time of
    the merger, each share of Blair common stock issued and
    outstanding immediately prior to the effective time of the
    merger will automatically be converted into the right to receive
    $42.50 in cash, without interest or dividends and less any
    applicable withholding of taxes, other than shares of Blair
    common stock:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    held in Blair&#146;s treasury immediately prior to the effective
    time of the merger and shares held by Appleseed&#146;s or BLR
    Acquisition, which shares will be canceled without conversion or
    consideration;&#160;and
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    held by stockholders who have properly demanded and perfected
    their appraisal rights in accordance with Delaware law, which
    shares will be entitled to only such rights as are granted by
    Delaware law.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    All such shares, when so converted, will automatically be
    cancelled and retired and cease to exist. After the effective
    time of the merger, each outstanding stock certificate
    representing shares of Blair common stock converted in the
    merger will represent only the right to receive the merger
    consideration.
</DIV>
<A name='123'>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Treatment
    of Stock Options and Restricted Stock</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    At the effective time of the merger, all stock options granted
    by us at or prior to January&#160;23, 2007, shall be canceled
    and become immediately vested and exercisable in full. In
    consideration of such cancellation, each holder of any such
    stock option with an exercise price less than the merger
    consideration will receive from us in settlement of such stock
    option at the closing of the merger, a cash payment, subject to
    any required withholding of taxes, equal to the product of
    (i)&#160;the total number of shares of our common stock subject
    to such stock option at the effective time of the merger and
    (ii)&#160;the excess, if any, of the merger consideration over
    the exercise price per share of such stock option. Each stock
    option that has an exercise price equal to or in excess of the
    merger consideration shall be canceled at the effective time of
    the merger for no consideration. We have agreed to use our
    reasonable best efforts to obtain the written acknowledgement of
    each holder of a then outstanding stock option that the payment
    for such cancelled stock option will satisfy in full our
    obligation to such option holder pursuant to their stock option,
    and that upon payment for such cancelled stock option, such
    stock option shall, without any action on our part or the
    holder, be deemed terminated, canceled, void and of no further
    force and effect as between us and the option holder and neither
    party shall have any further rights or obligations with respect
    to such cancelled stock option.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition, each share of restricted common stock, which was
    issued pursuant to our stock plans at or prior to
    January&#160;23, 2007, whether in book-entry or certificated
    form, will, at the effective time of the merger, become fully
    vested and converted into, and cancelled in exchange for, the
    right to receive the merger consideration, plus any
    <FONT style="white-space: nowrap">&#147;gross-up&#148;</FONT>
    for income taxes payable on account of such acceleration of the
    vesting of such restricted common stock as provided in each such
    holder&#146;s restricted stock award agreement as in effect as
    of January&#160;23, 2007. See &#147;Interests of our Directors
    and Executive Officers in the Merger&#148; beginning on
    page&#160;38.
</DIV>
<A name='124'>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Exchange
    and Payment Procedures</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    At or prior to the effective time of the merger,
    BLR&#160;Acquisition shall deposit or cause to be deposited in
    trust with a bank or trust company designated by
    BLR&#160;Acquisition and reasonably acceptable to us, or the
    paying agent, an amount of cash sufficient to pay the merger
    consideration to each holder of shares of our common stock
    entitled to receive the merger consideration. Promptly after the
    effective time of the merger, but in no event more than three
    business days after the merger, the paying agent will mail to
    each holder of record of shares of our common stock a
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    25
</DIV><!-- END LOGICAL PAGE -->
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    notice of effectiveness of the merger, a letter of transmittal
    and instructions. The letter of transmittal and instructions
    will tell you how to surrender your common stock certificates in
    exchange for the merger consideration.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>You should not return your stock certificates with the
    enclosed proxy card, and you should not forward your stock
    certificates to the paying agent without a letter of
    transmittal.</B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Upon surrender of your stock certificate or certificates to the
    paying agent, together with a letter of transmittal duly
    completed and executed in accordance with the instructions, the
    holder of such stock certificate or certificates be entitled to
    receive the merger consideration and the stock certificate so
    surrendered will be cancelled. No interest or dividends will be
    paid on the merger consideration. The merger consideration may
    be paid to a person other than the person in whose name the
    corresponding certificate is registered if the certificate is
    properly endorsed or is otherwise in the proper form for
    transfer. In addition, the person who surrenders such
    certificate must either pay any transfer or other applicable
    taxes or establish to the reasonable satisfaction of the
    surviving corporation that such taxes have been paid or are not
    applicable.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The paying agent, Appleseed&#146;s
    <FONT style="white-space: nowrap">and/or</FONT> the
    surviving corporation will be entitled to deduct and withhold,
    and pay to the appropriate taxing authorities, any applicable
    taxes required to be deducted or withheld from the merger
    consideration payable to holders of our common stock or stock
    options under any applicable provision under federal, state,
    local or foreign tax law or regulation. To the extent amounts
    are so deducted or withheld, such amounts shall be treated for
    all purposes under the merger agreement as having been paid to
    the person to whom such amounts would otherwise have been paid.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    After the effective time of the merger, there shall be no
    transfers on the surviving corporation&#146;s stock transfer
    books of any shares of our common stock that were outstanding
    immediately prior to the effective time of the merger. If, after
    the effective time of the merger, certificates are presented to
    the surviving corporation for transfer, they will be canceled
    and exchanged for the merger consideration in accordance with
    the terms of the merger agreement.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    None of BLR Acquisition, our company nor the paying agent will
    be liable to a holder of stock certificates or any person for
    any cash or other consideration delivered to a public official
    pursuant to any applicable abandoned property, escheat or
    similar law. Any portion of the merger consideration deposited
    with the paying agent that remains undistributed to the holders
    of certificates evidencing shares of our common stock
    180&#160;days after the effective time of the merger will be
    delivered, upon demand, to the surviving corporation. Holders of
    certificates who have not surrendered their certificates prior
    to the delivery of such funds to the surviving corporation may
    thereafter only look to the surviving corporation for the
    payment of the merger consideration. Any portion of the merger
    consideration that remains unclaimed as of a date that is
    immediately prior to such time as such amounts would otherwise
    escheat to or become property of any governmental entity will,
    to the extent permitted by applicable law, become the property
    of the surviving corporation free and clear of any claims or
    interest of any person previously entitled to the merger
    consideration.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If your certificates have been lost, stolen or destroyed, upon
    making an affidavit, in the form acceptable to the surviving
    corporation, of that fact, and if reasonably required by the
    surviving corporation, posting a bond in such amount as the
    surviving corporation may direct as indemnity against any claim
    with respect to the certificates, the paying agent will issue
    the merger consideration in exchange for your lost, stolen, or
    destroyed stock certificates.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    For information with respect to appraisal rights under Delaware
    law, see &#147;&#151;&#160;Appraisal Rights&#148; beginning on
    page&#160;44.
</DIV>
<A name='125'>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Representations
    and Warranties</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Pursuant to the merger agreement, our company, Appleseed&#146;s,
    and BLR Acquisition made certain representations and warranties
    relating to our respective companies, subsidiaries, businesses
    and matters related to the merger. For detailed information
    concerning these representations and warranties, reference is
    made to Articles&#160;III and IV of the merger agreement
    included as Appendix&#160;A hereto.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The merger agreement contains representations and warranties the
    parties to the merger agreement made to each other. The
    assertions embodied in our representations and warranties have
    been qualified by information in a confidential disclosure
    schedule that we provided Appleseed&#146;s and BLR Acquisition
    in connection with the signing of the merger agreement. While we
    do not believe that the confidential disclosure schedule
    contains material
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    26
</DIV><!-- END LOGICAL PAGE -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    information that is required to be disclosed publicly other than
    information that has already been so disclosed, the disclosure
    schedule does contain information that modifies, qualifies and
    creates exceptions to our representations and warranties
    contained in the merger agreement, including certain nonpublic
    information. Accordingly, you should not rely on our
    representations and warranties as characterizations of the
    actual state of facts, since they are modified in part by the
    underlying disclosure schedule.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition, such representations and warranties (i)&#160;will
    not survive consummation of the merger and cannot be the basis
    for any claims under the merger agreement by the other party
    after termination of the merger agreement except if fraudulent
    or willfully false as of the date of the merger agreement and
    (ii)&#160;are subject to the materiality standards contained in
    the merger agreement which may differ from what may be viewed as
    material by investors.
</DIV>
<A name='126'>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Conduct
    of Business Pending the Merger</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The merger agreement contains certain covenants of the parties
    regarding the conduct of their respective businesses pending the
    consummation of the merger. These covenants, which are contained
    in Section&#160;5.01 of the merger agreement included as
    Appendix&#160;A hereto, are described below.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Under the merger agreement, we agreed that, subject to certain
    exceptions and limitations, between January&#160;23, 2007 and
    the earlier to the effective time of the merger or termination
    of the merger agreement:
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    we and our subsidiaries will conduct business in all material
    respects in the ordinary course of business consistent with past
    practice;&#160;and
</TD>
</TR>

<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    we and our subsidiaries will use reasonable best efforts to
    maintain and preserve substantially intact its business
    organization and the goodwill of those having business
    relationships with it.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We have also agreed that, during the same time period, subject
    to certain exceptions, neither we nor any of our subsidiaries
    will take any of the following actions:
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    authorize for issuance, issue, deliver, sell or agree or commit
    to issue, sell or deliver, (whether through the issuance or
    granting of options, commitments, subscriptions, rights to
    purchase or otherwise), pledge or otherwise encumber any shares
    of our capital stock, any other securities or any securities
    convertible into, or any rights, warrants or stock options to
    acquire, any such shares, securities or convertible securities
    or any other securities or equity equivalents (including without
    limitation stock appreciation rights or phantom interests),
    except for issuances of common stock upon the exercise of stock
    options outstanding as of January&#160;23, 2007;
</TD>
</TR>

<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    repurchase, redeem or otherwise acquire any shares of our
    capital stock or other equity interests, including, without
    limitation, securities exchangeable for, or stock options,
    warrants, calls, commitments or rights of any kind to acquire,
    our capital stock or other equity interests of our company or
    any of our subsidiaries;
</TD>
</TR>

<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    sell, transfer or pledge, or agree to sell, transfer or pledge,
    any equity interest owned by us in any of our subsidiaries or
    alter through merger, liquidation, reorganization, restructuring
    or in any other fashion the corporate structure or ownership of
    any of our subsidiaries;
</TD>
</TR>

<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    amend or otherwise change our certificate of incorporation or
    bylaws or equivalent organizational documents;
</TD>
</TR>

<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    split, combine or reclassify any shares of our capital stock;
</TD>
</TR>

<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    declare, set aside or pay any dividends on (whether in cash,
    stock or property), or make any other distributions in respect
    of, any of our capital stock (except for dividends paid by our
    direct or indirect wholly owned subsidiaries to us with respect
    to capital stock);
</TD>
</TR>

<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    grant or agree to any increase in any manner the compensation or
    fringe benefits of, or pay any bonus or other compensation to,
    any current or former director, officer or employee except for:
    (i)&#160;increases and bonuses expressly contemplated by or
    required under existing employment agreements, bonus plans and
    other agreements and arrangements as in effect on
    January&#160;23, 2007 as previously disclosed to
    Appleseed&#146;s; and (ii)&#160;for normal annual or other
    periodic individual increases in base salary or hourly wages to
    employees earning non-contingent cash compensation of less than
    $100,000&#160;per annum in the ordinary course of business
    consistent with past practice;
</TD>
</TR>

<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    enter into any new or amend any existing employment, severance
    or termination or change in control agreement with any current
    or former director, officer or employee, subject to certain
    limited exceptions;
</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    27
</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    become obligated under any benefit plan that was not in
    existence on January&#160;23, 2007 or amend, modify or terminate
    any benefit plan or any agreement, arrangement, plan or policy
    for the benefit of any current or former director, officer or
    employee in existence on January&#160;23, 2007;
</TD>
</TR>

<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    permit any officer or employee to rescind, withdraw or amend or
    modify in any respect any pending or announced retirement or any
    resignation (or the terms and conditions thereof) previously
    submitted to us or any of our subsidiaries;
</TD>
</TR>

<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    hire any employee other than hourly and secretarial employees
    and employees earning non-contingent cash compensation of less
    than $100,000 annually, subject to limited exceptions;
</TD>
</TR>

<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    pay any benefit not required by any plan or arrangement as in
    effect on January&#160;23, 2007;
</TD>
</TR>

<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    acquire any business, other than purchases of inventory or
    supplies or other assets in the ordinary course of business
    consistent with past practice;
</TD>
</TR>

<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    sell, lease, encumber or dispose of any material properties or
    assets other than in the ordinary course of business consistent
    with past practice;
</TD>
</TR>

<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    other than the incurrence of indebtedness under our existing
    revolving credit facility and guaranties of real property leases
    in the ordinary course of business with any person not
    affiliated with any of our officers, directors or employees or
    our subsidiaries, create, incur, assume or modify in any
    material respect any indebtedness for borrowed money, or issue
    any note, bond or other debt security, or guarantee any
    indebtedness, or make any loans, advances (other than advances
    to employees of our company or any of our subsidiaries in the
    ordinary course of business consistent with past practice) or of
    capital contributions to or investments in any other person
    other than to us and our subsidiaries, except for indebtedness
    other than indebtedness for borrowed money in an amount not in
    excess of $250,000 in the aggregate and indebtedness to our
    merchandise suppliers for products purchased in the ordinary
    course of business consistent with past practice;
</TD>
</TR>

<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    make or forgive any loans, advances or capital contributions to,
    guarantees for the benefit of, or investments in, any person or
    entity (other than loans between or among us and any of our
    wholly-owned subsidiaries);
</TD>
</TR>

<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    assume, guarantee or otherwise become liable or responsible
    (whether directly, contingently or otherwise) for the
    obligations of any other person, except for the obligations of
    our subsidiaries permitted under the merger agreement;
</TD>
</TR>

<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    adopt or put into effect a plan of complete or partial
    liquidation, dissolution, merger, consolidation, restructuring,
    recapitalization or other reorganization of our company or any
    of our subsidiaries (other than the transactions contemplated by
    the merger agreement);
</TD>
</TR>

<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    enter into, amend, modify or supplement any material contract or
    license agreement outside of the ordinary course of business
    consistent with past practice (except as may be necessary for us
    to comply with our obligations under the merger agreement) or
    waive, release, grant, assign or transfer any of our material
    rights or claims (whether such rights or claims arise under a
    material contract, license agreement or otherwise);
</TD>
</TR>

<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    authorize or make any capital expenditures that are not set
    forth in the 2007 approved budget or in excess of $100,000 in
    the aggregate for our company and our subsidiaries taken as a
    whole;
</TD>
</TR>

<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    authorize or pay any expenses in connection with the merger
    other than those expenses payable to the brokers previously
    disclosed to Appleseed&#146;s pursuant to contractual
    arrangements as in effect as of January&#160;23, 2007,
    reasonably incurred actual fees and expenses payable to our
    outside legal counsel for services rendered in connection with
    the transactions contemplated by the merger agreement (including
    any litigation with respect thereto) and other reasonably
    incurred actual fees and expenses for services rendered in
    connection with the transactions contemplated by the merger
    agreement (e.g., printing, proxy solicitation, etc.);
</TD>
</TR>

<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    fail to continue insurance coverages that cover risks of such
    types and in such amounts as are consistent with our past
    practices;
</TD>
</TR>

<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    enter into, amend, modify or supplement any agreement,
    transaction, commitment or arrangement with any current or
    former officer, director, employee or other affiliate of ours or
    of any of our subsidiaries (or any affiliate of any of such
    persons) other than agreements, transactions, commitments and
    arrangements permitted by the merger agreement;
</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    28
</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    establish or acquire any subsidiary other than wholly-owned
    subsidiaries or subsidiaries organized outside of the United
    States and its territorial possessions;
</TD>
</TR>

<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    amend, modify or waive any term of any outstanding security of
    ours or of any of our subsidiaries, except as otherwise provided
    in the merger agreement;
</TD>
</TR>

<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    fail to maintain any real property to which we and any of our
    subsidiaries have an ownership or a leasehold interest
    (including, without limitation, the furniture, fixtures,
    equipment and systems therein) in its current condition, subject
    to reasonable wear and tear and subject to any casualty or
    condemnation or material contract;
</TD>
</TR>

<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    fail to timely pay all taxes, water and sewage rents,
    assessments and insurance premiums affecting such real property;
</TD>
</TR>

<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    fail to timely comply in all material respects with the terms
    and provisions of all leases, contracts and agreements relating
    to such real property and the use and operation thereof;
</TD>
</TR>

<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    enter into any labor or collective bargaining agreement,
    memorandum or understanding, grievance settlement or any other
    agreement or commitment to or relating to any labor union,
    except as required by law;
</TD>
</TR>

<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    settle or compromise any pending or threatened suit, action,
    claim or litigation with any current or former officer, employee
    or director or in excess of $100,000&#160;per litigation net of
    insurance proceeds or in excess of $250,000 in the aggregate net
    of insurance proceeds;
</TD>
</TR>

<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    change any of the accounting policies, practices or procedures
    (including tax accounting policies, practices and procedures)
    used by us and our subsidiaries as of January&#160;23, 2007,
    except as may be required as a result of a change in applicable
    law or in United States generally accepted accounting principles;
</TD>
</TR>

<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    revalue in any material respect any of our assets, including,
    without limitation, writing down the value of inventory in any
    material manner or the write-off of notes or accounts receivable
    in any material manner, except as may be required as a result of
    a change in applicable law or in United States generally
    accepted accounting principles;
</TD>
</TR>

<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    make or change any material tax election, make or change any
    method of accounting with respect to taxes, file any amended tax
    return or settle or compromise any material tax liability;
</TD>
</TR>

<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    pay, discharge or satisfy any claims, liabilities or obligations
    (absolute, accrued, asserted or unasserted, contingent or
    otherwise), other than the payment, discharge or satisfaction in
    the ordinary course of business and consistent with past
    practice of liabilities reflected or reserved against in our
    financial statements or incurred in the ordinary course of
    business and consistent with past practice;
</TD>
</TR>

<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    except as permitted by the non-solicitation provisions and the
    provisions related to the Go Shop Period, take any action to
    exempt any person (other than Appleseed&#146;s and BLR
    Acquisition) or any action taken by such person from, or make
    such person or action not subject to, the provisions of
    Section&#160;203 of the Delaware General Corporations Law, if
    applicable, or any other state takeover law or state law that
    purports to limit or restrict business combinations or the
    ability to acquire or vote shares;
</TD>
</TR>

<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    take, or agree or commit to take, any action that would, or is
    reasonably likely to, make any or our representations or
    warranties contained in the merger agreement inaccurate at, or
    as of any time prior to, the consummation of the merger or
    result in any of the conditions to the merger, as set forth in
    the &#147;&#151;&#160;Conditions to the Merger&#148; section of
    this proxy statement beginning on page&#160;33, not being
    satisfied, or omit, or agree to omit, to take any action
    necessary to prevent any such representation or warranty from
    being inaccurate in any material respect at any such time or to
    prevent any such condition from not being satisfied;&#160;or
</TD>
</TR>

<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    agree or commit to do any of the actions described above.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The merger agreement also provides that from January&#160;23,
    2007 until the earlier of the effective time of the merger or
    the termination of the merger agreement, unless expressly
    contemplated or permitted by the merger agreement or as required
    by law, Appleseed&#146;s shall not, and will cause BLR
    Acquisition not to:
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    take, or agree or commit to take, any action that would, or is
    reasonably likely to, make any representation or warranty of
    Appleseed&#146;s and BLR Acquisition contained in the merger
    agreement inaccurate at, or as of any time prior to, the
    consummation of the merger or result in any of the conditions to
    the merger, as set forth in the &#147;&#151;&#160;Conditions to
    the Merger&#148; section of this proxy statement beginning on
    page&#160;33 not being satisfied;
</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    29
</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    omit, or agree to omit, to take any action necessary to prevent
    any such representation or warranty from being inaccurate in any
    material respect at any such time or to prevent any such
    condition from not being satisfied;&#160;or
</TD>
</TR>

<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    agree or commit to do any of the foregoing.
</TD>
</TR>

</TABLE>
<A name='127'>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">No
    Solicitation and Go Shop Period</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    With the exception of the Go Shop Period discussed below,
    beginning on the date we entered into the merger agreement
    through the earlier of the effective time of the merger or
    termination of the merger agreement, we agreed not to and to
    cause our subsidiaries and our affiliates, and each of our and
    their respective officers, directors, employees, agents,
    counsel, accountants, investment bankers, financial advisors and
    representatives not to, directly or indirectly:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    solicit, initiate or encourage, including by way of furnishing
    information or assistance, or take any other action to
    facilitate, any inquiry in connection with or the making of any
    proposal from any person that constitutes, or may reasonably be
    expected to lead to, an acquisition proposal, as defined below;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    enter into, explore, maintain, participate in or continue any
    discussion or negotiation with any person, other than BLR
    Acquisition, Appleseed&#146;s or any of their representatives,
    regarding an acquisition proposal, or furnish to any person
    (other than BLR Acquisition, Appleseed or any of their
    representatives) any information or otherwise cooperate in any
    way with, or assist or participate in, facilitate or encourage,
    any effort or attempt by any other person (other than BLR
    Acquisition, Appleseed) to make or effect an acquisition
    proposal;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    enter into any agreement, arrangement or understanding with
    respect to, or otherwise endorse, any acquisition
    proposal;&#160;or
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    authorize or permit any of our representatives to take any such
    action.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    However, nothing in the merger agreement prevents, prohibits or
    limits us or our board of directors from:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    complying with our disclosure obligations under federal or state
    law;&#160;or
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    prior to receiving stockholder approval of the merger agreement
    at the special stockholder meeting, furnishing information to,
    or engaging in discussions or negotiations with, any person that
    makes an unsolicited bona fide written acquisition proposal
    (which did not result from a breach of our obligations described
    in this section), if and only to the extent that, (i)&#160;our
    board of directors determines in good faith after consultation
    with outside legal counsel, that such action is necessary for
    our board to comply with its fiduciary duties to our
    stockholders under applicable law, (ii)&#160;the acquisition
    proposal constitutes or would reasonably be expected to lead to
    a &#147;superior proposal,&#148; as defined below, and
    (iii)&#160;prior to providing such information to, or engaging
    in discussions or negotiations with, such person, we receive
    from such person an executed confidentiality agreement on terms
    no less favorable to us than the confidentiality agreement dated
    January&#160;20, 2007 that we entered into with Appleseed&#146;s.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Further, nothing in the merger agreement prohibited us or in any
    way limited or restricted us and our representatives, during the
    period commencing as of January&#160;23, 2007 and ending as of
    11:59&#160;p.m. New York time on February&#160;22, 2007 (the
    &#147;Go Shop Period&#148;) from furnishing information to, or
    engaging in discussions or negotiations with, any person that we
    concluded may make an offer to acquire us, which would be deemed
    to be an acquisition proposal (which did not result from a
    breach of our obligations described in this section), if prior
    to providing such information to, or engaging in discussions or
    negotiations with, such person, we received from such person an
    executed confidentiality agreement on terms no less favorable to
    us than the confidentiality agreement dated January&#160;20,
    2007 that we entered into with Appleseed&#146;s. Immediately
    following the expiration of the Go Shop Period, we agreed to
    immediately cease discussions or negotiations with any other
    party (other than Appleseed&#146;s and BLR Acquisition) relating
    to any acquisition proposal and to use our reasonable best
    efforts to cause any such parties in possession of confidential
    information about us that was provided by us or our
    representatives to return or destroy all such information in the
    possession of any such party or its representatives. We actively
    sought acquisition proposals during the Go Shop Period and
    engaged Stephens to solicit acquisition proposals on our behalf.
    The Go Shop Period has expired and, as of the date of this proxy
    statement we have not received any proposals to pursue a
    transaction with Blair.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    30
</DIV><!-- END LOGICAL PAGE -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    During the period from January&#160;23, 2007 and until the
    earlier of the effective of the merger or termination of the
    merger agreement, if our board of directors is entitled to
    furnish information to, or engage in discussions or negotiations
    with, any person on the terms described above, our board of
    directors may, prior to the special meeting, terminate the
    merger agreement in respect of any acquisition proposal pursuant
    to the termination provisions described in the
    &#147;&#151;&#160;Termination of the Merger Agreement&#148;
    section of this proxy statement beginning on page&#160;36, if
    such acquisition proposal constitutes a superior proposal, and
    our board of directors has determined in good faith after
    consultation with outside legal counsel, that such action is
    necessary for them to comply with their fiduciary duties to our
    stockholders under applicable law.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Prior to taking any of the actions described above, our board of
    directors must:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    promptly (but in any event within 24&#160;hours) notify
    Appleseed&#146;s of any action we propose to take with respect
    to any such acquisition proposal;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    after taking any such action, promptly advise Appleseed&#146;s
    of the status of such action as developments arise or as
    requested by Appleseed&#146;s;&#160;and
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    at least five business days, or the five day period, prior to
    terminating the merger agreement as described above, notify
    Appleseed&#146;s of any such action it proposes to take and,
    during the five day period, negotiate in good faith with
    Appleseed&#146;s with respect to any revised proposal to effect
    the merger that Appleseed&#146;s may make during the five day
    period.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition, we have agreed that we will promptly (but in any
    event within 24&#160;hours) notify Appleseed&#146;s orally and
    in writing of the receipt of any acquisition proposal or any
    inquiry regarding the making of an acquisition proposal
    including any request for information, the terms and conditions
    of such request, acquisition proposal or inquiry and the
    identity of the person making such request, acquisition proposal
    or inquiry and will keep Appleseed&#146;s fully informed of the
    status and details of any such request, acquisition proposal or
    inquiry. These obligations also apply in respect of any person
    with whom we have contact during the Go Shop Period.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The term &#147;acquisition proposal&#148; is defined in the
    merger agreement as any offer or proposal for, or any indication
    of interest in:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    any direct or indirect acquisition or purchase of 15% or more of
    the total assets of our company and our subsidiaries, in a
    single transaction or series of transactions;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    any direct or indirect acquisition or purchase of 15% or more of
    any class of our equity securities or of any of our
    subsidiaries, in a single transaction or series of transactions;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    any tender offer or exchange offer, including a self-tender
    offer, that if consummated would result in any person
    beneficially owning 15% or more of any class of our equity
    securities or of any of our subsidiaries;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    any merger, consolidation, share exchange, business combination,
    recapitalization, reclassification or other similar transaction
    involving us or any of our subsidiaries;&#160;or
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    any public announcement of an agreement, proposal, plan or
    intention to do any of the foregoing, other than the
    transactions contemplated by the merger agreement.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The term &#147;superior proposal&#148; is defined in the merger
    agreement as any bona fide written acquisition proposal by a
    person that our board of directors has determined in good faith,
    after consultation with an independent financial advisor of
    nationally recognized reputation, is more favorable from a
    financial point of view to our stockholders than the merger and
    is reasonably capable of being consummated in a timely manner,
    taking into account all financial, regulatory, legal and other
    aspects of such proposal, and for which the person making such
    acquisition proposal has delivered satisfactory written evidence
    to our board of directors that the consummation of such
    acquisition proposal is not contingent on the receipt of
    financing.
</DIV>
<A name='128'>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Employee
    Benefit Plans</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Under the merger agreement, Appleseed&#146;s has agreed that it
    will, and will cause the surviving corporation to:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    honor in accordance with their terms as in effect from time to
    time all of our and our subsidiaries&#146; benefit plans that
    were disclosed by us in a schedule to Appleseed&#146;s and BLR
    Acquisition;
</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    31
</DIV><!-- END LOGICAL PAGE -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    for 18&#160;months following the closing of the merger, provide
    Blair&#146;s and our subsidiaries&#146; active employees with
    base salary or base wages, as applicable, and employee benefits
    that are in the aggregate no less favorable than the salary,
    wages and employee benefits (excluding any stock purchase plans
    and other equity-based benefits, defined benefit plans and
    retiree medical benefits) being provided to such active
    employees as of January&#160;23, 2007;&#160;and
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    subject to certain exceptions, honor all benefit obligations to,
    and contractual rights of, former employees of our company, as
    well as all employment, severance, deferred compensation, split
    dollar, supplemental retirement or
    <FONT style="white-space: nowrap">change-in-control</FONT>
    agreements, plans or policies of our company as in effect from
    time to time.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition, employees of our company who remain employed by the
    surviving corporation and its subsidiaries following the
    completion of the merger whose employment is terminated
    following the effective time of the merger will be entitled to
    receive severance payments and benefits in accordance with the
    severance plans and benefits as in effect from time to time
    provided by the surviving corporation and its employees to its
    former employees.
</DIV>
<A name='129'>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Warren
    Charitable Contributions After the Merger</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    During the three year period immediately following the closing
    of the merger, Appleseed&#146;s has agreed to cause the
    surviving corporation, and the surviving corporation has agreed,
    to, at a minimum, contribute to charitable organizations that
    serve the Warren, Pennsylvania area/community on a basis
    consistent with the past practices of our company and our
    subsidiaries.
</DIV>
<A name='130'>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Indemnification;
    Directors&#146; and Officers&#146; Insurance</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The merger agreement provides that, after the merger, the
    surviving corporation will undertake certain indemnification
    obligations with respect to individuals who are now, or have
    been at any time prior to the execution of the merger agreement
    or who become such prior to the effective time of the merger, a
    director or officer of our company or any of its subsidiaries,
    or an employee or agent of our company. Additionally, the merger
    agreement provides that the surviving corporation will provide,
    for a period of six years after the merger becomes effective,
    directors&#146; and officers&#146; liability insurance covering
    certain persons. See &#147;&#151;&#160;Interests of Our
    Directors and Executive Officers in the Merger&#160;&#151;
    Indemnification and Insurance&#148; on page&#160;41 for a more
    detailed discussion of these obligations.
</DIV>
<A name='131'>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Stockholder
    Meeting</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Pursuant to the merger agreement, we are required to call a
    special meeting of our stockholders to consider and vote upon
    approval and adoption of the merger agreement. Also, our board
    of directors is required to recommend that our stockholders
    adopt the merger agreement, subject to the circumstances
    described under &#147;&#151;&#160;No Solicitation and Go Shop
    Period&#148; beginning on page&#160;30.
</DIV>
<A name='132'>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Reasonable
    Efforts</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Subject to certain exceptions, prior to the effective time of
    the merger, Appleseed&#146;s, BLR Acquisition and our company
    have agreed to use all reasonable efforts to take, or cause to
    be taken, all such actions as may be necessary or appropriate or
    advisable under applicable laws, so as to permit consummation of
    the transactions as promptly as practicable on the terms and
    subject to the conditions set forth in the merger agreement and
    to cooperate fully to that end.
</DIV>
<A name='133'>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Certain
    Other Covenants</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The merger agreement contains additional covenants of each of
    Appleseed&#146;s, BLR Acquisition, and our company, including
    covenants relating to:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the filing of a proxy statement by us to solicit our
    stockholders to consider and hold a special meeting of our
    stockholders to vote on the proposal to adopt the merger
    agreement;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the filing and seeking of all consents, approvals, permits,
    authorizations, and waivers from governmental authorities or
    third parties necessary to consummate the merger and related
    transactions;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our providing Appleseed&#146;s, BLR Acquisition and their
    representatives with access to offices and other facilities and
    to our books and records, personnel and our representatives;
</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    32
</DIV><!-- END LOGICAL PAGE -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the prompt notification in writing by each party to the others
    of:
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="6%"></TD>
    <TD width="2%"></TD>
    <TD width="92%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    receipt of any notice or other communication from any third
    party alleging that the consent of such third party is or may be
    required in connection with the transactions contemplated by the
    merger agreement;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    any company material adverse effect or purchaser material
    adverse effect, each as defined above;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    any claims, actions, proceedings or governmental investigations
    commenced or, to its knowledge, threatened, involving or
    affecting Blair or any of its subsidiaries or any of their
    property or assets;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the occurrence, or failure to occur, of any event that would be
    likely to cause any representation or warranty made by such
    party contained in the merger agreement to be untrue or
    inaccurate in any material respect;&#160;and
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    any failure of Appleseed&#146;s, BLR Acquisition or us, as the
    case may be, or of any officer, director, employee or agent
    thereof, to comply with or satisfy any covenant, condition or
    agreement to be complied with or satisfied by it hereunder.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    cooperation between the parties regarding press releases and
    other public statements with respect to the merger;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our commitment not to terminate, amend, modify or waive any
    material provision of any confidentiality or standstill
    agreement to which we are a party and to enforce, to the fullest
    extent permitted under applicable law, the provisions of any
    such agreements;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our filing on a timely basis all SEC periodic reports and proxy
    statements required under the Exchange Act, the Securities Act
    and the published rules and regulations of the SEC under either
    of the foregoing applicable to such SEC reports and proxy
    statements;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our agreement not to settle any litigation currently pending, or
    commenced after January&#160;23, 2007, against us or any of our
    directors by any of our stockholders that relates to the merger
    agreement or the merger, without the prior written consent of
    Appleseed&#146;s;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our agreement not to voluntarily cooperate with any third party
    which has sought or may hereafter seek to restrain or prohibit
    or otherwise oppose the merger and to cooperate with
    Appleseed&#146;s to resist any such effort to restrain or
    prohibit or otherwise oppose the merger;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    take or cause to be taken, all actions necessary to delist our
    common shares from the American Stock Exchange and to terminate
    the registration of our common shares under the Exchange Act
    effective after the effective time of the merger;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our providing all cooperation reasonably requested by
    Appleseed&#146;s in connection with the arrangement of financing
    to be obtained by Appleseed&#146;s in connection with the
    transactions (provided, however, the completion of any financing
    is not a condition to the obligation of Appleseed&#146;s or BLR
    Acquisition to effect the merger);
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    each party providing the other with the opportunity to
    participate in the defense of any stockholder litigation against
    Appleseed&#146;s, BLR Acquisition, or us or their respective
    directors that relates to the merger;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    cooperation with the preparation, execution and filing of tax
    returns, questionnaires, applications or other documents;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our taking no action to call a special meeting of our
    stockholders without Appleseed&#146;s prior consent unless so
    compelled by legal process or the merger agreement is
    terminated;&#160;and
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our taking all reasonable steps, at Appleseed&#146;s request, to
    assist in any challenge by Appleseed&#146;s to the validity or
    applicability to the transactions, including the merger, of any
    state takeover law.
</TD>
</TR>

</TABLE>
<A name='134'>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Conditions
    to the Merger</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Completion of the merger is subject to the satisfaction of
    certain conditions set forth in the merger agreement, or the
    waiver of such conditions by the party entitled to do so, at or
    before the effective time of the merger. Each of the
    parties&#146; obligations to consummate the merger is subject to
    the following mutual conditions:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the requisite holders of shares of our common stock having
    adopted the merger agreement;
</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    33
</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    no law, rule, regulation, executive order or decree, judgment,
    injunction, ruling or other order may have been enacted, issued,
    promulgated, enforced or entered by a governmental entity that
    is in effect and has the effect of preventing or prohibiting the
    consummation of the merger or otherwise imposes material
    limitations on the ability of BLR Acquisition and
    Appleseed&#146;s to effectively acquire or hold our business and
    those of our subsidiaries;&#160;and
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    all regulatory approvals or waivers required to consummate the
    transactions contemplated by the merger agreement having been
    obtained and remaining in full force and effect, and all
    statutory waiting periods in respect thereof having expired.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition to the mutual conditions set forth above, the
    obligations of BLR Acquisition and Appleseed&#146;s to
    consummate the merger is subject to the following conditions,
    which may be waived in writing by Appleseed&#146;s:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our &#147;identified company representations,&#148; as defined
    below, being true and correct in all respects and all our other
    representations and warranties in the merger agreement being
    true and correct in all material respects as of the date of the
    merger agreement and as of the closing date of the merger as
    though made on and as of the closing date, except for those
    representations or warranties that address matters only as of a
    particular date; provided that, in the event of a breach of a
    representation or warranty other than an identified company
    representation, this condition shall be deemed satisfied unless
    the effect of all such breaches of representations and
    warranties taken together has had, or could reasonably be
    expected to have, a company material adverse effect, as defined
    below;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our having, in all material respects, performed all obligations
    and complied with all agreements and covenants required to be
    performed by us or complied with by us under the merger
    agreement at or prior to the effective time of the merger;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    since December&#160;31, 2005, no effect, event or change having
    occurred which has had, or would reasonably be expected to have,
    a company material adverse effect, whether or not such effect,
    event or change was disclosed by us in a schedule to
    Appleseed&#146;s and BLR Acquisition, other than any such
    effect, event or change that has been previously disclosed in
    our SEC periodic reports or proxy statements filed on or prior
    to January&#160;23, 2007;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the holders of not more than 15% of our outstanding common stock
    having demanded appraisal of their shares;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Appleseed&#146;s having received a certificate from our chief
    executive officer and chief financial officer with respect to
    the satisfaction of the conditions set forth above relating to
    our representations and warranties and covenants and agreements;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Appleseed&#146;s having received certified copies of:
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="6%"></TD>
    <TD width="2%"></TD>
    <TD width="92%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the resolutions duly adopted by our board of directors
    authorizing the execution, delivery and performance of the
    merger agreement and the transactions contemplated thereby;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the resolutions duly adopted by our stockholders adopting the
    merger agreement;&#160;and
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our certificate of incorporation and bylaws as in effect
    immediately prior to the effective time of the merger;&#160;and
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Appleseed&#146;s having received signed letters of resignation
    from each of our directors and each of the directors of our
    subsidiaries pursuant to which each such director resigns from
    his or her position as a director of Blair or such subsidiary
    and makes such resignation effective at or prior to the
    effective time of the merger.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition to the mutual conditions set forth above, our
    obligation to consummate the merger is subject to the following
    conditions, which may be waived in writing by us:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the representations and warranties of BLR Acquisition and
    Appleseed&#146;s in the merger agreement being true and correct
    as of the date of the merger agreement and as of the closing
    date of the merger as though made on and as of the closing date,
    except for those representations or warranties that address
    matters only as of a particular date, provided that, in the
    event of a breach of a representation or warranty, this
    condition shall be
</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    34
</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>
</TD>
    <TD align="left">
    deemed satisfied unless the effect of all such breaches of
    representations and warranties taken together has had, or could
    reasonably be expected to have, a purchaser material adverse
    effect, as defined below;
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    BLR Acquisition and Appleseed&#146;s having, in all material
    respects, performed all obligations and complied with all
    agreements and covenants required to be performed by them or
    complied with by them pursuant to the merger agreement at or
    prior to the effective time of the merger;&#160;and
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our having received certified copies of:
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="6%"></TD>
    <TD width="2%"></TD>
    <TD width="92%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the resolutions duly adopted by each of BLR Acquisition&#146;s
    and Appleseed&#146;s boards of directors authorizing the
    execution, delivery and performance of the merger agreement and
    the transactions contemplated thereby,
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the resolutions duly adopted by BLR Acquisition&#146;s
    stockholders approving the merger agreement and the transactions
    contemplated thereby,&#160;and
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the certificate of incorporation and bylaws of each of BLR
    Acquisition and Appleseed&#146;s, in each case, as in effect
    immediately prior to the effective time of the merger.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Under the terms of the merger agreement, &#147;identified
    company representations&#148; means (i)&#160;any of our
    representations or warranties qualified by a company material
    adverse effect, (ii)&#160;our representations or warranties
    regarding the performance of our obligations under the merger
    agreement, and (iii)&#160;our representations and warranties
    relating to our capitalization, authority to enter into the
    merger agreement and consummate the transactions contemplated by
    the merger agreement, absence of undisclosed
    <FONT style="white-space: nowrap">change-of-control</FONT>
    payments, absence of undisclosed brokers fees, amendments to any
    rights plan and our activities between January&#160;1, 2007 and
    the date of the merger agreement, other than unintentional
    inaccuracies in the representations and warranties referred to
    in this clause&#160;(iii) that would result in an increase in
    the aggregate merger consideration payable by BLR Acquisition
    and Appleseed&#146;s in an amount not to exceed $350,000.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Further, &#147;company material adverse effect&#148; means any
    fact, event, circumstance or effect that (i)&#160;is material
    and adverse to our business, financial condition or results of
    operations other than any &#147;excluded matters,&#148; as
    defined in the next sentence or (ii)&#160;prevents or materially
    delays our ability to perform in all material respects our
    obligations under the merger agreement or to consummate the
    transactions contemplated by the merger agreement in accordance
    with the terms of the merger agreement. &#147;Excluded
    Matters&#148; means any one or more of the following
    (i)&#160;changes in laws, rules or regulations of general
    applicability or interpretations thereof by governmental
    authorities, (ii)&#160;changes in United States generally
    accepted accounting principles, (iii)&#160;general changes in
    economic conditions or general changes in the industry in which
    we operate generally which do not have a disproportionate effect
    on us and our subsidiaries taken as a whole, (iv)&#160;a change
    in the market price or trading volume of the common stock, in
    and of itself, provided that a change in the market price or
    trading volume of our common stock may be used, as applicable,
    as evidence that some other effect, circumstance, event, fact,
    transaction or occurrence has had, or is reasonably likely to
    have, a company material adverse effect, (v)&#160;expenses
    incurred in connection with the transactions contemplated by the
    merger agreement which are permitted by the merger agreement,
    (vi)&#160;the payment of any amounts due and payable, or the
    provision of any benefits to, any officer or employee of our
    company or our subsidiaries under employment,
    <FONT style="white-space: nowrap">change-in-control</FONT>
    or severance agreements with respect to any such contractual
    agreement or arrangement as in effect as of the date of the
    merger agreement or any payments made to holders of stock
    options disclosed under the merger agreement, (vii)&#160;changes
    in national or international political or social conditions
    including the engagement by the United States in hostilities,
    whether or not pursuant to the declaration of a national
    emergency or war, or the occurrence of any military or terrorist
    attack upon or within the United States, or any of its
    territories, possessions or diplomatic or consular offices or
    upon any military installation, equipment or personnel of the
    United States, or (viii)&#160;with respect to us, as a result of
    any action or omission taken with the prior written consent of
    BLR Acquisition and Appleseed&#146;s or as otherwise expressly
    permitted by the merger agreement.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Under the terms of the merger agreement, a &#147;purchaser
    material adverse effect&#148; means any effect, circumstance,
    event or fact that prevents or materially delays the ability of
    Appleseed&#146;s and BLR Acquisition to perform in all material
    respects their obligations under the merger agreement or to
    consummate the transactions contemplated by the merger agreement
    in accordance with the terms of the merger agreement.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    35
</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->
<A name='135'>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Regulatory
    Approvals</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Blair, Appleseed&#146;s, and BLR Acquisition have each agreed to
    use all reasonable efforts to complete the transactions
    contemplated by the merger agreement. The merger agreement
    requires that all regulatory approvals or waivers required to
    consummate the transactions, including under the HSR Act, shall
    have been obtained and shall remain in full force and effect and
    all relevant statutory waiting periods shall have expired.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Under the HSR Act and the rules promulgated thereunder, the
    merger cannot be completed until we notify and furnish
    information to the Federal Trade Commission, or the FTC, and the
    Antitrust Division of the U.S.&#160;Department of Justice, or
    the Antitrust Division, and specified waiting period
    requirements are satisfied. We and Appleseed&#146;s filed
    notification and report forms under the HSR Act with the FTC and
    the Antitrust Division on February&#160;28, 2007 and requested
    early termination of the waiting period. The FTC granted early
    termination of the HSR waiting period effective March&#160;9,
    2007. Thus, the transaction has been cleared by the applicable
    antitrust regulatory authorities.
</DIV>
<A name='136'>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Termination
    of the Merger Agreement</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The merger agreement may be terminated and the merger may be
    abandoned at any time prior to the effective time of the merger,
    whether before or after stockholder approval has been obtained,
    as follows:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    by mutual written consent of the parties;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    by Appleseed&#146;s, BLR Acquisitions or Blair, if:
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="6%"></TD>
    <TD width="2%"></TD>
    <TD width="92%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    any governmental entity has issued an order, decree or ruling or
    taken any other action permanently restraining, enjoining or
    otherwise prohibiting the merger and such order or other action
    is final and non-appealable, provided, however, that the party
    seeking to terminate the merger agreement shall have taken
    commercially reasonable efforts to have such order, decree,
    ruling or other action vacated and shall have used all
    reasonable efforts so as to permit consummation of the
    transactions contemplated by the merger agreement;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the closing has not occurred on or before July&#160;23, 2007, or
    the &#147;Termination Date&#148;; provided that the right to
    terminate the merger agreement pursuant to this section will not
    be available to a party seeking to terminate whose failure to
    perform any of its covenants or obligations under the merger
    agreement caused or resulted in the failure of the closing to
    occur prior to the Termination Date;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    any state or federal law, order, rule or regulation exists that
    makes the completion of the merger illegal or otherwise
    prohibited;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Blair&#146;s stockholders do not adopt the merger agreement at
    the special meeting (or any postponement or adjournment thereof);
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the merger has not been completed on or prior to the Termination
    Date as a result of a breach by BLR or Appleseed&#146;s of any
    of their respective covenants or agreements in the merger
    agreement such that the closing condition with respect thereto
    would not be satisfied or a breach by BLR or Appleseed&#146;s of
    any of their respective representations and warranties in the
    merger agreement such that the closing condition with respect
    thereto would not be satisfied and, in either such case, such
    breach is not cured within 30&#160;days after receipt by BLR and
    Appleseed&#146;s;&#160;and
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    there is a material breach by the non-terminating party of any
    of its representations, warranties, covenants or agreements in
    the merger agreement such that the closing conditions with
    respect thereto would not be satisfied and such breach has not
    been cured within 30&#160;days following notice by the
    terminating party or cannot be cured by the Termination Date,
    provided that there is no cure period for the breach by Blair of
    certain covenants and guaranties related to Blair&#146;s
    non-solicitation obligation, and Blair&#146;s obligations
    related to the proxy statement and special stockholders&#146;
    meeting;
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    by Blair if:
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="6%"></TD>
    <TD width="2%"></TD>
    <TD width="92%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    prior to the approval and adoption of the merger agreement by
    our stockholders, our board of directors approves a superior
    proposal in accordance with the terms of the merger agreement
    described above under the section &#147;&#151;&#160;No
    Solicitation and Go Shop Period&#148; beginning on
    page&#160;30;&#160;and
</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    36
</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    by Appleseed&#146;s or BLR Acquisition if:
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="6%"></TD>
    <TD width="2%"></TD>
    <TD width="92%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our board of directors withdraws or modifies, in a manner
    adverse to Appleseed&#146;s or BLR Acquisition its
    recommendation that Blair&#146;s stockholders adopt the merger
    agreement;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our board of directors fails within two (2)&#160;business days
    of Appleseed&#146;s or BLR Acquisition&#146;s written request to
    reaffirm its recommendation of the merger agreement;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our board of directors approves or recommends to Blair&#146;s
    stockholders, or takes no position with respect to or fails to
    recommend against acceptance of any acquisition proposal;&#160;or
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Blair fails to call a special meeting of Blair stockholders
    within 35&#160;days of mailing this proxy statement.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In some cases, termination of the merger agreement may require
    us to pay a termination fee to Appleseed&#146;s
    <FONT style="white-space: nowrap">and/or</FONT>
    reimburse Appleseed&#146;s for certain reasonable actual
    expenses, or require Appleseed&#146;s to pay a termination fee
    to us, as described below under &#147;&#151;&#160;Termination
    Fees.&#148;
</DIV>
<A name='137'>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Effect of
    Termination</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In the event the merger agreement is terminated as described
    above, neither we nor Appleseed&#146;s or BLR Acquisition will
    have any liability thereunder, except as set forth under
    &#145;&#145;&#151;&#160;Termination Fees&#148; below or in
    respect of certain specified covenants that survive termination.
    However, termination of the merger agreement will not relieve
    either us or Appleseed&#146;s or BLR Acquisition of any
    liability for fraud or for any knowing or willful breach of any
    of its representations, warranties or covenants contained in the
    merger agreement.
</DIV>
<A name='138'>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Termination
    Fees</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We have agreed to pay Appleseed&#146;s a termination fee of
    approximately $6.0&#160;million and reimburse reasonable actual
    expenses of Appleseed&#146;s concurrently with the termination
    of the merger agreement if:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Blair or Appleseed&#146;s terminates the merger agreement
    because the merger has not occurred by the Termination Date or
    because Blair&#146;s stockholders do not adopt the merger
    agreement at the special meeting (or any postponement or
    adjournment thereof), and, in any such case, prior to
    termination an acquisition proposal shall have been made to
    Blair or any of its subsidiaries or any person shall have
    publicly announced an intention to make an acquisition proposal;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Blair terminates the merger agreement because the board of
    directors approves a superior proposal in accordance with the
    terms of the merger agreement described under
    &#147;&#151;&#160;No Solicitation and Go Shop Period&#148;
    beginning on page&#160;30 and our board of directors has
    determined in good faith after consultation with outside legal
    counsel that such action is necessary for it to comply with its
    duties to our stockholders under applicable law;&#160;and
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Appleseed&#146;s or BLR Acquisition terminates the merger
    agreement because
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="6%"></TD>
    <TD width="2%"></TD>
    <TD width="92%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our board of directors withdraws or modifies in a manner adverse
    to Appleseed&#146;s or BLR Acquisition its recommendation that
    our stockholders adopt the merger agreement,
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our board of directors fails within two (2)&#160;business days
    of Appleseed&#146;s or BLR Acquisition&#146;s written request to
    reaffirm its recommendation of the merger agreement,
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our board of directors approves or recommends to our
    stockholders, or takes no position with respect to or fails to
    recommend against acceptance of any acquisition proposal,&#160;or
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Blair fails to call a special meeting of our stockholders within
    35&#160;days of mailing this proxy statement.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Appleseed&#146;s has agreed to pay us a termination fee of
    approximately $6.0&#160;million concurrently with termination of
    the merger agreement if:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="6%"></TD>
    <TD width="2%"></TD>
    <TD width="92%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    either we or Appleseed&#146;s terminates the merger agreement
    because the merger has not been completed on or prior to the
    Termination Date as a result of a breach by Appleseed&#146;s or
    BLR Acquisition of any of their respective covenants or
    agreements in the merger agreement such that the closing
    condition with respect thereto would not be satisfied or a
    breach by Appleseed&#146;s or BLR Acquisition of any of their
    respective representations and warranties in the merger
    agreement such that the closing condition with respect
</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    37
</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="6%"></TD>
    <TD width="2%"></TD>
    <TD width="92%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>
</TD>
    <TD align="left">
    thereto would not be satisfied and, in either such case, such
    breach is not cured within 30&#160;days after receipt by
    Appleseed&#146;s and BLR Acquisition of written notice
    thereof;&#160;and
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="6%"></TD>
    <TD width="2%"></TD>
    <TD width="92%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    at any time prior to the effective time of the merger, we
    terminate the merger because there is a breach by
    Appleseed&#146;s or BLR Acquisition of any of their
    representations, warranties, covenants or agreements in the
    merger agreement such that the closing conditions with respect
    thereto would not be satisfied and such breach has not been
    cured within 30&#160;days following written notice by us.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition, we have agreed to reimburse Appleseed&#146;s and
    BLR Acquisition for certain expenses if:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="6%"></TD>
    <TD width="2%"></TD>
    <TD width="92%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Appleseed&#146;s terminates the merger agreement due to a breach
    of by us of our covenants, representations or warranties
    (subject to certain cure rights);&#160;or
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    either we or Appleseed&#146;s terminates the merger agreement as
    a result of the stockholders failing to adopt the merger
    agreement at the special stockholders meeting (or any
    postponement or adjournment thereof), regardless of whether an
    acquisition proposal had then been made or whether any person
    had publicly announced an intention to make an acquisition
    proposal.
</TD>
</TR>

</TABLE>
<A name='139'>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Amendment
    and Waiver of the Merger Agreement</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The merger agreement may be amended by Appleseed&#146;s BLR
    Acquisition and our company at any time before or after it is
    adopted by our stockholders; provided, however, that after any
    such approval, there shall not be made any amendment that by law
    requires the further approval by such stockholders without such
    further approval.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The merger agreement also provides that, at any time prior to
    the effective time of the merger, Appleseed&#146;s, BLR
    Acquisition or our company may, by written agreement:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    extend the time for the performance of any of the obligations or
    other acts of the other parties to the merger agreement;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    waive any inaccuracies in the representations and warranties
    contained in the merger agreement or in any document delivered
    pursuant to the merger agreement;&#160;or
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    waive compliance with any of the agreements or conditions
    contained in the merger agreement which may be legally waived.
</TD>
</TR>

</TABLE>
<A name='140'>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Interests
    of Our Directors and Executive Officers in the Merger</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>General.</I>&#160;&#160;In considering the recommendation of
    the board of directors with respect to the merger, you should be
    aware that some of Blair&#146;s executive officers have
    interests in the merger that may be different from, or in
    addition to, the interests of our stockholders generally. These
    interests, to the extent material, are described below. Our
    board of directors was aware of these interests and considered
    them, among other matters, in unanimously approving the merger
    agreement and the merger. See &#147;&#160;&#151; Our Reasons for
    the Merger&#148; beginning on page&#160;16.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Change in Control Agreements.</I>&#160;&#160;We have entered
    into Change in Control Agreements, or &#147;CIC
    agreements&#148;, with certain of our current executive
    officers, or &#147;covered executive officers&#148;, which
    provide for certain benefits to be paid upon a termination of
    service following a change in control of Blair. In addition,
    under the terms of the CIC agreements, upon the occurrence of a
    change in control of Blair, covered executive officers will be
    entitled to certain benefits including immediate vesting of all
    restricted stock and other lump sum payments, regardless of
    whether the executive&#146;s employment is terminated. The
    merger will constitute a change in control of Blair under each
    CIC agreement.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Cash Severance Payment.</I>&#160;&#160;Pursuant to each CIC
    agreement, upon occurrence of a change in control, followed by
    termination of a covered executive officer&#146;s employment
    within three years following the change in control (except if
    such termination is because of death, disability, retirement or
    termination for cause), we will pay such covered executive
    officer, or in the event of his subsequent death, his
    beneficiary or beneficiaries, or his estate, as the case may be,
    a cash lump sum equal to (i)&#160;three times (two times in the
    case of Messrs.&#160;Blair, Hotchkiss, Parnell, Rowe, Scalise,
    and Vicini and Ms.&#160;Dziendziel and Ms.&#160;English) his or
    her base salary at the rate of such covered executive
    officer&#146;s base salary per annum in effect immediately prior
    to the change in control or on the date of his or her
    termination, whichever is higher, plus (ii)&#160;the greater of
    (x)&#160;the average annual incentive bonus payment earned by
    such covered executive officer under our Annual Incentive Plan
    in respect of our three most recent complete fiscal years
    preceding the date of the termination of such covered executive
    officer&#146;s employment or (y)&#160;the target
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    38
</DIV><!-- END LOGICAL PAGE -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    incentive bonus award under our Annual Incentive Plan for the
    year in which the change in control occurs or the year in which
    their termination occurs, whichever is higher.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition, each covered executive officer has the right to
    elect to voluntarily terminate his or her employment within
    three years following a change in control and receive the cash
    payment described in the preceding paragraph in the event that
    such covered executive officer suffers any of the following
    during such period: (A)&#160;any material demotion, (B)&#160;any
    material loss of title, office, or significant authority or
    responsibility, (C)&#160;any material reduction in annual
    compensation or benefits, (D)&#160;relocation of such covered
    executive officer&#146;s principal office by more than
    50&#160;miles from its location immediately prior to the change
    in control, or (E)&#160;failure by us to obtain satisfactory
    agreement from any successor to assume the obligations and
    liabilities of their CIC agreement. The CIC agreements for
    Messrs.&#160;Elliot, Pitorak, Zawacki and Lopez and
    Ms.&#160;Garrett also provide that they may voluntarily
    terminate their employment for any reason during a
    <FONT style="white-space: nowrap">30-day</FONT>
    period commencing on the first anniversary of the date of a
    change in control or control and receive the cash payments
    described in the preceding paragraph.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Long Term Incentive Plan.</I>&#160;&#160;Pursuant to each CIC
    agreement, upon the occurrence of a change in control, we will
    pay each covered executive officer a cash lump sum equal to
    three times (two times in the case of Messrs.&#160;Blair,
    Hotchkiss, Parnell, Rowe, Scalise, and Vicini and
    Ms.&#160;Dziendziel and Ms.&#160;English) the current target
    award opportunities of such covered executive officer under the
    Long Term Incentive Plan. The awards under the Long Term
    Incentive Plan are based on Blair&#146;s performance over a
    three-year period, and each executive may have more than one
    outstanding award opportunity under the Long Term Incentive Plan
    (for instance, an award opportunity for the
    <FONT style="white-space: nowrap">2005-2007</FONT>
    period as well as an award for the
    <FONT style="white-space: nowrap">2006-2008</FONT>
    period might be outstanding), and the covered executive officer
    would be entitled to receive three times (two times in the case
    of Messrs.&#160;Blair, Hotchkiss, Parnell, Rowe, Scalise, and
    Vicini and Ms.&#160;Dziendziel and Ms.&#160;English) the amount
    of all such outstanding target award opportunities. These
    amounts become payable immediately upon the occurrence of a
    change of control, regardless of whether the covered executive
    officer will remain employed by Blair following the change of
    control.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Profit Sharing Plan.</I>&#160;&#160;Pursuant to each CIC
    agreement, in the event a covered executive officer is
    terminated or voluntarily terminates his employment in the
    circumstances which would result in the covered executive
    officer being paid the cash severance payment described above,
    we will pay to each covered executive officer a cash amount
    equal to the contribution we would have made for such covered
    executive officer under our defined contribution retirement
    plans (currently, Blair&#146;s Savings Plan and Profit Sharing
    and 401(k) Plan). The amount we are required to contribute is
    equal to the amount that we would have contributed or credited
    to such plans (including both profit-sharing contributions and
    Company matching contributions in respect of covered
    executive&#146;s contributions to the plan) had the covered
    executive officer continued to be employed by us for an
    additional three years (two years in the case of
    Messrs.&#160;Blair, Hotchkiss, Parnell, Rowe, Scalise, Vicini
    and Ms.&#160;Dziendziel and Ms.&#160;English) at an annual
    compensation equal to the sum of (x)&#160;the covered executive
    officer&#146;s base salary immediately prior to the change in
    control or at the time of the termination of the covered
    executive officer&#146;s employment, whichever is higher and
    (y)&#160;the greater of (A)&#160;the average annual incentive
    bonus payment earned by the covered executive officer under our
    Annual Incentive Plan (or any successor plan) in respect of our
    three most recent complete fiscal years preceding the date of
    the termination of the covered executive officer&#146;s
    employment or the date of the change in control, whichever is
    higher, or (B)&#160;the target incentive bonus award under our
    Annual Incentive Plan (or any successor plan) for the year in
    which the change in control occurs or the year in which the
    termination of the covered executive officer&#146;s employment
    occurs, whichever is higher. For purposes of this calculation,
    it is assumed that the covered executive officer made the
    maximum permissible contributions to such plans during such
    period. Such contributions will be deemed to have been made
    immediately prior to the termination of the covered executive
    officer&#146;s employment. Our contribution shall equal the
    average contribution based on our performance over the most
    recently ended three-year period. All vesting restrictions on
    our contributions shall lapse immediately upon a change in
    control.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Welfare Benefits.</I>&#160;&#160;In the event a covered
    executive officer is terminated or voluntarily terminates his
    employment in the circumstances which would result in the
    covered executive officer being paid the cash severance payment
    described above, we will continue life and medical insurance
    coverage, including any dental, vision, long-term disability or
    other insurance-related program, substantially equivalent to the
    coverage maintained for such covered executive officer and his
    eligible dependents prior termination, except to the extent such
    coverage may be changed in its application to all of our
    employees on a nondiscriminatory basis. Such coverage and
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    39
</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    payments shall cease upon the expiration of the number of months
    in the covered officer&#146;s severance period following his or
    her termination.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Outplacement Services.</I>&#160;&#160;In the event a covered
    executive officer is terminated or voluntarily terminates his
    employment in the circumstances which would result in the
    covered executive officer being paid the cash severance payment
    described above, we will for the term of the covered executive
    officer&#146;s severance period, not to exceed 10% of the
    covered executive officer&#146;s base salary at the rate per
    annum in effect immediately prior to the change in control or on
    the date of the termination of the covered executive
    officer&#146;s employment, whichever is higher, reimburse
    covered executive officers for outplacement services, the scope
    and provider of which shall be selected by the covered executive
    officer in his sole discretion.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The table below estimates the amount each of our covered
    executive officers will be entitled to under the terms of each
    CIC agreement in the event such covered executive officer is
    terminated or such covered executive officer voluntarily
    terminates his employment in the circumstances which would
    result in the covered executive officer being paid the cash
    severance payment described above. These estimates are based on
    compensation and benefits levels in effect on January&#160;31,
    2007 and assumes a separation date of May&#160;1, 2007.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 8pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="25%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="5%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="5%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=05 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=05 type=lead -->
    <TD width="2%" align="right">&nbsp;</TD>	<!-- colindex=05 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=05 type=hang1 -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=06 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=06 type=lead -->
    <TD width="4%" align="right">&nbsp;</TD>	<!-- colindex=06 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=06 type=hang1 -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=07 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=07 type=lead -->
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    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=07 type=hang1 -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=08 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=08 type=lead -->
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    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=08 type=hang1 -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=09 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=09 type=lead -->
    <TD width="2%" align="right">&nbsp;</TD>	<!-- colindex=09 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=09 type=hang1 -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=10 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=10 type=lead -->
    <TD width="2%" align="right">&nbsp;</TD>	<!-- colindex=10 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=10 type=hang1 -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=11 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=11 type=lead -->
    <TD width="5%" align="right">&nbsp;</TD>	<!-- colindex=11 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=11 type=hang1 -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=12 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=12 type=lead -->
    <TD width="4%" align="right">&nbsp;</TD>	<!-- colindex=12 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=12 type=hang1 -->
</TR>
<TR style="font-size: 6pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>CIC Profit<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 6pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Long-Term<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Sharing<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 6pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>CIC Annual<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Performance<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Contribution for<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 6pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>CIC<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Present Value<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Incentive<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Share<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Forecasted<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 6pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Period<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>of CIC Cost<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>CIC<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>401(k)<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Target<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Program<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>&#146;07/&#146;08/&#146;09 FY<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>CIC<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>CIC<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>CIC<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>CIC<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 6pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Name</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Weeks</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>(6% discount)</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Paid Time Off</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>&#147;Match&#148;</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Award</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Target Award</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Results</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Health</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Life</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Outplacement</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Total Cost</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -7pt; margin-left: 7pt">
    <FONT style="font-size: 8pt">Elliott, David N.&#160;
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    156
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    945,702
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    15,804
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    33,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    413,088
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    584,277
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    18,616
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    20,149
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    1,981
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    34,424
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    2,067,041
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -7pt; margin-left: 7pt">
    <FONT style="font-size: 8pt">Lopez, Adelmo S.&#160;
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    156
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    1,236,270
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    20,739
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    33,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    675,012
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    18,616
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    27,835
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    2,195
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    45,001
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    2,058,668
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -7pt; margin-left: 7pt">
    <FONT style="font-size: 8pt">Zawacki, John E.*
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    1,799,349
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    1,799,349
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -7pt; margin-left: 7pt">
    <FONT style="font-size: 8pt">Pitorak, Larry J.&#160;
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    156
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    905,531
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    15,823
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    33,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    395,541
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    18,616
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    1,895
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    32,962
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    1,403,368
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -7pt; margin-left: 7pt">
    <FONT style="font-size: 8pt">Garrett, Audrey C.&#160;
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    156
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    806,447
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    24,773
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    33,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    352,260
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    18,616
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    18,199
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    1,688
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    29,355
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    1,284,337
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -7pt; margin-left: 7pt">
    <FONT style="font-size: 8pt">Scalise, Randall A.&#160;
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    104
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    471,156
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    24,123
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    22,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    154,353
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    155,300
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    11,588
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    18,557
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    987
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    25,725
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    883,788
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -7pt; margin-left: 7pt">
    <FONT style="font-size: 8pt">Rowe, Michael A.&#160;
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    104
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    471,385
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    21,720
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    22,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    154,428
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    155,300
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    11,588
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    18,557
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    987
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    25,738
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    881,701
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -7pt; margin-left: 7pt">
    <FONT style="font-size: 8pt">Vicini, Lawrence R.&#160;
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    104
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    464,756
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    21,851
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    22,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    152,256
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    155,300
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    11,588
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    13,433
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    972
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    25,376
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    867,531
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -7pt; margin-left: 7pt">
    <FONT style="font-size: 8pt">Parnell, Jeffrey H.&#160;
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    104
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    435,766
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    8,583
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    22,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    142,759
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    155,300
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    11,588
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    18,557
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    910
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    23,793
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    819,255
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -7pt; margin-left: 7pt">
    <FONT style="font-size: 8pt">Dziendziel, Cynthia L.&#160;
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    104
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    333,901
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    12,331
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    17,312
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    109,387
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    78,610
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    10,409
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    18,557
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    699
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    18,231
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    599,436
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -7pt; margin-left: 7pt">
    <FONT style="font-size: 8pt">English, Beth W.&#160;
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    104
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    325,901
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    14,529
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    17,021
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    106,766
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    10,305
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    680
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    17,794
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    492,997
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -7pt; margin-left: 7pt">
    <FONT style="font-size: 8pt">Hotchkiss, Herbert G.&#160;
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    104
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    264,111
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    11,202
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    17,016
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    51,914
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    7,130
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    18,557
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    553
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    14,421
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    384,904
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -7pt; margin-left: 7pt">
    <FONT style="font-size: 8pt">Blair, Daniel R.&#160;
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    104
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    214,702
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    6,124
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    11,041
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    58,614
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    55,716
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    6,568
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    19,285
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    449
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    11,723
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    384,222
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="1%"></TD>
    <TD width="99%"></TD>
</TR>

<TR valign="top" style="font-size: 8pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>    *&#160;</TD>
    <TD align="left">
    Mr.&#160;Zawacki has agreed to waive his rights to certain
    payments and benefits due to him under his CIC agreement in
    light of his planned retirement prior to the merger.
    Mr.&#160;Zawacki will receive a Target Award payment under our
    Long-Term Performance Share Program.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Golden Parachutes.</I>&#160;&#160;The CIC agreements for
    Messrs.&#160;Lopez, Elliott, Pitorak and Hotchkiss and
    Ms.&#160;Garrett provide that in the event that any payment or
    benefit, or any combination of payment or benefits, payable to
    the covered executive officer under the CIC agreement
    constitutes an &#147;excess parachute payment&#148; under
    Section&#160;280G of the Internal Revenue Code of 1986, or any
    successor thereto, at the time such determination becomes final,
    we will pay an amount (the
    <FONT style="white-space: nowrap">&#147;gross-up</FONT>
    payment&#148;) which would equal, after deducting all state and
    federal income and excise taxes incurred by the individual with
    respect to receipt of the
    <FONT style="white-space: nowrap">gross-up</FONT>
    payment, the excise tax, if any, imposed pursuant to
    Section&#160;4999 of the Code.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The CIC agreements for the remaining covered executive officers
    (Messrs.&#160;Rowe, Scalise, Vicini, Parnell, and Blair, and Ms.
    Dziendziel and Ms.&#160;English provide that in the event that
    any payment or benefit, or any combination of payment or
    benefits, payable to the covered executive officer under the CIC
    agreement constitutes an &#147;excess parachute payment&#148;
    under Section&#160;280G of the Internal Revenue Code of 1986, or
    any successor thereto, and in order to avoid such a result, such
    payment or benefit, or any combination of payment or benefits,
    will be reduced if necessary to the largest amount that will
    result in no portion of the amount payable or right accruing
    under such agreements being subject to an excise tax under
    Section&#160;4999 of the Code.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following table sets forth the total cash value (on a
    present value basis based on the payments and benefits payable
    as described above and the value of restricted shares as
    described below) that each covered executive officer will
    receive if such covered executive officer is terminated in
    connection with the merger, including the amount, if any, of any
    required 280G gross up payments or 280G reduction amounts, as
    applicable, pursuant to such covered executive officer&#146;s
    CIC agreement.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    40
</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="35%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="11%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="10%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="13%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=05 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=05 type=lead -->
    <TD width="12%" align="right">&nbsp;</TD>	<!-- colindex=05 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=05 type=hang1 -->
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Present Value<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Payout Amount<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>of CIC Payments<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>inc. Restricted<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Total Present Value<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Shares</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>280G Reduction</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>280G Tax Gross Up</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Cash Payout</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Lopez, Adelmo S
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    4,291,540
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    1,298,274
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    5,589,814
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Elliott, David N
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    3,253,520
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    831,449
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    4,084,969
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Garrett, Audrey C
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    2,221,784
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    588,078
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    2,809,862
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Pitorak, Larry J
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    1,625,207
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    457,289
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    2,082,497
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Parnell, Jeffrey H
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    1,278,318
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    382,906
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    895,412
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Scalise, Randall A
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    1,229,929
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    233,673
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    996,256
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Rowe, Michael A
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    1,189,885
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    194,691
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    995,194
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Vicini, Lawrence R
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    1,174,882
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    196,307
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    978,576
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Dziendziel, Cynthia L
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    1,060,483
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    616,928
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    443,556
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">English, Beth W
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    969,962
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    658,526
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    311,436
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Hotchkiss, Herbert G
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    597,404
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    138,474
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    735,878
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Blair, Daniel R
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    542,362
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    217,622
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    324,741
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Restricted Shares.</I>&#160;&#160;Pursuant to the Omnibus
    Stock Plan, certain outstanding restricted shares issued to
    covered executive officers vest in full upon a change in
    control. Holders of those outstanding restricted shares are
    entitled to receive a cash lump sum payment equal to the
    federal, state and local income taxes and federal employment
    taxes associated with the recognition of income associated with
    the accelerated vesting of such shares. See
    &#147;&#151;&#160;Treatment of Stock Options and Restricted
    Stock&#148; on page 25. Other restricted shares issued to
    certain covered executive officers (Messrs. Zawacki, Rowe,
    Parnell, Vicini, Blair, Scalise and Ms. English) under the
    Omnibus Stock Plan trigger (i)&#160;immediate repayment of the
    loans (for the discounted purchase price paid by such
    individuals) made by us to such individuals; and (ii)&#160;the
    issuance of such shares, upon a change in control.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following table summarizes the outstanding restricted shares
    held by our covered executive officers as of March&#160;16, 2007
    and the amount of the tax gross up payment that each of them
    will receive in connection with the vesting of certain of those
    restricted shares upon a change of control:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="74%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="8%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="9%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Total Shares</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Tax Gross Up</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Lopez, Al S
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    29,600
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    974,872
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Zawacki, John E
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    25,650
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    440,272
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Elliott, David N
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    16,580
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    481,829
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Garrett, Audrey C
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    13,100
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    380,697
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Dziendziel, Cindy L
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    6,280
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    194,147
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">English, Beth W
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    6,900
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    185,990
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Scalise, Randy A
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5,639
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    111,449
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Rowe, Michael A
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    4,795
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    108,521
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Parnell, Jeffrey H
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    8,855
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    97,500
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Vicini, Larry R
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5,051
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    97,383
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Pitorak, Larry J
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,100
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    90,089
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Herb Hotchkiss
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    85,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Blair, Daniel R
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,465
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    55,197
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    131,015
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    3,302,946
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Vacation/Accrued Leave.</I>&#160;&#160;Pursuant to our
    standard employment policies and procedures, upon termination
    (including upon a change of control), employees including
    covered executive officers will be paid for any accrued vacation
    balance remaining and for any personal time balance remaining.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Indemnification and Insurance.</I>&#160;&#160;The merger
    agreement provides that, after the merger, the surviving
    corporation will indemnify, defend and hold harmless the
    individuals who are now, or have been at any time
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    41
</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    prior to the execution of the merger agreement, a director,
    officer, employee or agent of Blair or any of its subsidiaries,
    against costs, expenses, damages and liabilities incurred in
    connection with any claim, action, suit, proceeding or
    investigation arising out of his or her service as a present or
    former director, officer, fiduciary or employee of Blair or any
    of its subsidiaries or his or her serving at the request of
    Blair or its subsidiaries as a director, officer, employee,
    fiduciary or agent of another corporation, partnership, joint
    venture, trust or other enterprise, and arising out of actual or
    alleged events, actions or omissions occurring or alleged to
    have occurred at or prior to the effective time of the merger.
    This indemnification obligation of the surviving corporation
    shall be to the fullest extent permitted and provided in
    Blair&#146;s certificate of incorporation and bylaws as in
    effect on January&#160;23, 2007, and as permitted under Delaware
    law.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The merger agreement also provides that, prior to the effective
    time of the merger, we will obtain directors&#146; and
    officers&#146; &#147;tail&#148; insurance policies with a claims
    period of six (6)&#160;years from the effective time of the
    merger in an amount and scope no less favorable than our
    existing policy covering claims arising from facts or events
    that occurred on or prior to the effective time at a cost that
    is reasonable and customary for tail insurance policies with our
    existing insurer or an insurer with a comparable insurer
    financial strength rating as our existing insurer. If we shall
    not have obtained this tail policy, the surviving corporation
    will provide the directors and officers who are insured under
    our directors&#146; and officers&#146; insurance policy, for a
    period of not less than six (6)&#160;years after the effective
    time of the merger, with an insurance policy covering events
    occurring at or prior to the effective time of the merger that
    is not less favorable taken as a whole than our existing policy
    (or, if substantially equivalent insurance coverage is
    unavailable, the best available coverage). However, the
    surviving corporation is not required to pay an annual premium
    for this insurance in excess of 250% of the annual premium that
    we currently pay, and if the annual premium of such coverage
    exceeds this amount, the surviving corporation is required to
    use its commercially reasonable efforts to obtain a policy with
    the greatest coverage available for a cost not exceeding such
    amount.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Appleseed&#146;s also agreed to continue in effect for at least
    six years after the effective time of the merger all rights to
    indemnification, advancement of expenses and director
    exculpation existing in favor of any director, executive
    officer, employee or agent of Blair or any of its subsidiaries
    contained in Blair&#146;s certificate of incorporation and
    bylaws as of the effective time of the merger with respect to
    matters occurring at or prior to the effective time of the
    merger.
</DIV>
<A name='141'>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Litigation
    Relating to the Merger</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    On January&#160;24, 2007, Mr.&#160;Richard P. Pogozelski, a
    purported stockholder of our company, filed a complaint styled
    Pogozelski&#160;v. Blair Corporation, (Civil Action
    <FONT style="white-space: nowrap">No.&#160;2695-N)</FONT>
    in the Court of Chancery of the State of Delaware in New Castle
    County against us, certain members of our board of directors and
    Appleseed&#146;s. The complaint alleged, among other things,
    that our directors have not acted reasonably and breached their
    fiduciary duties by failing to maximize stockholder value with
    regard to the proposed acquisition by Appleseed&#146;s. Among
    other things, the complaint sought class action status, a court
    order enjoining us and our directors from proceeding with or
    consummating the merger, compensatory damages, costs and
    expenses and the payment of attorneys&#146; and experts&#146;
    fees. We believe the complaint is without merit and intend to
    defend this lawsuit vigorously. On March&#160;1, 2007, we and
    the other defendants filed a motion to dismiss the class action
    complaint for failure to state a claim upon which relief can be
    granted. As of the date of this proxy statement, the court has
    not ruled on this motion.
</DIV>
<A name='142'>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Material
    Federal Income Tax Consequences of the Merger</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>General.</I>&#160;&#160;The following discussion summarizes
    the material United States federal income tax consequences of
    the merger that are generally applicable to U.S.&#160;holders of
    our common stock upon an exchange of their shares of our common
    stock for cash in the merger. This summary is based upon current
    provisions of the Code, existing treasury regulations and
    current administrative rulings and court decisions, all of which
    are subject to change. Any change, which may or may not be
    retroactive, could materially alter the tax consequences
    expressed in this proxy statement. This discussion assumes that
    you hold our common stock as a capital asset for investment.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    This section does not discuss all of the United States federal
    income tax considerations that may be relevant to a particular
    stockholder in light of his or her individual circumstances or
    to stockholders subject to special treatment under the federal
    income tax laws, including, without limitation:
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    brokers or dealers in securities or foreign currencies;
</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    42
</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    traders;
</TD>
</TR>

<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    stockholders who are subject to the alternative minimum tax
    provisions of the Code;
</TD>
</TR>

<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    tax-exempt organizations;
</TD>
</TR>

<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    stockholders who are foreign persons
    <FONT style="white-space: nowrap">(non-U.S.&#160;holders),</FONT>
    including those who are not citizens or residents of the U.S.;
</TD>
</TR>

<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    expatriates;
</TD>
</TR>

<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    stockholders treated as partnerships for United States federal
    income tax purposes;
</TD>
</TR>

<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    stockholders that have a functional currency other than the
    United States dollar;
</TD>
</TR>

<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    stockholders who do not hold their common stock as a capital
    asset within the meaning of Section&#160;1221 of the Code;
</TD>
</TR>

<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    banks, mutual funds, financial institutions or insurance
    companies;
</TD>
</TR>

<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    stockholders who acquired their common stock in connection with
    stock option or stock purchase plans or in other compensatory
    transactions;&#160;or
</TD>
</TR>

<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    stockholders who hold their common stock as part of an
    integrated investment, including a straddle, hedge, or other
    risk reduction strategy, or as part of a conversion transaction
    or constructive sale.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    This summary does not address the tax consequences of the merger
    under state, local and foreign laws or under United States
    federal tax law other than income tax law. In addition, the
    following discussion generally does not address the tax
    consequences of transactions effectuated before, after, or at
    the same time as the merger, whether or not they are in
    connection with the merger, including, without limitation, the
    exercise or cancellation of options or similar rights to
    purchase stock.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As used in this proxy statement, a &#147;U.S.&#160;holder&#148;
    means a beneficial owner of our common stock who is, for United
    States federal income tax purposes:
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    a citizen or resident of the United States;
</TD>
</TR>

<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    a corporation, partnership, or other entity created or organized
    in the United States or under the law of the United States or
    any state within the United States;
</TD>
</TR>

<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    an estate whose income is includible in gross income for
    U.S.&#160;federal income tax purposes, regardless of its
    source;&#160;or
</TD>
</TR>

<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    a trust whose administration is subject to the primary
    supervision of a U.S.&#160;court and that has one or more
    U.S.&#160;persons who have the authority to control all
    substantial decisions of the trust.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Consequences of the merger to our
    stockholders.</I>&#160;&#160;The receipt of cash by a
    U.S.&#160;holder in exchange for our common stock in the merger
    will be a taxable transaction for United States federal income
    tax purposes. In general, with respect to each share of our
    common stock owned, a U.S.&#160;holder will recognize capital
    gain or loss as a result of the stockholder&#146;s receipt of
    the merger consideration equal to the difference between the
    merger consideration per share of our common stock exchanged in
    the merger and the U.S.&#160;holder&#146;s adjusted tax basis in
    that share. Such gain or loss will be long-term capital gain or
    loss if the U.S.&#160;holder held such share for more than
    12&#160;months as of the effective time of the merger. Certain
    limitations apply to the deductibility of capital losses by
    U.S.&#160;holders.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Backup withholding.</I>&#160;&#160;A U.S.&#160;holder may be
    subject to federal income tax backup withholding at the rate of
    28% (for 2007)&#160;with respect to a payment of cash in the
    merger unless the U.S.&#160;holder:
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    is a corporation or comes within certain other exempt categories
    (including financial institutions, tax-exempt organizations and
    <FONT style="white-space: nowrap">non-U.S.&#160;stockholders)</FONT>
    and, when required, demonstrates this fact;&#160;or
</TD>
</TR>

<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    provides a correct taxpayer identification number and certifies,
    under penalties of perjury, that the U.S.&#160;holder is not
    subject to backup withholding, and otherwise complies with
    applicable requirements of the backup withholding rules.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    To prevent backup withholding and possible penalties, you should
    complete and sign the substitute
    <FONT style="white-space: nowrap">Form&#160;W-9</FONT>
    included in the letter of transmittal, which will be sent to you
    if the merger is completed. Any amount withheld under these
    rules will be credited against the U.S.&#160;holder&#146;s
    United States federal income tax liability, provided the
    required information is furnished to the Internal Revenue
    Service.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    43
</DIV><!-- END LOGICAL PAGE -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>We strongly urge you to consult your own tax advisor as to
    the specific tax consequences to you of the merger, including
    the applicability and effect of United States federal, state,
    local and foreign income and other tax laws, in view of your
    particular circumstances.</B>
</DIV>
<A name='143'>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Expenses
    of the Merger</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We and Appleseed&#146;s are each responsible for all costs and
    expenses incurred in connection with the transactions
    contemplated by the merger agreement, including all fees and
    expenses of outside counsel, investment bankers, banks, other
    financial institutions, accountants, financial printers, experts
    and consultants.
</DIV>
<A name='144'>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Appraisal
    Rights</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Under Delaware law, you have the right to demand appraisal in
    connection with the merger and to receive, in lieu of the merger
    consideration, payment in cash for the fair value of your common
    stock of Blair as determined by the Delaware Court of Chancery.
    Blair stockholders electing to exercise appraisal rights must
    comply with the provisions of Section&#160;262 of Delaware
    General Corporations Law in order to perfect their rights. Blair
    will require strict compliance with the statutory procedures.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following is intended as a brief summary of the material
    provisions of the Delaware statutory procedures required to be
    followed by a stockholder in order to demand and perfect
    appraisal rights. This summary, however, is not a complete
    statement of all applicable requirements and is qualified in its
    entirety by reference to Section&#160;262 of Delaware General
    Corporations Law, the full text of which appears in
    Appendix&#160;C to this proxy statement.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Section&#160;262 requires that stockholders be notified that
    appraisal rights will be available not fewer than 20&#160;days
    before the special meeting to vote on the adoption of the merger
    agreement. A copy of Section&#160;262 must be included with such
    notice. This proxy statement constitutes Blair&#146;s notice to
    its stockholders of the availability of appraisal rights in
    connection with the merger in compliance with the requirements
    of Section&#160;262. If you wish to consider exercising your
    appraisal rights, you should carefully review the text of
    Section&#160;262 contained in Appendix&#160;C since failure to
    timely and properly comply with the requirements of
    Section&#160;262 will result in the loss of your appraisal
    rights under Delaware law.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If you elect to demand appraisal of your shares, you must
    satisfy each of the following conditions:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    you must deliver to Blair a written demand for appraisal of your
    shares before the vote with respect to the merger agreement is
    taken at the special meeting. This written demand for appraisal
    must be in addition to and separate from any proxy or vote
    abstaining from or voting against the adoption of the merger
    agreement. Voting against or failing to vote for the adoption of
    the merger agreement by itself does not constitute a demand for
    appraisal within the meaning of Section&#160;262;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    you must not vote in favor of the adoption of the merger
    agreement. A vote in favor of the adoption of the merger
    agreement, by proxy or in person, will constitute a waiver of
    your appraisal rights in respect of the shares so voted and will
    nullify any previously filed written demands for
    appraisal;&#160;and
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    you must continuously hold your shares through the effective
    time of the merger.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If you fail to comply with any of these conditions and the
    merger is completed, you will be entitled to receive the cash
    payment for your shares of Blair common stock as provided for in
    the merger agreement if you are the holder of record at the
    effective time of the merger, but you will have no appraisal
    rights with respect to your shares of Blair common stock. A
    proxy card which is signed and does not contain voting
    instructions will, unless revoked, be voted &#147;FOR&#148; the
    adoption of the merger agreement and will constitute a waiver of
    your right of appraisal and will nullify any previous written
    demand for appraisal.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    All demands for appraisal should be addressed to the Secretary
    of Blair at 220 Hickory Street, Warren, Pennsylvania 16366, and
    should be executed by, or on behalf of, the record holder of the
    shares in respect of which appraisal is being demanded. The
    demand must reasonably inform Blair of the identity of the
    stockholder and the intention of the stockholder to demand
    appraisal of his, her or its shares.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    To be effective, a demand for appraisal by a holder of Blair
    common stock must be made by, or on behalf of, such record
    stockholder. The demand should set forth, fully and correctly,
    the record stockholder&#146;s name as it appears on his or her
    stock certificate(s). The demand must state that the person
    intends thereby to demand appraisal of the holder&#146;s shares
    in connection with the merger. Beneficial owners who do not also
    hold the shares of record
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    44
</DIV><!-- END LOGICAL PAGE -->
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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    may not directly make appraisal demands to Blair. The beneficial
    holder must, in such cases, have the owner submit the required
    demand in respect of those shares. If shares are owned of record
    in a fiduciary capacity, such as by a trustee, guardian or
    custodian, execution of a demand for appraisal should be made in
    that capacity; and if the shares are owned of record by more
    than one person, as in a joint tenancy or tenancy in common, the
    demand should be executed by or for all joint owners. An
    authorized agent, including an authorized agent for two or more
    joint owners, may execute the demand for appraisal for a
    stockholder of record; however, the agent must identify the
    record owner or owners and expressly disclose the fact that, in
    executing the demand, he or she is acting as agent for the
    record owner. A record owner, such as a broker, who holds shares
    as a nominee for others, may exercise his or her right of
    appraisal with respect to the shares held for one or more
    beneficial owners, while not exercising this right for other
    beneficial owners. In that case, the written demand should state
    the number of shares as to which appraisal is sought. Where no
    number of shares is expressly mentioned, the demand will be
    presumed to cover all shares held in the name of the record
    owner.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If you hold your shares of Blair common stock in a brokerage
    account or in other nominee form and you wish to exercise
    appraisal rights, you should consult with your broker or the
    other nominee to determine the appropriate procedures for the
    making of a demand for appraisal by the nominee.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Within 10&#160;days after the effective time of the merger, the
    surviving corporation must give written notice that the merger
    has become effective to each Blair stockholder who has properly
    filed a written demand for appraisal and who did not vote in
    favor of the merger agreement. At any time within 60&#160;days
    after the effective time, any stockholder who has demanded an
    appraisal has the right to withdraw the demand and to accept the
    cash payment specified by the merger agreement for such
    stockholder&#146;s shares of Blair common stock. Within
    120&#160;days after the effective time, either the surviving
    corporation or any stockholder who has complied with the
    requirements of Section&#160;262 may file a petition in the
    Delaware Court of Chancery, with a copy served on the surviving
    corporation in the case of a petition filed by a stockholder,
    demanding a determination of the fair value of the shares held
    by all stockholders entitled to appraisal. The surviving
    corporation has no obligation and has no present intention to
    file such a petition in the event there are dissenting
    stockholders, and stockholders seeking to exercise appraisal
    rights should not assume that the surviving corporation will
    file such a petition or initiate any negotiations with respect
    to the fair value of such shares. Accordingly, Blair
    stockholders who desire to have their shares appraised should
    initiate all necessary action to perfect their appraisal rights
    in respect of shares of Blair common stock within the time
    prescribed in Section&#160;262. The failure of a stockholder to
    file such a petition within the period specified could nullify
    the stockholder&#146;s previously written demand for appraisal.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If a petition for appraisal is duly filed by a stockholder and a
    copy of the petition is delivered to the surviving corporation,
    the surviving corporation will then be obligated, within
    20&#160;days after receiving service of a copy of the petition,
    to provide the Register in Chancery with a duly verified list
    containing the names and addresses of all stockholders who have
    demanded an appraisal of their shares and with whom agreements
    as to the value of their shares have not been reached. Within
    120&#160;days after the effective time of the merger, any
    stockholder who has theretofore complied with the applicable
    provisions of Section&#160;262 will be entitled, upon written
    request, to receive from the surviving corporation a statement
    setting forth the aggregate number of shares of common stock not
    voting in favor of the merger and with respect to which demands
    for appraisal were received by Blair and the number of holders
    of such shares. Such statement must be mailed within
    10&#160;days after the written request therefor has been
    received by the surviving corporation.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    After notice to dissenting stockholders, the Chancery Court will
    conduct a hearing upon the petition, and determine those
    stockholders who have complied with Section&#160;262 and who
    have become entitled to the appraisal rights provided thereby.
    The Chancery Court may require the stockholders who have
    demanded payment for their shares to submit their stock
    certificates to the Register in Chancery for notation thereon of
    the pendency of the appraisal proceedings; and if any
    stockholder fails to comply with that direction, the Chancery
    Court may dismiss the proceedings as to that stockholder.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    After determination of the stockholders entitled to appraisal of
    their shares of Blair common stock, the Chancery Court will
    appraise the shares, determining their fair value exclusive of
    any element of value arising from the accomplishment or
    expectation of the merger, together with a fair rate of
    interest, if any, to be paid upon the amount determined to be
    the fair value. When the value is determined, the Chancery Court
    will direct the payment
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    45
</DIV><!-- END LOGICAL PAGE -->
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    of such value, with interest thereon, if the Chancery Court so
    determines, to the stockholders entitled to receive the same,
    upon surrender by such holders of the certificates representing
    those shares.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In determining fair value and, if applicable, a fair rate of
    interest, the Chancery Court is required to take into account
    all relevant factors. In <I>Weinberger&#160;v. UOP, Inc.</I>,
    the Supreme Court of Delaware discussed the factors that could
    be considered in determining fair value in an appraisal
    proceeding, stating that &#147;proof of value by any techniques
    or methods that are generally considered acceptable in the
    financial community and otherwise admissible in court&#148;
    should be considered, and that &#147;fair price obviously
    requires consideration of all relevant factors involving the
    value of a company.&#148; The Delaware Supreme Court stated
    that, in making this determination of fair value, the court must
    consider market value, asset value, dividends, earnings
    prospects, the nature of the enterprise and any other facts that
    could be ascertained as of the date of the merger that throw any
    light on future prospects of the merged corporation.
    Section&#160;262 provides that fair value is to be
    &#147;exclusive of any element of value arising from the
    accomplishment or expectation of the merger.&#148; In
    <I>Cede&#160;&#38; Co.&#160;v. Technicolor, Inc.</I>, the
    Delaware Supreme Court stated that such exclusion is a
    &#147;narrow exclusion [that] does not encompass known elements
    of value,&#148; but which rather applies only to the speculative
    elements of value arising from such accomplishment or
    expectation. In <I>Weinberger</I>, the Supreme Court of Delaware
    also stated that &#147;elements of future value, including the
    nature of the enterprise, which are known or susceptible of
    proof as of the date of the merger and not the product of
    speculation, may be considered.&#148; In determining fair value
    for appraisal purposes under Section&#160;262 of Delaware
    General Corporations Law, the Chancery Court might, or might
    not, employ some or all of the valuation analyses utilized by
    Blair&#146;s financial advisors as described in summary fashion
    under &#147;&#151;&#160;Opinion of Our Financial Advisor.&#148;
    Although Blair believes that the merger consideration is fair,
    no representation is made as to the outcome of the appraisal of
    fair value as determined by the Chancery Court, and you should
    be aware that the fair value of your shares as determined under
    Section&#160;262 could be more, the same, or less than the value
    that you are entitled to receive under the terms of the merger
    agreement. Moreover, the surviving corporation does not
    anticipate offering more than the value that you are entitled to
    receive under the terms of the merger agreement to any
    stockholder exercising appraisal rights and reserves the right
    to assert, in any appraisal proceeding, that, for purposes of
    Section&#160;262, the &#147;fair value&#148; of a share of Blair
    common stock is less than the merger consideration.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Costs of the appraisal proceeding may be imposed upon the
    surviving corporation and the stockholders participating in the
    appraisal proceeding by the Chancery Court as the Chancery Court
    deems equitable in the circumstances. Upon the application of a
    stockholder, the Chancery Court may order all or a portion of
    the expenses incurred by any stockholder in connection with the
    appraisal proceeding, including, without limitation, reasonable
    attorneys&#146; fees and the fees and expenses of experts, to be
    charged pro rata against the value of all shares entitled to
    appraisal. Any stockholder who had demanded appraisal rights
    will not, after the effective time, be entitled to vote shares
    subject to that demand for any purpose or to receive payments of
    dividends or any other distribution with respect to those
    shares, other than with respect to payment as of a record date
    prior to the effective time; however, if no petition for
    appraisal is filed within 120&#160;days after the effective time
    of the merger, or if the stockholder delivers a written
    withdrawal of such stockholder&#146;s demand for appraisal and
    an acceptance of the terms of the merger within 60&#160;days
    after the effective time of the merger or thereafter with the
    written approval of the surviving corporation, then the right of
    that stockholder to appraisal will cease and that stockholder
    will be entitled to receive the cash payment for shares of his,
    her or its Blair common stock pursuant to the merger agreement.
    Any withdrawal of a demand for appraisal made more than
    60&#160;days after the effective time of the merger may only be
    made with the written approval of the surviving corporation.
    Once a petition for appraisal has been filed, the appraisal
    proceeding may not be dismissed as to any stockholder without
    the approval of the Chancery Court and such approval may be
    conditioned upon such terms as the Chancery Court deems just.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Failure to comply with all of the procedures set forth in
    Section&#160;262 will result in the loss of a stockholder&#146;s
    statutory appraisal rights. In view of the complexity of
    Section&#160;262, Blair&#146;s stockholders who may wish to
    dissent from the merger and pursue appraisal rights should
    consider consulting their legal advisors.
</DIV>
<A name='145'>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Delisting
    and Deregistration of Our Common Stock</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If the merger is completed, our common stock will cease trading
    on the American Stock Exchange and will be deregistered under
    the Exchange Act.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    46
</DIV><!-- END LOGICAL PAGE -->
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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->
<A name='146'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">SHAREHOLDER
    AGREEMENTS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    On May&#160;25, 2005 we entered into standstill agreements with
    two separate groups of stockholders, Loeb Partners Corporation
    and each of its affiliates, or Loeb, and Santa Monica
    Opportunity Fund, L.P. and each of its affiliates and
    principals, or Santa Monica. Each of the standstill agreements
    have a five year term.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Pursuant to these standstill agreements, each of Loeb and Santa
    Monica agreed that, while the standstill agreements are in
    effect, it will vote any and all shares of its common stock in
    favor of the position advocated by a majority of our board of
    directors at any meeting of stockholders. This requires each of
    Loeb and Santa Monica to vote all of its shares FOR the proposal
    to adopt the merger agreement.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Additionally, each of Loeb and Santa Monica has agreed that,
    while its standstill agreement is in effect, neither it nor any
    of its affiliates or associates will:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    attempt to exercise control over management of our company;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    acquire any additional shares of our company, directly or
    indirectly, for a period of five years;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    make any statement, proposal or offer, whether written or oral,
    to our board of directors or to any director, officer or agent
    of our company, or make any public announcement, proposal or
    offer with respect to an acquisition, merger (or other business
    combination), sale, transfer of assets, recapitalization,
    dividend, share repurchase, liquidation or other extraordinary
    corporate transaction with our company or any other transaction
    that could result in a change of control of our company;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    initiate, encourage, participate in or engage in any proxy
    solicitation or contest or otherwise publicly oppose our board
    of directors;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    initiate, encourage or propose any stockholder proposal
    regarding our company;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    seek to control the management, policies, affairs, actions, or
    business of our company, including, without limitation, by
    taking any action to seek to obtain representation on our
    company&#146;s board of directors;&#160;and
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    have any communications with any of our company&#146;s other
    stockholders, directors, officers, associates, employees,
    customers or suppliers regarding matters relating to our company
    that could reasonably be expected to, or with an intention to,
    interfere with or otherwise adversely affect the operation of
    our company
    <FONT style="white-space: nowrap">and/or</FONT> our
    company&#146;s relationship with any of the aforementioned
    constituents of our company.
</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    47
</DIV><!-- END LOGICAL PAGE -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->
<A name='147'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">MARKET
    PRICE AND DIVIDEND DATA</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our common stock is currently reported on the American Stock
    Exchange composite tape under the symbol &#147;BL.&#148; As of
    March&#160;16, 2007, there were 3,854,287&#160;shares of our
    common stock outstanding, which were held by approximately
    1,778&#160;holders of record. The number of holders of record do
    not reflect the number of individuals or institutional investors
    holding stock in nominee name through brokerage firms and others.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following table shows, for the periods indicated, the range
    of high and low sale prices for our common stock as quoted on
    the American Stock Exchange composite tape. The following table
    also sets forth the dividends declared per share of our common
    stock for the periods indicated.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>
<DIV style="margin-left: 10%; margin-right: 10%">
<TABLE border="0" width="80%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="72%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="4%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="4%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="6%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Dividends<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="6" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Market Price</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Declared<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Calendar Period</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>High</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Low</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Per Share</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B><FONT style="font-size: 10pt">2007</FONT></B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Quarter ended March&#160;31, 2007
    (through March&#160;19, 2007)
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    42.26
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    33.80
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
    (1)
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B><FONT style="font-size: 10pt">2006</FONT></B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Quarter ended December&#160;31
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    32.78
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    25.80
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    0.30
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Quarter ended September&#160;30
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    29.62
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    23.75
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    0.30
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Quarter ended June&#160;30
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    45.84
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    29.75
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    0.30
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Quarter ended March&#160;31
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    42.00
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    38.26
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    0.30
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B><FONT style="font-size: 10pt">2005</FONT></B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Quarter ended December&#160;31
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    41.58
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    35.29
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    0.30
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Quarter ended September&#160;30
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    45.16
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    36.89
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    0.15
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Quarter ended June&#160;30
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    39.80
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    29.86
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    0.15
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Quarter ended March&#160;31
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    38.89
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    32.80
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    0.15
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>
</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="font-size: 1pt; margin-left: 0%; width: 13%; align: left; border-bottom: 1pt solid #000000"></DIV><!-- callerid=999 iwidth=455 length=60 -->

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="4%"></TD>
    <TD width="1%"></TD>
    <TD width="95%"></TD>
</TR>

<TR>
    <TD align="right" valign="top">
    (1) </TD>
    <TD></TD>
    <TD valign="bottom">
    Regular quarterly dividends have been suspended pursuant to the
    terms of the merger agreement.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    On January&#160;22, 2007, the last full trading day prior to the
    public announcement of the merger, the closing price per share
    of our common stock was $36.95. On March&#160;19, 2007, the last
    practicable trading day prior to the date of this proxy
    statement, the closing price per share of our common stock was
    $41.45.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    48
</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->
<A name='148'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">SECURITY
    OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following table sets forth certain information, as of
    March&#160;16, 2007, with respect to the beneficial ownership of
    common stock owned by (i)&#160;each person or entity, including
    any &#147;group&#148; as that term is used in
    Section&#160;13(d)(3) of the Exchange Act, who or which was
    known to us to be the beneficial owner of more than 5% of the
    issued and outstanding common stock, (ii)&#160;our directors,
    (iii)&#160;each of our executive officers, and (iv)&#160;all
    directors and executive officers of our company as a group.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>
<DIV style="margin-left: 10%; margin-right: 0%">
<TABLE border="0" width="90%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="70%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="12%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="9%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Amount of shares<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>beneficially<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Percentage of<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Name of beneficial owner</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>owned(1)</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Class(2)</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B><I><FONT style="font-size: 10pt">Security Ownership of More
    than 5% Stockholders:</FONT></I></B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Jewelcor Companies(3)
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    196,800
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5.11
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Golden Gate Capital
    Management&#160;II, L.L.C.(4)
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    312,521
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    8.11
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Dimensional Fund Advisors LP(5)
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    254,416
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    6.60
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">PNC Financial Services Group,
    Inc.(6)
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    269,755
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    7.00
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B><I><FONT style="font-size: 10pt">Directors</FONT></I></B><FONT style="font-size: 10pt">:
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Harriet Edelman
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    4,425
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    *
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Cynthia A. Fields
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,925
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    *
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">John O. Hanna
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    22,600
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    *
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Jerel G. Hollens
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    975
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    *
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Craig N. Johnson
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    7,750
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    *
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Murray K. McComas
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    45,675
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1.19
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Ronald L. Ramseyer
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    4,175
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    *
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Michael A. Schuler
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,100
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    *
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Shelly J. Seifert
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    850
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">John E. Zawacki(7)
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    120,875
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3.14
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B><I><FONT style="font-size: 10pt">Executive Officers Who are
    Not Directors:</FONT></I></B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Adelmo S. Lopez
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    -0-
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    *
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Lawrence J. Pitorak
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    -0-
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    *
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">David Elliott
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    9,120
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    *
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Randall A. Scalise
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    16,601
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    *
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-size: 10pt">Lawrence R. Vicini
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    9,868
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    *
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B><FONT style="font-size: 10pt">All directors and executive
    officers as a group (22 persons)</FONT></B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    292,419
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    7.59
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
</TR>
</TABLE>
</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="font-size: 1pt; margin-left: 0%; width: 13%; align: left; border-bottom: 1pt solid #000000"></DIV><!-- callerid=999 iwidth=455 length=60 -->

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="4%"></TD>
    <TD width="1%"></TD>
    <TD width="95%"></TD>
</TR>

<TR>
    <TD align="right" valign="top">
    *&#160;</TD>
    <TD></TD>
    <TD valign="bottom">
    Less than 1.0%</TD>
</TR>

<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (1) </TD>
    <TD></TD>
    <TD valign="bottom">
    In accordance with
    <FONT style="white-space: nowrap">Rule&#160;13d-3</FONT>
    promulgated under the Exchange Act, a person is deemed to be the
    beneficial owner, for purposes of this table, of any shares of
    common stock if such person has sole or shared voting or
    dispositive power with respect to such shares, or has a right to
    acquire beneficial ownership at any time within sixty days of
    the date of determination of beneficial ownership. As used
    herein, &#147;voting power&#148; is the power to vote or direct
    the voting of shares and &#147;dispositive power&#148; is the
    power to dispose or direct the disposition of shares.</TD>
</TR>

<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (2) </TD>
    <TD></TD>
    <TD valign="bottom">
    Percentages based upon 3,854,287&#160;shares of common stock
    issued and outstanding as of March&#160;16, 2007.</TD>
</TR>

<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (3) </TD>
    <TD></TD>
    <TD valign="bottom">
    The address for Jewelcor Companies is 100&#160;N.&#160;Wilkes
    Barre Blvd., Wilkes Barre, Pennsylvania 18702. Based solely on
    Schedule&#160;13D, filed January&#160;25, 2007 by Seymour
    Holtzman c/o&#160;Jewelco Companies and Evelyn Holtzman,
    Jewelcor Management Inc., S. H. Holdings, Inc., Jewelcor
    Incorporated, Holtzman Opportunity Fund, L.P., SH Independence,
    Holtzman Financial Advisors, which states that the reporting
    persons owned an aggregate of 196,800&#160;shares of common
    stock.</TD>
</TR>

<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (4) </TD>
    <TD></TD>
    <TD valign="bottom">
    The address for Golden Gate Capital Management&#160;II, L.L.C.
    is One Embercadero Center, 33rd&#160;Floor, San&#160;Francisco,
    California 94111. Based solely on Schedule&#160;13D, filed
    January&#160;18, 2007 as amended by Schedule 13D/A filed
    January&#160;24, 2007, by Golden Gate Capital
    Management&#160;II, L.L.C., Golden Gate Capital </TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    49
</DIV><!-- END LOGICAL PAGE -->
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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="4%"></TD>
    <TD width="1%"></TD>
    <TD width="95%"></TD>
</TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="bottom">
    Investment Fund&#160;II, L.P., ZZZ Holdings LLC, Catalog
    Holdings LLC, which states that the foregoing entities have sole
    voting power over 312,521&#160;shares of common stock and sole
    dispositive power over 312,521&#160;shares of common stock, and
    by David C. Dominik and Jesse T. Rogers, stating that
    Messrs.&#160;Dominik and Rogers have shared voting power over
    312,521&#160;shares of common stock and shared dispositive power
    over 312,521&#160;shares of common stock, and by
    Appleseed&#146;s Topco, Inc. and BLR Acquisition Corp., which
    states that the foregoing entities have no voting or dispositive
    power over 312,521&#160;shares of common stock. </TD>
</TR>

<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (5) </TD>
    <TD></TD>
    <TD valign="bottom">
    The address for Dimensional Fund Advisors&#160;LP is
    1299&#160;Ocean Avenue Santa Monica, CA 90401. Based solely on a
    Schedule&#160;13G filed February&#160;1, 2006 which states the
    reporting person beneficially owned 254, 416 shares of our
    common stock as of such date.</TD>
</TR>

<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (6) </TD>
    <TD></TD>
    <TD valign="bottom">
    The address for PNC&#160;Financial Services Group, Inc. is
    One&#160;PNC&#160;Plaza 249&#160;Fifth Avenue Pittsburgh,
    PA&#160;15222-2707. Based solely on a Schedule&#160;13G filed
    February&#160;12, 2007 by PNC&#160;Financial Services
    Group,&#160;Inc., PNC&#160;Bancorp,&#160;Inc. and PNC&#160;Bank,
    National Association which states the reporting persons owned
    269,755 shares of our common stock as of such date.</TD>
</TR>

<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (7) </TD>
    <TD></TD>
    <TD valign="bottom">
    Mr.&#160;Zawacki is currently the Vice-Chairman of the board and
    resigned as our President and Chief Executive Officer on
    January&#160;21, 2007.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    50
</DIV><!-- END LOGICAL PAGE -->
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->
<A name='149'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">ADJOURNMENT
    OF THE SPECIAL MEETING</FONT></B>
</DIV>
</A>
<A name='153'>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Granting
    of Discretionary Authority to Adjourn Our Special
    Meeting</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>General.</I>&#160;&#160;If, at our special meeting on
    April&#160;24, 2007, the number of shares of our common stock,
    present in person or by proxy, is insufficient to constitute a
    quorum or the number of shares of our common stock voting in
    favor of approval of the merger is insufficient to adopt the
    merger agreement under Delaware law, our management intends to
    move to adjourn the special meeting in order to enable our board
    of directors to solicit additional proxies. In that event, we
    will ask our stockholders to vote only upon the adjournment
    proposal and not on the proposal relating to the adoption of the
    merger.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In this adjournment proposal, we are asking stockholders to
    grant discretionary authority to the holder of any proxy
    solicited by our board of directors so that the holder can vote
    in favor of the proposal to adjourn the special meeting to
    solicit additional proxies. If our stockholders approve the
    adjournment proposal, we could adjourn the special meeting, and
    any adjourned session of the special meeting, and use the
    additional time to solicit additional proxies, including the
    solicitation of proxies from stockholders that have previously
    voted. Among other things, approval of the adjournment proposal
    could mean that, even if we had received proxies representing a
    sufficient number of votes against adoption of the merger to
    defeat the merger proposal, we could adjourn the special meeting
    without a vote on the merger proposal and seek to convince the
    holders of those shares to change their votes to votes in favor
    of the approval of the merger.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    At any such adjourned meeting at which the requisite amount of
    voting stock shall be represented, any business may be
    transacted that might have been transacted at the meeting as
    originally noticed. No notice of the adjourned meeting is
    required to be given to stockholders, other than an announcement
    at the special meeting of the place, date and time to which the
    meeting is adjourned.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Vote Required.</I>&#160;&#160;Pursuant to our bylaws, the
    adjournment proposal requires the affirmative vote of the
    holders of a majority of the shares of our common stock present
    in person or by proxy at the special meeting. Those stockholders
    entitled to vote, present in person or by proxy, shall have
    power to adjourn the meeting from time to time, without notice
    other than announcement at the meeting, until the required
    majority in number of the aggregate number of voting stock shall
    be represented. Abstentions will have the same effect as a vote
    against the adjournment proposal. Under rules of the American
    Stock Exchange, the proposal to adjourn the special meeting is
    considered an &#147;non discretionary&#148; item upon which
    brokerage firms may not vote in their discretion on behalf of
    their clients if such clients have not furnished voting
    instructions. Broker &#147;non-votes&#148; will have the same
    affect as a vote against the adjournment proposal.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    No proxy that is specifically marked &#147;AGAINST&#148;
    approval of the merger agreement will be voted in favor of the
    adjournment proposal, unless it is specifically marked
    &#147;FOR&#148; granting the discretionary authority to adjourn
    the special meeting.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Recommendation of our Board of Directors.</I>&#160;&#160;The
    board of directors believes that if the number of shares of our
    common stock present in person or by proxy at the special
    meeting and voting in favor of approval of the merger is
    insufficient to adopt the merger agreement, it is in the best
    interests of our stockholders to enable the board to continue to
    seek to obtain a sufficient number of additional votes in favor
    of approval of the merger. <B>Therefore, our board of directors
    unanimously recommends that you vote &#147;FOR&#148; the
    proposal to grant discretionary authority to adjourn the special
    meeting for the purpose of soliciting additional proxies.</B>
</DIV>
<A name='150'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">STOCKHOLDER
    PROPOSALS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We will not hold an annual meeting of stockholders in 2007 if
    the merger is completed because we will no longer be a publicly
    held company. However, if the merger agreement is terminated for
    any reason, we expect to hold our regularly scheduled annual
    meeting of stockholders in May of 2007. If we hold such annual
    meeting, any proposal a stockholder would have wanted included
    in our proxy materials relating to the next annual meeting of
    stockholders of our company should have been received by the
    Corporate Secretary of Blair Corporation, 220&#160;Hickory
    Street, Warren, Pennsylvania 16366, no later than
    November&#160;20, 2006. No such proposals were received.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If we hold our 2007 annual meeting, stockholder proposals which
    are not submitted for inclusion in our proxy materials pursuant
    to
    <FONT style="white-space: nowrap">Rule&#160;14a-8</FONT>
    under the Exchange Act must be received by the Corporate
    Secretary of Blair
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    51
</DIV><!-- END LOGICAL PAGE -->
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Corporation, 220 Hickory Street, Warren, Pennsylvania, 16366, no
    later than 10&#160;days after we publicly announce the date of
    an annual meeting, if held. The proxy to be solicited on behalf
    of Blair for the 2007 Annual Meeting of Stockholders may confer
    discretionary authority to vote on any such proposal not
    considered to have been timely received that nonetheless
    properly comes before the 2007 Annual Meeting of Stockholders.
</DIV>
<A name='151'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">OTHER
    MATTERS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As of the date of this proxy statement, our board of directors
    knows of no matters that will be presented for consideration at
    the special meeting other than as described in this proxy
    statement. However, if any other matter is properly presented at
    the special meeting, the shares represented by proxies in the
    form of the enclosed proxy card will be voted in the discretion
    of the named proxy holders.
</DIV>
<A name='152'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">WHERE YOU
    CAN FIND MORE INFORMATION</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We file annual, quarterly and current reports, proxy statements
    and other information with the SEC under the Exchange Act. You
    may read and copy any reports, proxy statements or other
    information filed by us at the SEC&#146;s public reference room
    in Washington,&#160;D.C., which is located at the following
    address: Public Reference Room, 100&#160;F&#160;Street, N.E.,
    Washington,&#160;D.C. 20549.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    You can request copies of these documents, upon payment of a
    duplicating fee, by writing to the SEC at the address above, or
    make your request via email to <U>publicinfo@sec.gov</U> or fax
    at
    <FONT style="white-space: nowrap">202-777-1027.</FONT>
    Please call the SEC at 1-202-551-8090 for further information on
    the operation of the SEC&#146;s public reference room. Our SEC
    filings are also available to the public from document retrieval
    services and at the SEC&#146;s Internet website
    (<I><U>http://www.sec.gov</U></I>).
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    You should also be able to inspect reports, proxy statements and
    other information about us at the offices of the American Stock
    Exchange, 86 Trinity Place, New York, New York 10006.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our stockholders should not send in their certificates for our
    common stock until they receive the transmittal materials from
    the exchange agent after completion of the merger. Our
    stockholders of record who have further questions about their
    share certificates or the exchange of our common stock for cash
    following the completion of the merger should call our proxy
    solicitation firm, Georgeson Shareholder Communications, Inc.,
    at
    <FONT style="white-space: nowrap">(866)&#160;229-8451.</FONT>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    You should rely only on the information contained in this proxy
    statement. We have not authorized anyone to provide you with
    information that is different from what is contained in this
    proxy statement. This proxy statement is dated March&#160;19,
    2007. You should not assume that the information contained in
    this proxy statement is accurate as of any date other than that
    date. Neither the mailing of this proxy statement to
    stockholders nor the issuance of cash in the merger creates any
    implication to the contrary.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    52
</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="right" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">APPENDIX&#160;A</FONT></B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>AGREEMENT AND PLAN OF MERGER</B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>dated as of January&#160;23, 2007</B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>by and among</B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>BLAIR CORPORATION,</B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>BLR ACQUISITION CORP.</B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>and</B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>APPLESEED&#146;S TOPCO, INC.</B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<P align="left" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->
<DIV align="left">
<!-- TOC -->
</DIV>

<DIV align="left">
<A name="tocpage"></A>
</DIV>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><U><FONT style="font-family: 'Times New Roman', Times">TABLE
    OF CONTENTS</FONT></U></B>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="6%">&nbsp;</TD>	<!-- colindex=01 type=quadleft -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="6%">&nbsp;</TD>	<!-- colindex=01 type=quadright -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="78%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=03 type=quadleft -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=03 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=03 type=quadright -->
</TR>
<TR valign="bottom">
<TD colspan="5" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#501'><B><FONT style="font-size: 10pt">ARTICLE 1 THE
    MERGER</FONT></B></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <B><FONT style="font-size: 10pt">A-1</FONT></B>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD>
</TD>
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -15pt; margin-left: 25pt">
    <A HREF='#502'><FONT style="font-size: 10pt">1.01</FONT></A>
</DIV>
</TD>
<TD>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <A HREF='#502'><FONT style="font-size: 10pt">The
    Merger</FONT></A>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">A-1
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD>
</TD>
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -15pt; margin-left: 25pt">
    <A HREF='#503'><FONT style="font-size: 10pt">1.02</FONT></A>
</DIV>
</TD>
<TD>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <A HREF='#503'><FONT style="font-size: 10pt">Effective
    Time</FONT></A>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">A-1
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD>
</TD>
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -15pt; margin-left: 25pt">
    <A HREF='#504'><FONT style="font-size: 10pt">1.03</FONT></A>
</DIV>
</TD>
<TD>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <A HREF='#504'><FONT style="font-size: 10pt">Effects of the
    Merger</FONT></A>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">A-1
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD>
</TD>
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -15pt; margin-left: 25pt">
    <A HREF='#505'><FONT style="font-size: 10pt">1.04</FONT></A>
</DIV>
</TD>
<TD>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <A HREF='#505'><FONT style="font-size: 10pt">Certificate of
    Incorporation and Bylaws of the Surviving Corporation</FONT></A>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">A-2
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD>
</TD>
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -15pt; margin-left: 25pt">
    <A HREF='#506'><FONT style="font-size: 10pt">1.05</FONT></A>
</DIV>
</TD>
<TD>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <A HREF='#506'><FONT style="font-size: 10pt">Directors</FONT></A>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">A-2
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD>
</TD>
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -15pt; margin-left: 25pt">
    <A HREF='#507'><FONT style="font-size: 10pt">1.06</FONT></A>
</DIV>
</TD>
<TD>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <A HREF='#507'><FONT style="font-size: 10pt">Officers</FONT></A>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">A-2
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD>
</TD>
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -15pt; margin-left: 25pt">
    <A HREF='#508'><FONT style="font-size: 10pt">1.07</FONT></A>
</DIV>
</TD>
<TD>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <A HREF='#508'><FONT style="font-size: 10pt">Name</FONT></A>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">A-2
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD>
</TD>
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -15pt; margin-left: 25pt">
    <A HREF='#509'><FONT style="font-size: 10pt">1.08</FONT></A>
</DIV>
</TD>
<TD>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <A HREF='#509'><FONT style="font-size: 10pt">Closing</FONT></A>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">A-2
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD>
</TD>
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -15pt; margin-left: 25pt">
    <A HREF='#510'><FONT style="font-size: 10pt">1.09</FONT></A>
</DIV>
</TD>
<TD>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <A HREF='#510'><FONT style="font-size: 10pt">Additional
    Actions</FONT></A>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">A-2
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom" style="line-height: 6pt">
<TD colspan="5">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD colspan="5" valign="bottom">
<DIV style="text-indent: -25pt; margin-left: 25pt">
    <A HREF='#511'><B><FONT style="font-size: 10pt">ARTICLE 2 EFFECT
    OF THE MERGER ON THE CAPITAL STOCK OF THE COMPANY AND MERGER
    SUB</FONT></B></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <B><FONT style="font-size: 10pt">A-2</FONT></B>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD>
</TD>
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -15pt; margin-left: 25pt">
    <A HREF='#512'><FONT style="font-size: 10pt">2.01</FONT></A>
</DIV>
</TD>
<TD>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <A HREF='#512'><FONT style="font-size: 10pt">Effect on Shares of
    Capital Stock</FONT></A>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">A-2
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD>
</TD>
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -15pt; margin-left: 25pt">
    <A HREF='#513'><FONT style="font-size: 10pt">2.02</FONT></A>
</DIV>
</TD>
<TD>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <A HREF='#513'><FONT style="font-size: 10pt">Options; Restricted
    Stock; Stock Plans</FONT></A>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">A-3
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD>
</TD>
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -15pt; margin-left: 25pt">
    <A HREF='#514'><FONT style="font-size: 10pt">2.03</FONT></A>
</DIV>
</TD>
<TD>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <A HREF='#514'><FONT style="font-size: 10pt">Payment for Common
    Shares in the Merger</FONT></A>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">A-4
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom" style="line-height: 6pt">
<TD colspan="5">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD colspan="5" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#515'><B><FONT style="font-size: 10pt">ARTICLE 3
    REPRESENTATIONS AND WARRANTIES OF THE COMPANY</FONT></B></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <B><FONT style="font-size: 10pt">A-6</FONT></B>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD>
</TD>
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -15pt; margin-left: 25pt">
    <A HREF='#516'><FONT style="font-size: 10pt">3.01</FONT></A>
</DIV>
</TD>
<TD>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <A HREF='#516'><FONT style="font-size: 10pt">Organization and
    Qualification</FONT></A>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">A-6
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD>
</TD>
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -15pt; margin-left: 25pt">
    <A HREF='#517'><FONT style="font-size: 10pt">3.02</FONT></A>
</DIV>
</TD>
<TD>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <A HREF='#517'><FONT style="font-size: 10pt">Charter Documents
    and Bylaws</FONT></A>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">A-7
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD>
</TD>
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -15pt; margin-left: 25pt">
    <A HREF='#518'><FONT style="font-size: 10pt">3.03</FONT></A>
</DIV>
</TD>
<TD>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <A HREF='#518'><FONT style="font-size: 10pt">Capitalization</FONT></A>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">A-7
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD>
</TD>
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -15pt; margin-left: 25pt">
    <A HREF='#519'><FONT style="font-size: 10pt">3.04</FONT></A>
</DIV>
</TD>
<TD>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <A HREF='#519'><FONT style="font-size: 10pt">Authority Relative
    to this Agreement</FONT></A>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">A-7
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD>
</TD>
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -15pt; margin-left: 25pt">
    <A HREF='#520'><FONT style="font-size: 10pt">3.05</FONT></A>
</DIV>
</TD>
<TD>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <A HREF='#520'><FONT style="font-size: 10pt">Company
    Subsidiaries</FONT></A>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">A-8
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD>
</TD>
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -15pt; margin-left: 25pt">
    <A HREF='#521'><FONT style="font-size: 10pt">3.06</FONT></A>
</DIV>
</TD>
<TD>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <A HREF='#521'><FONT style="font-size: 10pt">No Violation;
    Required Filings and Consents</FONT></A>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">A-8
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD>
</TD>
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -15pt; margin-left: 25pt">
    <A HREF='#522'><FONT style="font-size: 10pt">3.07</FONT></A>
</DIV>
</TD>
<TD>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <A HREF='#522'><FONT style="font-size: 10pt">SEC Reports and
    Financial Statements</FONT></A>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">A-9
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD>
</TD>
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -15pt; margin-left: 25pt">
    <A HREF='#523'><FONT style="font-size: 10pt">3.08</FONT></A>
</DIV>
</TD>
<TD>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <A HREF='#523'><FONT style="font-size: 10pt">Compliance with
    Applicable Laws</FONT></A>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">A-10
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD>
</TD>
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -15pt; margin-left: 25pt">
    <A HREF='#524'><FONT style="font-size: 10pt">3.09</FONT></A>
</DIV>
</TD>
<TD>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <A HREF='#524'><FONT style="font-size: 10pt">Absence of Certain
    Changes or Events</FONT></A>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">A-10
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD>
</TD>
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -15pt; margin-left: 25pt">
    <A HREF='#525'><FONT style="font-size: 10pt">3.10</FONT></A>
</DIV>
</TD>
<TD>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <A HREF='#525'><FONT style="font-size: 10pt">Change of
    Control</FONT></A>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">A-11
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD>
</TD>
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -15pt; margin-left: 25pt">
    <A HREF='#526'><FONT style="font-size: 10pt">3.11</FONT></A>
</DIV>
</TD>
<TD>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <A HREF='#526'><FONT style="font-size: 10pt">Litigation</FONT></A>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">A-11
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD>
</TD>
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -15pt; margin-left: 25pt">
    <A HREF='#527'><FONT style="font-size: 10pt">3.12</FONT></A>
</DIV>
</TD>
<TD>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <A HREF='#527'><FONT style="font-size: 10pt">Information in
    Proxy Statement</FONT></A>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">A-11
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD>
</TD>
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -15pt; margin-left: 25pt">
    <A HREF='#528'><FONT style="font-size: 10pt">3.13</FONT></A>
</DIV>
</TD>
<TD>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <A HREF='#528'><FONT style="font-size: 10pt">Benefit
    Plans</FONT></A>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">A-12
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD>
</TD>
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -15pt; margin-left: 25pt">
    <A HREF='#529'><FONT style="font-size: 10pt">3.14</FONT></A>
</DIV>
</TD>
<TD>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <A HREF='#529'><FONT style="font-size: 10pt">Taxes</FONT></A>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">A-13
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD>
</TD>
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -15pt; margin-left: 25pt">
    <A HREF='#530'><FONT style="font-size: 10pt">3.15</FONT></A>
</DIV>
</TD>
<TD>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <A HREF='#530'><FONT style="font-size: 10pt">Intellectual
    Property</FONT></A>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">A-14
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD>
</TD>
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -15pt; margin-left: 25pt">
    <A HREF='#531'><FONT style="font-size: 10pt">3.16</FONT></A>
</DIV>
</TD>
<TD>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <A HREF='#531'><FONT style="font-size: 10pt">Licenses and
    Permits</FONT></A>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">A-15
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD>
</TD>
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -15pt; margin-left: 25pt">
    <A HREF='#532'><FONT style="font-size: 10pt">3.17</FONT></A>
</DIV>
</TD>
<TD>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <A HREF='#532'><FONT style="font-size: 10pt">Material
    Contracts</FONT></A>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">A-15
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD>
</TD>
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -15pt; margin-left: 25pt">
    <A HREF='#533'><FONT style="font-size: 10pt">3.18</FONT></A>
</DIV>
</TD>
<TD>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <A HREF='#533'><FONT style="font-size: 10pt">Environmental
    Laws</FONT></A>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">A-16
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD>
</TD>
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -15pt; margin-left: 25pt">
    <A HREF='#534'><FONT style="font-size: 10pt">3.19</FONT></A>
</DIV>
</TD>
<TD>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <A HREF='#534'><FONT style="font-size: 10pt">Opinion of
    Financial Advisor</FONT></A>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">A-17
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD>
</TD>
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -15pt; margin-left: 25pt">
    <A HREF='#535'><FONT style="font-size: 10pt">3.20</FONT></A>
</DIV>
</TD>
<TD>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <A HREF='#535'><FONT style="font-size: 10pt">Brokers</FONT></A>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">A-17
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD>
</TD>
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -15pt; margin-left: 25pt">
    <A HREF='#536'><FONT style="font-size: 10pt">3.21</FONT></A>
</DIV>
</TD>
<TD>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <A HREF='#536'><FONT style="font-size: 10pt">Required
    Shareholder Vote</FONT></A>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">A-17
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD>
</TD>
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -15pt; margin-left: 25pt">
    <A HREF='#537'><FONT style="font-size: 10pt">3.22</FONT></A>
</DIV>
</TD>
<TD>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <A HREF='#537'><FONT style="font-size: 10pt">Related Party
    Transactions</FONT></A>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">A-17
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD>
</TD>
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -15pt; margin-left: 25pt">
    <A HREF='#538'><FONT style="font-size: 10pt">3.23</FONT></A>
</DIV>
</TD>
<TD>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <A HREF='#538'><FONT style="font-size: 10pt">Properties and
    Assets</FONT></A>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">A-17
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD>
</TD>
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -15pt; margin-left: 25pt">
    <A HREF='#539'><FONT style="font-size: 10pt">3.24</FONT></A>
</DIV>
</TD>
<TD>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <A HREF='#539'><FONT style="font-size: 10pt">Labor
    Matters</FONT></A>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">A-18
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD>
</TD>
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -15pt; margin-left: 25pt">
    <A HREF='#540'><FONT style="font-size: 10pt">3.25</FONT></A>
</DIV>
</TD>
<TD>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <A HREF='#540'><FONT style="font-size: 10pt">Insurance</FONT></A>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">A-18
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD>
</TD>
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -15pt; margin-left: 25pt">
    <A HREF='#541'><FONT style="font-size: 10pt">3.26</FONT></A>
</DIV>
</TD>
<TD>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <A HREF='#541'><FONT style="font-size: 10pt">[Intentionally
    omitted]</FONT></A>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">A-18
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD>
</TD>
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -15pt; margin-left: 25pt">
    <A HREF='#542'><FONT style="font-size: 10pt">3.27</FONT></A>
</DIV>
</TD>
<TD>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <A HREF='#542'><FONT style="font-size: 10pt">State Takeover
    Statutes</FONT></A>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">A-18
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD>
</TD>
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -15pt; margin-left: 25pt">
    <A HREF='#543'><FONT style="font-size: 10pt">3.28</FONT></A>
</DIV>
</TD>
<TD>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <A HREF='#543'><FONT style="font-size: 10pt">Rights
    Plan</FONT></A>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">A-18
    </FONT>
</TD>
<TD>
</TD>
</TR>
</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    A-i
</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="6%">&nbsp;</TD>	<!-- colindex=01 type=quadleft -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="6%">&nbsp;</TD>	<!-- colindex=01 type=quadright -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="78%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=03 type=quadleft -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=03 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=03 type=quadright -->
</TR>
<TR valign="bottom">
<TD>
</TD>
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -15pt; margin-left: 25pt">
    <A HREF='#544'><FONT style="font-size: 10pt">3.29</FONT></A>
</DIV>
</TD>
<TD>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <A HREF='#544'><FONT style="font-size: 10pt">Pre-Signing
    Activities</FONT></A>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">A-19
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD>
</TD>
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -15pt; margin-left: 25pt">
    <A HREF='#545'><FONT style="font-size: 10pt">3.30</FONT></A>
</DIV>
</TD>
<TD>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <A HREF='#545'><FONT style="font-size: 10pt">No Knowledge of
    Breach</FONT></A>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">A-19
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom" style="line-height: 6pt">
<TD colspan="5">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD colspan="5" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#546'><B><FONT style="font-size: 10pt">ARTICLE 4
    REPRESENTATIONS AND WARRANTIES OF MERGER SUB AND
    PARENT</FONT></B></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <B><FONT style="font-size: 10pt">A-19</FONT></B>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD>
</TD>
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -15pt; margin-left: 25pt">
    <A HREF='#547'><FONT style="font-size: 10pt">4.01</FONT></A>
</DIV>
</TD>
<TD>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <A HREF='#547'><FONT style="font-size: 10pt">Organization and
    Qualification</FONT></A>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">A-19
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD>
</TD>
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -15pt; margin-left: 25pt">
    <A HREF='#548'><FONT style="font-size: 10pt">4.02</FONT></A>
</DIV>
</TD>
<TD>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <A HREF='#548'><FONT style="font-size: 10pt">Charter Documents
    and Bylaws</FONT></A>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">A-19
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD>
</TD>
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -15pt; margin-left: 25pt">
    <A HREF='#549'><FONT style="font-size: 10pt">4.03</FONT></A>
</DIV>
</TD>
<TD>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <A HREF='#549'><FONT style="font-size: 10pt">Authority Relative
    to this Agreement</FONT></A>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">A-19
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD>
</TD>
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -15pt; margin-left: 25pt">
    <A HREF='#550'><FONT style="font-size: 10pt">4.04</FONT></A>
</DIV>
</TD>
<TD>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <A HREF='#550'><FONT style="font-size: 10pt">No Violation;
    Required Filings and Consents</FONT></A>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">A-20
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD>
</TD>
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -15pt; margin-left: 25pt">
    <A HREF='#551'><FONT style="font-size: 10pt">4.05</FONT></A>
</DIV>
</TD>
<TD>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <A HREF='#551'><FONT style="font-size: 10pt">Litigation</FONT></A>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">A-20
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD>
</TD>
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -15pt; margin-left: 25pt">
    <A HREF='#552'><FONT style="font-size: 10pt">4.06</FONT></A>
</DIV>
</TD>
<TD>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <A HREF='#552'><FONT style="font-size: 10pt">Brokers</FONT></A>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">A-20
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD>
</TD>
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -15pt; margin-left: 25pt">
    <A HREF='#553'><FONT style="font-size: 10pt">4.07</FONT></A>
</DIV>
</TD>
<TD>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <A HREF='#553'><FONT style="font-size: 10pt">Financial
    Capability</FONT></A>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">A-20
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD>
</TD>
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -15pt; margin-left: 25pt">
    <A HREF='#554'><FONT style="font-size: 10pt">4.08</FONT></A>
</DIV>
</TD>
<TD>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <A HREF='#554'><FONT style="font-size: 10pt">No Business
    Activities</FONT></A>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">A-20
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD>
</TD>
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -15pt; margin-left: 25pt">
    <A HREF='#555'><FONT style="font-size: 10pt">4.09</FONT></A>
</DIV>
</TD>
<TD>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <A HREF='#556'><FONT style="font-size: 10pt">Information in
    Proxy Statement</FONT></A>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">A-21
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD>
</TD>
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -15pt; margin-left: 25pt">
    <A HREF='#556'><FONT style="font-size: 10pt">4.10</FONT></A>
</DIV>
</TD>
<TD>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <A HREF='#556'><FONT style="font-size: 10pt">No Knowledge of
    Breach</FONT></A>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">A-21
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom" style="line-height: 6pt">
<TD colspan="5">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD colspan="5" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#557'><B><FONT style="font-size: 10pt">ARTICLE 5
    COVENANTS</FONT></B></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <B><FONT style="font-size: 10pt">A-21</FONT></B>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD>
</TD>
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -15pt; margin-left: 25pt">
    <A HREF='#558'><FONT style="font-size: 10pt">5.01</FONT></A>
</DIV>
</TD>
<TD>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <A HREF='#558'><FONT style="font-size: 10pt">Interim
    Operations</FONT></A>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">A-21
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD>
</TD>
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -15pt; margin-left: 25pt">
    <A HREF='#559'><FONT style="font-size: 10pt">5.02</FONT></A>
</DIV>
</TD>
<TD>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <A HREF='#559'><FONT style="font-size: 10pt">Shareholders&#146;
    Meeting</FONT></A>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">A-24
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD>
</TD>
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -15pt; margin-left: 25pt">
    <A HREF='#560'><FONT style="font-size: 10pt">5.03</FONT></A>
</DIV>
</TD>
<TD>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <A HREF='#560'><FONT style="font-size: 10pt">Filings and
    Consents</FONT></A>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">A-25
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD>
</TD>
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -15pt; margin-left: 25pt">
    <A HREF='#561'><FONT style="font-size: 10pt">5.04</FONT></A>
</DIV>
</TD>
<TD>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <A HREF='#561'><FONT style="font-size: 10pt">Access to
    Information</FONT></A>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">A-26
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD>
</TD>
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -15pt; margin-left: 25pt">
    <A HREF='#562'><FONT style="font-size: 10pt">5.05</FONT></A>
</DIV>
</TD>
<TD>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <A HREF='#562'><FONT style="font-size: 10pt">Notification of
    Certain Matters</FONT></A>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">A-26
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD>
</TD>
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -15pt; margin-left: 25pt">
    <A HREF='#563'><FONT style="font-size: 10pt">5.06</FONT></A>
</DIV>
</TD>
<TD>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <A HREF='#563'><FONT style="font-size: 10pt">Public
    Announcements</FONT></A>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">A-26
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD>
</TD>
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -15pt; margin-left: 25pt">
    <A HREF='#564'><FONT style="font-size: 10pt">5.07</FONT></A>
</DIV>
</TD>
<TD>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <A HREF='#564'><FONT style="font-size: 10pt">Indemnification;
    Directors&#146; and Officers&#146; Insurance</FONT></A>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">A-27
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD>
</TD>
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -15pt; margin-left: 25pt">
    <A HREF='#565'><FONT style="font-size: 10pt">5.08</FONT></A>
</DIV>
</TD>
<TD>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <A HREF='#565'><FONT style="font-size: 10pt">Further Assurances;
    Reasonable Efforts</FONT></A>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">A-28
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD>
</TD>
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -15pt; margin-left: 25pt">
    <A HREF='#566'><FONT style="font-size: 10pt">5.09</FONT></A>
</DIV>
</TD>
<TD>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <A HREF='#566'><FONT style="font-size: 10pt">Solicitation</FONT></A>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">A-28
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD>
</TD>
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -15pt; margin-left: 25pt">
    <A HREF='#567'><FONT style="font-size: 10pt">5.10</FONT></A>
</DIV>
</TD>
<TD>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <A HREF='#567'><FONT style="font-size: 10pt">Third Party
    Confidentiality/Standstill Agreements</FONT></A>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">A-30
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD>
</TD>
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -15pt; margin-left: 25pt">
    <A HREF='#568'><FONT style="font-size: 10pt">5.11</FONT></A>
</DIV>
</TD>
<TD>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <A HREF='#568'><FONT style="font-size: 10pt">SEC
    Reports</FONT></A>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">A-30
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD>
</TD>
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -15pt; margin-left: 25pt">
    <A HREF='#569'><FONT style="font-size: 10pt">5.12</FONT></A>
</DIV>
</TD>
<TD>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <A HREF='#569'><FONT style="font-size: 10pt">Delisting</FONT></A>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">A-30
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD>
</TD>
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -15pt; margin-left: 25pt">
    <A HREF='#570'><FONT style="font-size: 10pt">5.13</FONT></A>
</DIV>
</TD>
<TD>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <A HREF='#570'><FONT style="font-size: 10pt">Cooperation with
    Financing</FONT></A>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">A-31
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD>
</TD>
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -15pt; margin-left: 25pt">
    <A HREF='#571'><FONT style="font-size: 10pt">5.14</FONT></A>
</DIV>
</TD>
<TD>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <A HREF='#571'><FONT style="font-size: 10pt">Shareholder
    Litigation</FONT></A>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">A-31
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD>
</TD>
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -15pt; margin-left: 25pt">
    <A HREF='#572'><FONT style="font-size: 10pt">5.15</FONT></A>
</DIV>
</TD>
<TD>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <A HREF='#572'><FONT style="font-size: 10pt">Conveyance
    Taxes</FONT></A>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">A-31
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD>
</TD>
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -15pt; margin-left: 25pt">
    <A HREF='#573'><FONT style="font-size: 10pt">5.16</FONT></A>
</DIV>
</TD>
<TD>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <A HREF='#573'><FONT style="font-size: 10pt">Special
    Meeting</FONT></A>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">A-31
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD>
</TD>
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -15pt; margin-left: 25pt">
    <A HREF='#574'><FONT style="font-size: 10pt">5.17</FONT></A>
</DIV>
</TD>
<TD>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <A HREF='#574'><FONT style="font-size: 10pt">State Takeover
    Laws</FONT></A>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">A-32
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD>
</TD>
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -15pt; margin-left: 25pt">
    <A HREF='#575'><FONT style="font-size: 10pt">5.18</FONT></A>
</DIV>
</TD>
<TD>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <A HREF='#575'><FONT style="font-size: 10pt">Employee Benefit
    Plan Matters</FONT></A>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">A-32
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD>
</TD>
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -15pt; margin-left: 25pt">
    <A HREF='#576'><FONT style="font-size: 10pt">5.19</FONT></A>
</DIV>
</TD>
<TD>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <A HREF='#576'><FONT style="font-size: 10pt">Warren Charitable
    Contributions</FONT></A>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">A-32
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom" style="line-height: 6pt">
<TD colspan="5">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD colspan="5" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#577'><B><FONT style="font-size: 10pt">ARTICLE 6
    CONDITIONS TO CONSUMMATION OF THE MERGER</FONT></B></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <B><FONT style="font-size: 10pt">A-32</FONT></B>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD>
</TD>
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -15pt; margin-left: 25pt">
    <A HREF='#578'><FONT style="font-size: 10pt">6.01</FONT></A>
</DIV>
</TD>
<TD>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <A HREF='#578'><FONT style="font-size: 10pt">Conditions to the
    Obligations of Each Party</FONT></A>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">A-32
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD>
</TD>
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -15pt; margin-left: 25pt">
    <A HREF='#579'><FONT style="font-size: 10pt">6.02</FONT></A>
</DIV>
</TD>
<TD>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <A HREF='#579'><FONT style="font-size: 10pt">Conditions to
    Obligations of Merger Sub and Parent</FONT></A>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">A-33
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD>
</TD>
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -15pt; margin-left: 25pt">
    <A HREF='#580'><FONT style="font-size: 10pt">6.03</FONT></A>
</DIV>
</TD>
<TD>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <A HREF='#580'><FONT style="font-size: 10pt">Conditions to
    Obligations of the Company</FONT></A>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">A-33
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom" style="line-height: 6pt">
<TD colspan="5">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD colspan="5" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#581'><B><FONT style="font-size: 10pt">ARTICLE 7
    TERMINATION</FONT></B></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <B><FONT style="font-size: 10pt">A-34</FONT></B>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD>
</TD>
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -15pt; margin-left: 25pt">
    <A HREF='#582'><FONT style="font-size: 10pt">7.01</FONT></A>
</DIV>
</TD>
<TD>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <A HREF='#582'><FONT style="font-size: 10pt">Termination by
    Mutual Consent</FONT></A>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">A-34
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD>
</TD>
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -15pt; margin-left: 25pt">
    <A HREF='#583'><FONT style="font-size: 10pt">7.02</FONT></A>
</DIV>
</TD>
<TD>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <A HREF='#583'><FONT style="font-size: 10pt">Termination by
    Merger Sub, Parent or the Company</FONT></A>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">A-34
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD>
</TD>
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -15pt; margin-left: 25pt">
    <A HREF='#584'><FONT style="font-size: 10pt">7.03</FONT></A>
</DIV>
</TD>
<TD>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <A HREF='#584'><FONT style="font-size: 10pt">Termination by
    Merger Sub and Parent</FONT></A>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">A-35
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD>
</TD>
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -15pt; margin-left: 25pt">
    <A HREF='#585'><FONT style="font-size: 10pt">7.04</FONT></A>
</DIV>
</TD>
<TD>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <A HREF='#585'><FONT style="font-size: 10pt">Termination by the
    Company</FONT></A>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">A-35
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD>
</TD>
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -15pt; margin-left: 25pt">
    <A HREF='#586'><FONT style="font-size: 10pt">7.05</FONT></A>
</DIV>
</TD>
<TD>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <A HREF='#586'><FONT style="font-size: 10pt">Effect of
    Termination</FONT></A>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">A-35
    </FONT>
</TD>
<TD>
</TD>
</TR>
</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    A-ii
</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="6%">&nbsp;</TD>	<!-- colindex=01 type=quadleft -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="6%">&nbsp;</TD>	<!-- colindex=01 type=quadright -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="78%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=03 type=quadleft -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=03 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=03 type=quadright -->
</TR>
<TR valign="bottom">
<TD colspan="5" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#587'><B><FONT style="font-size: 10pt">ARTICLE 8
    MISCELLANEOUS</FONT></B></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <B><FONT style="font-size: 10pt">A-36</FONT></B>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD>
</TD>
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -15pt; margin-left: 25pt">
    <A HREF='#588'><FONT style="font-size: 10pt">8.01</FONT></A>
</DIV>
</TD>
<TD>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <A HREF='#588'><FONT style="font-size: 10pt">Payment of Fees and
    Expenses</FONT></A>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">A-36
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD>
</TD>
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -15pt; margin-left: 25pt">
    <A HREF='#589'><FONT style="font-size: 10pt">8.02</FONT></A>
</DIV>
</TD>
<TD>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <A HREF='#589'><FONT style="font-size: 10pt">Survival</FONT></A>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">A-37
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD>
</TD>
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -15pt; margin-left: 25pt">
    <A HREF='#590'><FONT style="font-size: 10pt">8.03</FONT></A>
</DIV>
</TD>
<TD>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <A HREF='#590'><FONT style="font-size: 10pt">Modification or
    Amendment</FONT></A>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">A-37
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD>
</TD>
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -15pt; margin-left: 25pt">
    <A HREF='#591'><FONT style="font-size: 10pt">8.04</FONT></A>
</DIV>
</TD>
<TD>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <A HREF='#591'><FONT style="font-size: 10pt">Entire Agreement;
    Assignment</FONT></A>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">A-37
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD>
</TD>
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -15pt; margin-left: 25pt">
    <A HREF='#592'><FONT style="font-size: 10pt">8.05</FONT></A>
</DIV>
</TD>
<TD>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <A HREF='#592'><FONT style="font-size: 10pt">Validity</FONT></A>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">A-37
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD>
</TD>
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -15pt; margin-left: 25pt">
    <A HREF='#593'><FONT style="font-size: 10pt">8.06</FONT></A>
</DIV>
</TD>
<TD>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <A HREF='#593'><FONT style="font-size: 10pt">Notices</FONT></A>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">A-37
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD>
</TD>
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -15pt; margin-left: 25pt">
    <A HREF='#594'><FONT style="font-size: 10pt">8.07</FONT></A>
</DIV>
</TD>
<TD>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <A HREF='#594'><FONT style="font-size: 10pt">Governing Law;
    Submission to Jurisdiction; Waiver</FONT></A>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">A-38
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD>
</TD>
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -15pt; margin-left: 25pt">
    <A HREF='#595'><FONT style="font-size: 10pt">8.08</FONT></A>
</DIV>
</TD>
<TD>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <A HREF='#595'><FONT style="font-size: 10pt">Descriptive
    Headings</FONT></A>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">A-38
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD>
</TD>
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -15pt; margin-left: 25pt">
    <A HREF='#596'><FONT style="font-size: 10pt">8.09</FONT></A>
</DIV>
</TD>
<TD>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <A HREF='#596'><FONT style="font-size: 10pt">Counterparts</FONT></A>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">A-38
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD>
</TD>
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -15pt; margin-left: 25pt">
    <A HREF='#597'><FONT style="font-size: 10pt">8.10</FONT></A>
</DIV>
</TD>
<TD>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <A HREF='#597'><FONT style="font-size: 10pt">Certain
    Definitions</FONT></A>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">A-38
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD>
</TD>
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -15pt; margin-left: 25pt">
    <A HREF='#598'><FONT style="font-size: 10pt">8.11</FONT></A>
</DIV>
</TD>
<TD>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <A HREF='#598'><FONT style="font-size: 10pt">Specific
    Performance</FONT></A>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">A-39
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD>
</TD>
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -15pt; margin-left: 25pt">
    <A HREF='#599'><FONT style="font-size: 10pt">8.12</FONT></A>
</DIV>
</TD>
<TD>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <A HREF='#599'><FONT style="font-size: 10pt">Company Disclosure
    Schedule</FONT></A>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">A-39
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD>
</TD>
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -15pt; margin-left: 25pt">
    <A HREF='#600'><FONT style="font-size: 10pt">8.13</FONT></A>
</DIV>
</TD>
<TD>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <A HREF='#600'><FONT style="font-size: 10pt">Extension;
    Waiver</FONT></A>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">A-39
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD>
</TD>
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -15pt; margin-left: 25pt">
    <A HREF='#601'><FONT style="font-size: 10pt">8.14</FONT></A>
</DIV>
</TD>
<TD>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <A HREF='#601'><FONT style="font-size: 10pt">Third-Party
    Beneficiaries</FONT></A>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">A-39
    </FONT>
</TD>
<TD>
</TD>
</TR>
<TR valign="bottom">
<TD>
</TD>
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -15pt; margin-left: 25pt">
    <A HREF='#602'><FONT style="font-size: 10pt">8.15</FONT></A>
</DIV>
</TD>
<TD>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    <A HREF='#602'><FONT style="font-size: 10pt">Severability</FONT></A>
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD nowrap align="right" valign="bottom">
    <FONT style="font-size: 10pt">A-39
    </FONT>
</TD>
<TD>
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV align="left">
<!-- /TOC -->
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    A-iii
</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><U><FONT style="font-family: 'Times New Roman', Times">Exhibits</FONT></U></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="13%" align="right">&nbsp;</TD>	<!-- colindex=01 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=01 type=body -->
    <TD width="13%" align="left">&nbsp;</TD>	<!-- colindex=01 type=align1 -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="72%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
</TR>
<TR valign="bottom">
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    Exhibit&#160;1
</TD>
<TD nowrap align="left" valign="top">
    .02
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <FONT style="font-size: 10pt">Form of Certificate of Merger
    </FONT>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    Exhibit&#160;1
</TD>
<TD nowrap align="left" valign="top">
    .04(a)
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <FONT style="font-size: 10pt">Form of Certificate of
    Incorporation of the Surviving Corporation
    </FONT>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    Exhibit&#160;2
</TD>
<TD nowrap align="left" valign="top">
    .02(c)
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <FONT style="font-size: 10pt">Form of the Cash-Pay Option Holder
    Written Acknowledgment
    </FONT>
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    A-iv
</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <U><FONT style="font-family: 'Times New Roman', Times">AGREEMENT
    AND PLAN OF MERGER</FONT></U>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    THIS AGREEMENT AND PLAN OF MERGER (this
    &#147;<U>Agreement</U>&#148;), dated as of January&#160;23,
    2007, is entered into by and among Blair Corporation, a Delaware
    corporation (the &#147;<U>Company</U>&#148;), BLR Acquisition
    Corp., a Delaware corporation (&#147;<U>Merger Sub</U>&#148;),
    and Appleseed&#146;s Topco, Inc., a Delaware corporation
    (&#147;<U>Parent</U>&#148;). Merger Sub is a wholly owned direct
    or indirect subsidiary of Parent.
</DIV>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <FONT style="font-family: 'Times New Roman', Times">RECITALS
    </FONT>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    WHEREAS, the respective Boards of Directors of the Company (the
    &#147;<U>Company Board</U>&#148;), Parent and Merger Sub have
    determined it to be advisable and in the best interests of their
    respective stockholders for Parent to acquire the Company by
    means of the merger of Merger Sub with and into the Company, on
    the terms and subject to the conditions set forth in this
    Agreement;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    WHEREAS, the Company Board and the Board of Directors of each of
    Parent and Merger Sub has approved and declared advisable this
    Agreement, including all the terms and conditions set forth
    herein, and all the transactions contemplated hereby, including
    the Merger (as defined below) (collectively, the
    &#147;<U>Transactions</U>&#148;);&#160;and
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    WHEREAS, each of the Company, Parent and Merger Sub desires to
    make certain representations, warranties, covenants and
    agreements in connection with the Transactions and also to
    prescribe various conditions to the consummation thereof;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    NOW, THEREFORE, in consideration of the Recitals and the
    respective representations, warranties, covenants and agreements
    set forth herein, the parties hereto agree as follows:
</DIV>
<A name='501'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <FONT style="font-family: 'Times New Roman', Times">ARTICLE&#160;1
    </FONT>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <FONT style="font-family: 'Times New Roman', Times">THE MERGER
    </FONT>
</DIV>
</A>
<A name='502'>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    1.01&#160;&#160;<I><U>The Merger</U></I>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    At the Effective Time (as defined in <U>Section&#160;1.02</U>),
    subject to the terms and conditions of this Agreement and in
    accordance with the provisions of the Delaware General
    Corporation Law (&#147;<U>DGCL</U>&#148;), Merger Sub shall be
    merged (the &#147;<U>Merger</U>&#148;) with and into the
    Company. Following the Merger, the separate corporate existence
    of Merger Sub shall cease, and the Company shall continue as the
    surviving corporation (sometimes hereinafter referred to as the
    &#147;<U>Surviving Corporation</U>&#148;) and shall continue to
    be governed by the laws of the State of Delaware.
</DIV>
<A name='503'>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    1.02&#160;&#160;<I><U>Effective Time</U></I>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    On the Closing Date (as defined in <U>Section&#160;1.08</U>),
    subject to the terms and conditions of this Agreement and
    provided that this Agreement has not been terminated or
    abandoned pursuant to <U>Article&#160;7</U> hereof, the Company
    and Merger Sub will cause a Certificate of Merger in the form
    attached hereto as <U>Exhibit&#160;1.02</U> (the
    &#147;<U>Certificate of Merger</U>&#148;) to be duly executed,
    acknowledged and filed, in the manner required by the DGCL, with
    the Secretary of State of the State of Delaware, and the parties
    shall take such other and further actions as may be required by
    Law to make the Merger effective. The Merger shall become
    effective at the time that the Certificate of Merger is duly
    filed with the Secretary of State of the State of Delaware, or
    such later time as is agreed upon by the parties hereto and
    specified in the Certificate of Merger, such time being referred
    to herein as the &#147;<U>Effective Time</U>.&#148;
</DIV>
<A name='504'>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    1.03&#160;&#160;<I><U>Effects of the Merger</U></I>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Merger shall have the effects set forth in the DGCL. Without
    limiting the generality of the foregoing, and subject thereto,
    at the Effective Time, all the properties, rights, privileges,
    powers and franchises of the Company and the Merger Sub shall
    vest in the Surviving Corporation, and all debts, liabilities,
    obligations, restrictions, disabilities and duties of the
    Company and the Merger Sub shall become the debts, liabilities,
    obligations, restrictions, disabilities and duties of the
    Surviving Corporation.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    A-1
</DIV><!-- END LOGICAL PAGE -->
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->
<A name='505'>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    1.04&#160;&#160;<I><U>Certificate of Incorporation and Bylaws of
    the Surviving Corporation</U></I>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (a)&#160;The Certificate of Incorporation of the Company shall
    be amended in the Merger to read in its entirety as set forth as
    <U>Exhibit&#160;1.04(a)</U>attached hereto and, as so amended,
    shall be the Certificate of Incorporation of the Surviving
    Corporation until thereafter amended in accordance with the
    provisions thereof and hereof and applicable Law.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (b)&#160;The Bylaws of Merger Sub in effect at the Effective
    Time shall be the Bylaws of the Surviving Corporation, until
    amended in accordance with the provisions thereof and hereof and
    applicable Law.
</DIV>
<A name='506'>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    1.05&#160;&#160;<I><U>Directors</U></I>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The directors of Merger Sub immediately prior to the Effective
    Time shall be the initial directors of the Surviving Corporation
    and shall hold office until their respective successors are duly
    elected and qualified, or their earlier death, resignation or
    removal in accordance with applicable Law and the Surviving
    Corporation&#146;s Certificate of Incorporation and Bylaws.
</DIV>
<A name='507'>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    1.06&#160;&#160;<I><U>Officers</U></I>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The officers of the Company immediately prior to the Effective
    Time shall be the initial officers of the Surviving Corporation
    and shall hold office until their respective successors are duly
    elected and qualified, or their earlier death, resignation or
    removal.
</DIV>
<A name='508'>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    1.07&#160;&#160;<I><U>Name</U></I>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The name of the Surviving Corporation shall be &#147;Blair
    Corporation.&#148;
</DIV>
<A name='509'>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    1.08&#160;&#160;<I><U>Closing</U></I>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Subject to the conditions contained in this Agreement, the
    closing of the Merger (the &#147;<U>Closing</U>&#148;) shall
    take place (i)&#160;at the offices of Kirkland&#160;&#38; Ellis
    LLP, 200 East Randolph Drive, Chicago, IL 60601, as promptly as
    practicable, but in no event later than the third business day
    following the satisfaction (or waiver if permissible) of the
    conditions set forth in <U>Article&#160;6</U> or (ii)&#160;at
    such other place and time
    <FONT style="white-space: nowrap">and/or</FONT> on
    such other date as the Company and Merger Sub may agree in
    writing. The date on which the Closing occurs is hereinafter
    referred to as the &#147;<U>Closing Date</U>.&#148;
</DIV>
<A name='510'>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    1.09&#160;&#160;<I><U>Additional Actions</U></I>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If, at any time after the Effective Time, the Surviving
    Corporation shall consider or be advised that any deeds, bills
    of sale, assignments or assurances in law or any other acts are
    necessary or desirable to (a)&#160;vest, perfect or confirm, of
    record or otherwise, in the Surviving Corporation its right,
    title or interest in, to or under any of the rights, properties
    or assets of the Company or Merger Sub, or (b)&#160;otherwise
    carry out the provisions of this Agreement, the Company and its
    proper officers and directors shall be deemed to have granted to
    the Surviving Corporation an irrevocable power of attorney to
    execute and deliver all such deeds, assignments and assurances
    in law and to take all acts necessary, proper or desirable to
    vest, perfect or confirm title to and possession of such rights,
    properties or assets in the Surviving Corporation and otherwise
    to carry out the provisions of this Agreement, and the proper
    officers and directors of the Surviving Corporation are
    authorized in the name of the Company or otherwise to take any
    and all such action.
</DIV>
<A name='511'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <FONT style="font-family: 'Times New Roman', Times">ARTICLE&#160;2<BR>
    </FONT>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <FONT style="font-family: 'Times New Roman', Times">EFFECT OF
    THE MERGER ON THE CAPITAL STOCK<BR>
    </FONT>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <FONT style="font-family: 'Times New Roman', Times">OF THE
    COMPANY AND MERGER SUB
    </FONT>
</DIV>
</A>
<A name='512'>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    2.01&#160;&#160;<I><U>Effect on Shares of Capital Stock</U></I>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (a)&#160;<U>Common Shares of the Company</U>. As of the
    Effective Time, by virtue of the Merger and without any action
    on the part of the holder of any Company common stock, no par
    value per share (&#147;<U>Common Shares</U>&#148;), the Company
    or Merger Sub, each Common Share that is issued and outstanding
    immediately prior to the Effective Time (other than Dissenting
    Shares and Common Shares referenced in
    <U>Section&#160;2.01(b)</U>) shall be canceled and extinguished
    and
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    A-2
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    converted into the right to receive $42.50 in cash (the
    &#147;<U>Merger Consideration</U>&#148;), payable to the holder
    thereof, without interest or dividends thereon, less any
    applicable withholding of taxes, in the manner provided in
    <U>Section&#160;2.03</U>. All such Common Shares, when so
    converted, shall no longer be outstanding and shall
    automatically be canceled and each holder of a certificate or
    certificates representing any such Common Shares shall cease to
    have any rights with respect thereto, except the right to
    receive the Merger Consideration, as specified in the preceding
    sentence.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (b)&#160;<U>Cancellation of Certain Common Shares</U>. As of the
    Effective Time, by virtue of the Merger and without any action
    on the part of the holder of any Common Shares, the Company or
    Merger Sub, each Common Share that is owned by the Company or
    any wholly owned subsidiary as treasury stock or otherwise or
    owned by Parent or Merger Sub immediately prior to the Effective
    Time shall automatically be canceled and shall cease to exist,
    and no cash or other consideration shall be delivered or
    deliverable in exchange therefor.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (c)&#160;<U>Capital Stock of Merger Sub</U>. As of the Effective
    Time, each share of common stock, par value $.01&#160;per share,
    of Merger Sub (&#147;<U>Merger Sub Common Stock</U>&#148;)
    issued and outstanding immediately prior to the Effective Time
    shall, by virtue of the Merger and without any action on the
    part of the holder, the Company or Merger Sub, be converted into
    one validly issued, fully paid and non-assessable share of
    common stock, par value $.01&#160;per share, of the Surviving
    Corporation (&#147;<U>Surviving Corporation Common
    Stock</U>&#148;). Each certificate that, immediately prior to
    the Effective Time, represented issued and outstanding shares of
    Merger Sub capital stock shall, from and after the Effective
    Time, automatically and without the necessity of presenting the
    same for exchange, represent the shares of the Surviving
    Corporation capital stock into which such shares have been
    converted pursuant to the terms hereof; provided, however, that
    the record holder thereof shall receive, upon surrender of any
    such certificate, a certificate representing the shares of
    Surviving Corporation capital stock into which the shares of
    Merger Sub capital stock formerly represented thereby shall have
    been converted pursuant to the terms hereof.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (d)&#160;<U>Dissenting Shares</U>. Notwithstanding anything in
    this Agreement to the contrary, any Common Shares issued and
    outstanding immediately prior to the Effective Time and held by
    a holder (a &#147;<U>Dissenting Shareholder</U>&#148;) who has
    not voted in favor of the Merger or consented thereto in writing
    and who has properly demanded appraisal for such Common Shares
    in accordance with the DGCL (&#147;<U>Dissenting
    Shares</U>&#148;) shall not be converted into a right to receive
    the Merger Consideration at the Effective Time in accordance
    with <U>Section&#160;2.01(a)</U> hereof, but shall represent and
    become the right to receive such consideration as may be
    determined to be due to such Dissenting Shareholder pursuant to
    the laws of the State of Delaware, unless and until such holder
    fails to perfect or withdraws or otherwise loses such
    holder&#146;s right to appraisal and payment under the DGCL. If,
    after the Effective Time, such holder fails to perfect or
    withdraws or otherwise loses such holder&#146;s right to
    appraisal, such former Dissenting Shares held by such holder
    shall be treated as if they had been converted as of the
    Effective Time into a right to receive, upon surrender as
    provided above, the Merger Consideration, without any interest
    or dividends thereon, in accordance with
    <U>Section&#160;2.01(a)</U>. The Company shall give Parent
    prompt notice of any demands received by the Company for
    appraisal of Common Shares, withdrawals of such demands and any
    other instruments served pursuant to the DGCL and received by
    the Company. The Company shall not, except with the prior
    written consent of Parent, make any payment with respect to, or
    settle or offer to settle, any such demands.
</DIV>
<A name='513'>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    2.02&#160;&#160;<I><U>Options; Restricted Stock; Stock
    Plans</U></I>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (a)&#160;For purposes of this Agreement, the term
    &#147;<U>Option</U>&#148; means each outstanding unexercised
    option to purchase Common Shares, whether or not then vested or
    fully exercisable, granted to any current or former employee or
    director of the Company or any subsidiary of the Company or any
    other person under any stock option plan or similar plan of the
    Company or in connection with any employment, consulting or
    other agreement with the Company or any subsidiary of the
    Company prior to the date hereof (including, without limitation,
    the Company&#146;s 2000 Omnibus Stock Plan (the &#147;<U>Stock
    Plans</U>&#148;)).
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (b)&#160;As part of the Transactions, the Company shall take all
    actions necessary so that at the Effective Time, (i)&#160;all
    Options shall be canceled and (ii)&#160;all Cash-Pay Options (as
    defined below) shall become immediately vested and exercisable
    in full. In consideration of such cancellation, each holder of
    any Option with an exercise price per Common Share less than the
    Merger Consideration (each, a &#147;<U>Cash-Pay
    Option</U>&#148;) will receive from the Company in settlement of
    such Cash-Pay Option at the Closing a cash payment, subject to
    any required withholding of taxes, equal to the product of
    (i)&#160;the total number of Common Shares otherwise issuable
    upon exercise of any such Cash-
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    A-3
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Pay Option and (ii)&#160;the excess, if any, of the Merger
    Consideration per Common Share less the applicable exercise
    price per Common Share otherwise issuable upon exercise of such
    Cash-Pay Option (the &#147;<U>Cash-Pay Option
    Consideration</U>&#148;). Each Option that has a exercise price
    per Common Share equal to or in excess of the Merger
    Consideration shall be canceled at the Effective Time for no
    consideration.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (c)&#160;The Company shall use its reasonable best efforts to
    obtain the written acknowledgement of each holder of a then
    outstanding Cash-Pay Option that (i)&#160;the payment of the
    Cash-Pay Option Consideration will satisfy in full the
    Company&#146;s obligation to such person pursuant to such
    Cash-Pay Option and (ii)&#160;upon payment of the Cash-Pay
    Option Consideration, such Cash-Pay Option held by such holder
    shall, without any action on the part of the Company or the
    holder, be deemed terminated, canceled, void and of no further
    force and effect as between the Company and the holder and
    neither party shall have any further rights or obligations with
    respect thereto. The form of the written acknowledgment to be
    provided to the Company to each holder of a Cash-Pay Option is
    attached hereto as <U>Exhibit&#160;2.02(c)</U>.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (d)&#160;As of the Effective Time, each share of restricted
    Common Shares which was issued pursuant to the Stock Plans prior
    to the date hereof, whether in book-entry or certificated form,
    shall become fully vested and shall be converted into, and shall
    be canceled in exchange for, the right to receive the Merger
    Consideration, plus any
    <FONT style="white-space: nowrap">&#147;gross-up&#148;</FONT>
    for income taxes payable on account of such acceleration of the
    vesting of such restricted Common Shares as provided in each
    such holder&#146;s restricted stock award agreement as in effect
    as of the date hereof.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (e)&#160;Except as otherwise provided herein or agreed to in
    writing by Merger Sub and the Company or as may be necessary to
    administer Options or restricted Common Shares issued under the
    Stock Plans that remain outstanding following the Effective
    Time, the Stock Plans shall terminate effective as of the
    Effective Time and no participant in the Stock Plans shall
    thereafter be granted any rights thereunder to acquire any
    equity securities of the Company, the Surviving Corporation,
    Parent or any subsidiary of any of the foregoing.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (f)&#160;The Company covenants that prior to the Effective Time
    it will take all actions necessary under that certain SEC
    no-action letter, dated January&#160;12, 1999, to Skadden, Arps,
    Slate, Meagher&#160;&#38; Flom, to provide that the cancellation
    and cash-out and conversion of Cash-Pay Options pursuant to this
    <U>Section&#160;2.02</U> will qualify for exemption under
    <FONT style="white-space: nowrap">Rule&#160;16b-3(d)</FONT>
    or (e), as applicable, under the Exchange Act.
</DIV>
<A name='514'>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    2.03&#160;&#160;<I><U>Payment for Common Shares in the
    Merger</U></I>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (a)&#160;At or prior to the Effective Time, (i)&#160;Merger Sub
    shall appoint a commercial bank or trust company reasonably
    acceptable to the Company to act as exchange and paying agent,
    registrar and transfer agent (the &#147;<U>Agent</U>&#148;) for
    the purpose of exchanging certificates representing, immediately
    prior to the Effective Time, Common Shares for the aggregate
    Merger Consideration, and (ii)&#160;Merger Sub shall deposit, or
    Merger Sub shall otherwise take all steps necessary to cause to
    be deposited, in trust with the Agent for the benefit of the
    holders of Common Shares, cash in an aggregate amount equal to
    the product of (x)&#160;the number of Common Shares issued and
    outstanding immediately prior to the Effective Time and entitled
    to receive the Merger Consideration in accordance with
    <U>Section&#160;2.01(a)</U> and (y)&#160;the Merger
    Consideration (such aggregate amount being hereinafter referred
    to as the &#147;<U>Payment Fund</U>&#148;). For purposes of
    determining the aggregate amount of cash to be deposited by
    Merger Sub pursuant to this Section <U>2.03(a)</U>, Merger Sub
    shall assume that no holder of Common Shares will perfect their
    right to appraisal of their Common Shares under the DGCL.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (b)&#160;Promptly after the Effective Time, but in no event more
    than three business days thereafter, the Surviving Corporation
    shall cause the Agent to mail to each record holder of a
    certificate or certificates (the
    &#147;<U>Certificates</U>&#148;) that immediately prior to the
    Effective Time represented Common Shares (i)&#160;a notice of
    the effectiveness of the Merger, (ii)&#160;a form letter of
    transmittal which shall specify that delivery shall be effected,
    and risk of loss and title to the Certificates shall pass, only
    upon proper delivery of the Certificates to the Agent, which
    shall be in a form and contain such other provisions as Parent
    and the Company may determine necessary, and
    (iii)&#160;instructions for use in surrendering such
    Certificates and receiving the Merger Consideration in respect
    thereof to which such holder is entitled under this Agreement.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (c)&#160;Upon surrender to the Agent of a Certificate, together
    with such letter of transmittal duly executed and completed in
    accordance with the instructions thereto, the holder of such
    Certificate shall be entitled to receive in exchange therefor,
    in the case of Common Shares (other than Common Shares to be
    canceled pursuant to
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    A-4
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <U>Section&#160;2.01(b)</U>), cash (due and payable to such
    holder, at its election, in check or immediately available
    funds) in an amount equal to the product of (i)&#160;the number
    of Common Shares formerly represented by such Certificate and
    (ii)&#160;the Merger Consideration. No interest or dividends
    will be paid or accrued on the Merger Consideration. If the
    Merger Consideration is to be delivered in the name of a person
    other than the person in whose name the Certificate surrendered
    is registered in the stock transfer records of the Company, it
    shall be a condition of such delivery that the Certificate so
    surrendered shall be properly endorsed or otherwise in proper
    form for transfer and that the person requesting such delivery
    shall pay any transfer or other taxes required by reason of such
    delivery to a person other than the registered holder of the
    Certificate, or that such person shall establish to the
    reasonable satisfaction of the Surviving Corporation that such
    tax has been paid or is not applicable. Until surrendered in
    accordance with the provisions of this <U>Section&#160;2.03</U>,
    each Certificate (other than Certificates representing
    Dissenting Shares or Common Shares to be canceled pursuant to
    <U>Section&#160;2.01(b)</U>) shall represent, for all purposes,
    only the right to receive an amount in cash equal to the Merger
    Consideration multiplied by the number of Common Shares formerly
    evidenced by such Certificate without any interest or dividends
    thereon. The Payment Fund shall be used as provided herein and
    shall not be used for any other purpose.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (d)&#160;The consideration issued upon the surrender of
    Certificates in accordance with this Agreement shall be deemed
    to have been issued in full satisfaction of all rights
    pertaining to such Common Shares formerly represented thereby.
    After the Effective Time, there shall be no transfers on the
    stock transfer books of the Surviving Corporation of any Common
    Shares that were outstanding immediately prior to the Effective
    Time. If, after the Effective Time, Certificates are presented
    to the Surviving Corporation, they shall be canceled and
    exchanged as provided in this <U>Article&#160;2</U>.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (e)&#160;Any portion of the Payment Fund (including any amounts
    that may be payable to the former shareholders of the Company in
    accordance with the terms of this Agreement) which remains
    unclaimed by the former shareholders of the Company upon the
    180th&#160;day immediately following the Closing Date shall be
    returned to the Surviving Corporation, upon demand, and any
    former shareholders of the Company who have not theretofore
    complied with this <U>Article&#160;2</U> shall, subject to
    <U>Section&#160;2.03(f)</U>, thereafter look only to the
    Surviving Corporation only as general unsecured creditors
    thereof for payment of any Merger Consideration, without any
    interest or dividends thereon, that may be payable in respect of
    each Common Share held by such shareholders. Following the
    Closing, the Agent shall retain the right to invest and reinvest
    the Payment Fund on behalf of the Surviving Corporation in
    securities listed or guaranteed by the United States government
    or certificates of deposit of commercial banks that have, or are
    members of a group of commercial banks that has, consolidated
    total assets of not less than $500,000,000 and the Surviving
    Corporation shall receive the interest earned thereon.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (f)&#160;None of Merger Sub, the Company or Agent shall be
    liable to a holder of Certificates or any other person in
    respect of any cash or other consideration delivered to a public
    official pursuant to any applicable abandoned property, escheat
    or similar Law. If any Certificates shall not have been
    surrendered upon the seventh anniversary of the Closing Date (or
    immediately prior to such earlier date on which any Merger
    Consideration, dividends (whether in cash, stock or property) or
    other distributions with respect to Common Shares in respect of
    such Certificate would otherwise escheat to or become the
    property of any Governmental Entity (as defined in
    <U>Section&#160;3.06(b)</U>) any such shares, cash, dividends or
    distributions in respect of such Certificate shall, to the
    extent permitted by applicable Law, become the property of the
    Surviving Corporation, free and clear of all claims or interests
    of any person previously entitled thereto.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (g)&#160;In the event any Certificate shall have been lost,
    stolen or destroyed, upon the making of an affidavit (in form
    and substance acceptable to the Surviving Corporation) of that
    fact by the person (who shall be the record owner of such
    Certificate) claiming such Certificate to be lost, stolen or
    destroyed and, if reasonably required by the Surviving
    Corporation, the posting by such person of a bond in such amount
    as the Surviving Corporation may direct as indemnity against any
    claim that may be made against it with respect to such
    Certificate, the Agent will issue in exchange for such lost,
    stolen or destroyed Certificate the Merger Consideration
    deliverable in respect thereof pursuant to this Agreement.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (h)&#160;<U>Required Withholding</U>. Each of the Agent, Merger
    Sub, the Surviving Corporation and Parent shall be entitled to
    deduct and withhold from the consideration otherwise payable to
    any holder of Common Shares or Cash-Pay Options pursuant to this
    Agreement such amounts as may be required to be deducted or
    withheld with respect to
</DIV>

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    <BR>
    A-5
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    the making of such payment under the Internal Revenue Code of
    1986, as amended (the &#147;<U>Code</U>&#148;), or any
    applicable provision of state, local or foreign tax law or
    regulation thereunder. To the extent that amounts are so
    deducted or withheld, such amounts shall be treated for all
    purposes of this Agreement as having been paid to the person to
    whom such amounts would otherwise have been paid.
</DIV>
<A name='515'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <FONT style="font-family: 'Times New Roman', Times">ARTICLE&#160;3
    </FONT>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <FONT style="font-family: 'Times New Roman', Times">REPRESENTATIONS
    AND WARRANTIES OF THE COMPANY
    </FONT>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Except as set forth in the disclosure schedule (the section
    numbers of which shall correspond to the numbered Sections of
    this Agreement) (i)&#160;with respect to
    <U>Section&#160;3.03(a)</U>, <U>Section&#160;3.09(k)</U>, the
    last sentence of <U>Section&#160;3.10,</U>
    <U>Section&#160;3.20</U>, <U>Section&#160;3.29</U> and
    <U>Section&#160;5.01(b)</U> hereof, which schedules have been
    delivered by the Company to Merger Sub and Parent prior to the
    execution of this Agreement (and which will not be amended or
    modified, by delivery of the Deferred Schedules or otherwise)
    and (ii)&#160;the balance of the disclosure schedules called for
    by this Agreement (noted in this Agreement by the words
    &#147;except as set forth in the Company Disclosure
    Schedule&#148; or words of similar meaning), which will be
    prepared in good faith and delivered by the Company to Parent no
    later than the tenth business day immediately following the date
    of this Agreement (the &#147;<U>Deferred Schedules</U>, and
    collectively with the schedules described in clause&#160;(i)
    above, the &#147;<U>Company Disclosure Schedule</U>&#148;; it
    being agreed that the Company shall describe in reasonable
    detail the facts, events and occurrences required to be
    disclosed on the Deferred Schedules, that the Company and Parent
    will resolve in good faith any disputes regarding the
    information
    <FONT style="white-space: nowrap">and/or</FONT> level
    of detail disclosed on the Deferred Schedules, and it is further
    agreed by each of the parties hereto that delivery of the
    Deferred Schedules shall be deemed to be given on the date
    hereof and shall not limit, impair or modify Parent and Merger
    Sub&#146;s right to terminate this Agreement if the condition
    set forth in <U>Section&#160;6.02(c)</U> shall not have been
    satisfied), the Company represents and warrants to each of
    Merger Sub and Parent that:
</DIV>
<A name='516'>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    3.01&#160;&#160;<I><U>Organization and Qualification</U></I>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Company and each of its subsidiaries is a corporation or
    limited liability company, as the case may be, duly organized or
    formed, as the case may be, validly existing and in good
    standing under the laws of its state or jurisdiction of
    incorporation or formation, as the case may be, and has the
    requisite corporate power and authority to own, lease and
    operate its properties and to carry on its business as now being
    conducted, except where the failure to be in good standing or to
    have such approvals would not, individually or in the aggregate,
    have a Company Material Adverse Effect (as defined below). The
    Company and each of its subsidiaries 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
    where the failure to be so qualified or licensed and in good
    standing would not, individually or in the aggregate, have a
    Company Material Adverse Effect. As used in this Agreement, the
    term &#147;<U>Company Material Adverse Effect</U>&#148; means
    any fact, event, circumstance or effect that (i)&#160;is
    material and adverse to the business, the financial condition or
    results of operations of the Company and its subsidiaries, taken
    as a whole, other than any Excluded Matters or
    (ii)&#160;prevents or materially delays the ability of the
    Company and its subsidiaries to perform in all material respects
    their obligations under this Agreement or to consummate the
    Transactions in accordance with the terms hereof. As used in
    this Agreement, &#147;<U>Excluded Matters</U>&#148; means any
    one or more of the following: (i)&#160;changes in laws, rules or
    regulations of general applicability or interpretations thereof
    by Governmental Authorities, (ii)&#160;changes in United States
    generally accepted accounting principles, (iii)&#160;general
    changes in economic conditions or general changes in the
    industry in which the Company operates generally which do not
    have a disproportionate effect on the Company and its
    subsidiaries taken as a whole, (iv)&#160;a change in the market
    price or trading volume of the Common Shares, in and of itself,
    provided that a change in the market price or trading volume of
    the Common Shares may be used, as applicable, as evidence that
    some other effect, circumstance, event, fact, transaction or
    occurrence has had, or is reasonably likely to have, a Company
    Material Adverse Effect, (v)&#160;expenses incurred in
    connection with the Transactions which are permitted pursuant to
    <U>Section&#160;5.01</U> of this Agreement, (vi)&#160;the
    payment of any amounts due and payable, or the provision of any
    benefits to, any officer or employee of the Company or its
    subsidiaries under employment,
    <FONT style="white-space: nowrap">change-in-control</FONT>
    or severance agreements with respect to any such contractual
    agreement or arrangement as in effect as of the date hereof or
    any payments made to holders of Options disclosed in
    <U>Section&#160;3.03(a)</U> hereof, (vii)&#160;changes in
    national or international political or social conditions
    including the engagement
</DIV>

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    <BR>
    A-6
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    by the United States in hostilities, whether or not pursuant to
    the declaration of a national emergency or war, or the
    occurrence of any military or terrorist attack upon or within
    the United States, or any of its territories, possessions or
    diplomatic or consular offices or upon any military
    installation, equipment or personnel of the United States, or
    (viii)&#160;with respect to the Company, as a result of any
    action or omission taken with the prior written consent of
    Merger Sub and Parent or as otherwise expressly permitted by
    this Agreement.
</DIV>
<A name='517'>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    3.02&#160;&#160;<I><U>Charter Documents and Bylaws</U></I>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A complete and correct copy of the certificate of incorporation
    and the bylaws of the Company in full force and effect as of the
    date hereof has been filed by the Company with the SEC Reports
    (as defined below). The Company is not in violation of any of
    the provisions of its certificate of incorporation or bylaws. No
    subsidiary of the Company is in violation of any of the
    provisions of its certificate of incorporation or bylaws (or
    equivalent organizational documents).
</DIV>
<A name='518'>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    3.03&#160;&#160;<I><U>Capitalization</U></I>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (a)&#160;The authorized capital stock of the Company consists of
    12,000,000 Common Shares. As of the date of this Agreement,
    (i)&#160;3,990,093 Common Shares were issued and outstanding
    (including 138,501 unvested restricted Common Shares issued
    pursuant to the Stock Plans), (ii)&#160;750,000 Common Shares
    were reserved for issuance pursuant to the Stock Plans, of which
    94,588 Common Shares are subject to outstanding Options (all of
    which are Cash-Pay Options) and (iii)&#160;6,085,347 Common
    Shares were held by the Company in its treasury. The weighted
    average exercise price for the aforementioned Cash-Pay Options
    is $21.89. Except as set forth in this
    <U>Section&#160;3.03(a)</U>, there are not now, and at the
    Effective Time there will not be, any options, warrants, calls,
    subscriptions, or other rights, or other agreements or
    commitments of any character (including, without limitation, any
    &#147;poison pill&#148; or rights agreement or similar
    agreement) relating to the issued or unissued capital stock of
    the Company or obligating the Company to issue, transfer or sell
    any shares of capital stock of, or other equity interests in,
    the Company or any subsidiary of the Company. The Company
    Disclosure Schedule sets forth the name of each holder of an
    Option, together with the grant date, vesting schedule, exercise
    price and number of Common Shares issuable upon exercise of each
    such Option. All Common Shares subject to such Options, upon
    issuance on the terms and conditions specified in the
    instruments pursuant to which they are issuable, will be duly
    authorized, validly issued, fully paid, nonassessable and free
    of preemptive rights. All issued and outstanding Common Shares
    are duly authorized, validly issued, fully paid, nonassessable
    and free of preemptive rights. All of the outstanding shares of
    capital stock of, or other equity interests in, each subsidiary
    of the Company have been duly authorized and validly issued and
    are fully paid and non-assessable and, are owned by either the
    Company or another of its wholly-owned subsidiaries, free and
    clear of all liens, charges, claims or encumbrances. There are
    no outstanding obligations of the Company or any of its
    subsidiaries to repurchase, redeem or otherwise acquire any
    shares of capital stock of, or other equity interests in, the
    Company or any subsidiary of the Company.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (b)&#160;Except as otherwise disclosed in SEC Reports, there are
    no shareholders agreements, voting trusts or other agreements or
    understandings relating to voting or disposition of any shares
    of capital stock of the Company or granting to any person or
    group of persons the right to elect, or to designate or nominate
    for election, a director to the Company Board.
</DIV>
<A name='519'>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    3.04&#160;&#160;<I><U>Authority Relative to this
    Agreement</U></I>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Company has the requisite corporate power and authority to
    execute and deliver this Agreement, to perform its obligations
    hereunder, and subject to the adoption of this Agreement by the
    holders of a majority of the outstanding Common Shares entitled
    to vote thereon, to consummate the Merger and the other
    Transactions. The execution and delivery of this Agreement and
    the consummation of the Merger and the other Transactions 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 the Company&#146;s execution
    and delivery of this Agreement or to consummate the Transactions
    (other than the adoption of this Agreement by the holders of a
    majority of the outstanding Common Shares entitled to vote
    thereon). This Agreement has been duly and validly executed and
    delivered by the Company, and (assuming this Agreement
    constitutes a valid and binding obligation of Merger Sub and
    Parent) constitutes and will constitute the valid and binding
    obligation of the Company, enforceable against the Company in
    accordance with its terms, subject to applicable bankruptcy,
    insolvency, reorganization, moratorium or other similar laws
</DIV>

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    <BR>
    A-7
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    relating to creditors&#146; rights generally and to general
    principles of equity. The only action required to be taken by
    the shareholders of the Company in order to consummate the
    Merger is the adoption of this Agreement by the affirmative vote
    of a majority of the outstanding Common Shares entitled to vote
    thereon.
</DIV>
<A name='520'>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    3.05&#160;&#160;<I><U>Company Subsidiaries</U></I>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Company Disclosure Schedule contains a correct and complete
    list of each subsidiary of the Company, the name and location of
    the business owned or operated by each such subsidiary and the
    jurisdiction in which each such subsidiary is incorporated or
    organized. The Company Disclosure Schedule sets forth for each
    subsidiary of the Company: (i)&#160;its authorized capital stock
    or share capital; (ii)&#160;the number of issued and outstanding
    shares of capital stock or share capital; and (iii)&#160;the
    holder or holders of such shares. Except for the capital stock
    of its subsidiaries, the Company does not own, directly or
    indirectly, any capital stock or other ownership interest in any
    Person. No subsidiary of the Company owns, directly or
    indirectly, any capital stock or other ownership interest in any
    Person, except for the capital stock
    <FONT style="white-space: nowrap">and/or</FONT> other
    ownership interest in another wholly-owned subsidiary of the
    Company.
</DIV>
<A name='521'>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    3.06&#160;&#160;<I><U>No Violation; Required Filings and
    Consents</U></I>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (a)&#160;The execution and delivery by the Company of this
    Agreement does not, and the performance of this Agreement by the
    Company and the consummation of the Transactions will not,
    (i)&#160;conflict with or violate any provision of the
    Company&#146;s certificate of incorporation or bylaws or
    conflict with or violate any provision of the certificate of
    incorporation or bylaws or equivalent organization documents of
    any subsidiary of the Company, (ii)&#160;assuming that all
    consents, approvals, authorizations and other actions described
    in <U>Section&#160;3.06(b)</U> have been obtained and all
    filings and obligations described in <U>Section&#160;3.06(b)</U>
    have been made or complied with, conflict with or violate any
    foreign or domestic (federal, state or local) law, statute,
    ordinance, rule, regulation, permit, license, injunction, writ,
    judgment, decree or order (each, a &#147;<U>Law</U>&#148; and,
    collectively, &#147;<U>Laws</U>&#148;) applicable to the Company
    or any of its subsidiaries or by which any asset of the Company
    or any of its subsidiaries is bound or affected,
    (iii)&#160;except as set forth in the Company Disclosure
    Schedule, conflict with, result in any breach of or constitute a
    default (or an event that with notice or lapse of time or both
    would become a default) under, or give to others any right of
    termination, amendment, acceleration or cancellation of, or
    require any payment under, or give rise to a loss of any benefit
    to which the Company or any subsidiary of the Company is
    entitled under any provision of any contract, instrument,
    permit, concession, franchise, license, loan or credit
    agreement, note, bond, mortgage, indenture, lease or other
    property agreement, partnership or joint venture agreement or
    other legally binding agreement, whether oral or written,
    applicable to the Company or any such subsidiary or their
    respective properties or assets (each, a
    &#147;<U>Contract</U>&#148; and, collectively,
    &#147;<U>Contracts</U>&#148;) or (iv)&#160;result in the
    creation or imposition of a lien, claim, security interest or
    other charge, title imperfection or encumbrance (each, a
    &#147;<U>Lien</U>&#148; and, collectively,
    &#147;<U>Liens</U>&#148;) on any asset of the Company or any
    subsidiary of the Company, except in the case of
    clauses&#160;(ii), (iii)&#160;and (iv)&#160;of this
    <U>Section&#160;3.06(a)</U>, to the extent that any such
    conflict, violation, breach, default, right, loss or Lien would
    not, individually or in the aggregate, have a Company Material
    Adverse Effect.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (b)&#160;The execution and delivery by the Company of this
    Agreement does not, and the performance of this Agreement and
    the consummation by the Company of the Transactions will not,
    require any consent, approval, authorization or permit of, or
    filing with or notification to, any governmental or
    quasi-governmental agency, department, bureau, office,
    commission or other unit of the government of the United States
    of America or of any of its respective States or local units of
    government thereof, or of a foreign sovereign or of a
    provincial, regional or metropolitan government thereof
    (&#147;<U>Governmental Entity</U>&#148;), except (i)&#160;for
    applicable requirements, if any, of the Securities Exchange Act
    of 1934, as amended (the &#147;<U>Exchange Act</U>&#148;), the
    Securities Act of 1933, as amended (the &#147;<U>Securities
    Act</U>&#148;), the American Stock Exchange
    (&#147;<U>AmEx</U>&#148;), the
    <FONT style="white-space: nowrap">Hart-Scott-Rodino</FONT>
    Antitrust&#160;Improvements Act of 1976, as amended (the
    &#147;<U>HSR Act</U>&#148;) and the rules and regulations
    thereunder, any required filings pursuant to applicable foreign
    competition Laws and filing and recordation of appropriate
    documents for the Merger as required by the DGCL and
    (ii)&#160;where the failure to obtain such consents, approvals,
    authorizations or permits, or to make such filings or
    notifications, would not, individually or in the aggregate, have
    a Company Material Adverse Effect.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    A-8
</DIV><!-- END LOGICAL PAGE -->
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->
<A name='522'>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    3.07&#160;&#160;<I><U>SEC Reports and Financial
    Statements</U></I>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (a)&#160;The Company has filed all forms, reports, statements,
    schedules and other documents (the &#147;<U>SEC
    Reports</U>&#148;) with the Securities and Exchange Commission
    (the &#147;<U>SEC</U>&#148;) required to be filed by it pursuant
    to the federal securities laws and the SEC rules and regulations
    thereunder. The SEC Reports, as well as all forms, reports,
    statements, schedules and other documents to be filed by the
    Company with the SEC after the date hereof and prior to the
    Effective Time (the &#147;<U>Future SEC Reports</U>&#148;),
    (i)&#160;were and will be prepared in all material respects as
    to form in accordance with the requirements of the Securities
    Act, the Exchange Act and the published rules and regulations of
    the SEC thereunder, each as applicable to such SEC Reports and
    such later filed Future SEC Reports and (ii)&#160;did not and
    will not as of the time they were filed contain any untrue
    statement of a material fact or omit to state a material fact
    required to be stated therein or necessary in order to make the
    statements therein, in light of the circumstances under which
    they were and will be made, not misleading. No subsidiary of the
    Company is subject to the periodic reporting requirements of the
    Exchange Act. As of the date hereof, there are no material
    unresolved comments issued by the staff of the SEC with respect
    to any of the SEC Reports.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (b)&#160;Each of the consolidated financial statements
    (including, in each case, any notes thereto) of the Company
    included in the SEC Reports or any Future SEC Report has been,
    and in the case of any Future SEC Report will be, prepared in
    all material respects in accordance with the published rules and
    regulations of the SEC (including
    <FONT style="white-space: nowrap">Regulation&#160;S-X)</FONT>
    and in accordance with United States generally accepted
    accounting principles applied on a consistent basis throughout
    the periods indicated (except as otherwise stated in such
    financial statements, including the related notes) and each
    fairly presents, in all material respects, the consolidated
    financial position, results of operations and cash flows of the
    Company and its consolidated subsidiaries as at the respective
    dates thereof and for the respective periods indicated therein,
    except as otherwise set forth in the notes thereto (subject, in
    the case of unaudited statements, to normal and recurring
    year-end adjustments, none of which is material, individually or
    in the aggregate).
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (c)&#160;The management of the Company (i)&#160;maintains
    disclosure controls and procedures and internal control over
    financial reporting required by
    <FONT style="white-space: nowrap">Rule&#160;13a-15</FONT>
    under the Exchange Act to ensure that material information
    relating to the Company, including its consolidated
    subsidiaries, is made known to the management of the Company by
    others within those entities, and (ii)&#160;has disclosed, based
    on its most recent evaluation, to the Company&#146;s auditors
    and the audit committee of the Company Board (A)&#160;all
    significant deficiencies in the design or operation of internal
    controls which could adversely affect the Company&#146;s ability
    to record, process, summarize and report financial data and have
    identified for the Company&#146;s auditors any material
    weaknesses in internal controls and (B)&#160;any fraud, whether
    or not material, that involves management or other employees who
    have a significant role in the Company&#146;s internal controls.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (d)&#160;As of the date of the most recent unaudited financial
    statements of the Company included in the SEC Reports, neither
    the Company nor any of its subsidiaries had, and since such date
    neither the Company nor any of its subsidiaries has incurred,
    any liabilities or obligations of any nature (whether accrued,
    absolute, contingent, determinable or otherwise), except
    (i)&#160;liabilities and obligations set forth on the face of
    the balance sheet included in the most recent audited financial
    statements of the Company included in the SEC Reports,
    (ii)&#160;liabilities and obligations incurred in the ordinary
    and usual course of business and consistent with past practice,
    (iii)&#160;liabilities and obligations for expenses incurred in
    connection with the Transactions which are permitted pursuant to
    <U>Section&#160;5.01</U> of this Agreement or
    (iv)&#160;liabilities and obligations that would not reasonably
    be expected to have, individually or in the aggregate, a Company
    Material Adverse Effect.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (e)&#160;Except as disclosed in the SEC Reports or as otherwise
    disclosed in the Company Disclosure Schedule, none of the
    Company or any of its subsidiaries is indebted to any director
    or officer of the Company or any director or officer of its
    subsidiaries (except for amounts due as normal salaries and
    bonuses or in reimbursement of ordinary business expenses and
    directors&#146; fees) and no such person is indebted to the
    Company or any of its subsidiaries, and there have been no other
    transactions of the type required to be disclosed pursuant to
    Items&#160;402 or 404 of
    <FONT style="white-space: nowrap">Regulation&#160;S-K</FONT>
    promulgated by the SEC.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (f)&#160;There are no amendments or modifications which have not
    yet been filed with the SEC to SEC Reports which previously have
    been filed by the Company with the SEC pursuant to the
    Securities Act and the rules and regulations promulgated
    thereunder or the Exchange Act and the rules and regulations
    promulgated thereunder.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    A-9
</DIV><!-- END LOGICAL PAGE -->
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->
<A name='523'>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    3.08&#160;&#160;<I><U>Compliance with Applicable Laws</U></I>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Except as set forth on the Company Disclosure Schedule, to the
    knowledge of the Company, (i)&#160;neither the Company nor any
    of its subsidiaries is in material violation of any Order (as
    defined in <U>Section&#160;6.01(b)</U>) of any Governmental
    Entity or any Law of any Governmental Entity applicable to the
    Company or any subsidiary of the Company or any of their
    respective properties or assets and (ii)&#160;the business
    operations of the Company and its subsidiaries have been
    conducted in material compliance with all Laws of each
    Governmental Entity.
</DIV>
<A name='524'>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    3.09&#160;&#160;<I><U>Absence of Certain Changes or
    Events</U></I>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Except as set forth in the Company Disclosure Schedule or as
    contemplated by this Agreement or as disclosed in the SEC
    Reports filed on or prior to the date hereof, since
    September&#160;30, 2006 or such other date as may be specified
    below, the Company and its subsidiaries have conducted their
    businesses only in the ordinary course of business and in a
    manner consistent with past practice and there has not been:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (a)&#160;any change in any method of accounting or accounting
    practice by the Company or any of its subsidiaries, except for
    any such change required by reason of a concurrent change in
    United States generally accepted accounting principles;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (b)&#160;any revaluation by the Company or any of its
    subsidiaries of a material asset (including, without limitation,
    any writing down of the value of inventory or writing-off of
    notes or accounts receivable);
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (c)&#160;any transaction or commitment made, or any contract or
    agreement entered into, by the Company or any of its
    subsidiaries relating to its assets or business (including,
    without limitation, the acquisition, disposition, leasing or
    licensing of any tangible or intangible assets) or any
    relinquishment by the Company or any of its subsidiaries of any
    contract or other right, in either case, material to the Company
    and its subsidiaries taken as a whole, other than transactions
    and commitments in the ordinary course of business consistent
    with past practice and those contemplated by this Agreement;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (d)&#160;any declaration, setting aside or payment of any
    dividend (whether in cash, stock or property) or other
    distribution in respect of the Company&#146;s capital stock or
    any redemption, purchase or other acquisition of any of the
    Company&#146;s securities (other than (A)&#160;regular quarterly
    dividends paid by the Company to stockholders prior to the date
    of this Agreement and (B)&#160;dividends declared or paid by any
    subsidiary to the Company or by the Company to any subsidiary);
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (e)&#160;any split, combination or reclassification of any of
    the Company&#146;s capital stock or any issuance or the
    authorization of any issuance of any other securities in respect
    of, in lieu of or in substitution for shares of its capital
    stock;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (f)&#160;any amendment of any material term of any outstanding
    security of the Company or any of its subsidiaries;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (g)&#160;any issuance by the Company or any of its subsidiaries
    of any notes, bonds or other debt securities or any capital
    stock or other equity securities or any securities convertible,
    exchangeable or exercisable into any capital stock or other
    equity securities, except for the issuance of any Common Shares
    pursuant to the exercise of any Options in existence prior to
    the date hereof;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (h)&#160;any incurrence, assumption or guarantee by the Company
    or any of its subsidiaries of any indebtedness for borrowed
    money other than in the ordinary course of business and in
    amounts and on terms consistent with past practices;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (i)&#160;any creation or assumption by the Company or any of its
    subsidiaries of any Lien on any material asset(s) (alone or in
    the aggregate) other than in the ordinary course of business
    consistent with past practice;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (j)&#160;any making of any loan, advance or capital
    contributions to or investment in any entity or person other
    than loans, advances or capital contributions to or investments
    in wholly-owned subsidiaries made in the ordinary course of
    business consistent with past practice;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (k)&#160;since December&#160;31, 2005, any event, change,
    circumstance or state of facts that has had or is reasonably
    likely to have a Company Material Adverse Effect;
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    A-10
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (l)&#160;any material increase in the benefits under, or the
    establishment, material amendment or termination of, any Benefit
    Plan (as defined in <U>Section&#160;3.13(b)</U>) covering
    current or former employees, officers or directors of the
    Company or any of its subsidiaries, or any material increase in
    the compensation payable or to become payable to or any other
    material change in the employment terms for any current or
    former directors or officers of the Company or any of its
    subsidiaries or any other current or former employee earning
    noncontingent cash compensation in excess of $150,000&#160;per
    year;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (m)&#160;any entry by the Company or any of its subsidiaries
    into any employment, consulting, severance, termination or
    indemnification agreement with any current or former director or
    officer of the Company or any of its subsidiaries or entry into
    any such agreement with any person for a noncontingent cash
    amount in excess of $150,000&#160;per year or outside the
    ordinary course of business consistent with past practice;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (n)&#160;any labor dispute, other than routine individual
    grievances, or any activity or proceeding by a labor union or
    representative thereof to organize any employees of the Company
    or any of its subsidiaries, which employees were not subject to
    a collective bargaining agreement at September&#160;30, 2006 or
    any lockouts, strikes, slowdowns, work stoppages or threats
    thereof by or with respect to such employees;&#160;or
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (o)&#160;any authorization of, or agreement by the Company or
    any of its subsidiaries to take, any of the actions described in
    this <U>Section&#160;3.09</U>, except as expressly contemplated
    by this Agreement.
</DIV>
<A name='525'>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    3.10&#160;&#160;<I><U>Change of Control</U></I>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Except as set forth in the Company Disclosure Schedule, the
    Transactions will not constitute a &#147;change of control&#148;
    under, require the consent from or the giving of notice to a
    third party pursuant to, permit a third party to terminate or
    accelerate vesting or repurchase rights, or create any other
    detriment under the terms, conditions or provisions of any
    Contract or obligation to which the Company or any of its
    subsidiaries is a party or by which any of them or any of their
    properties or assets may be bound. The Company Disclosure
    Schedule sets forth the amount of any compensation or
    remuneration of any kind or nature which is or may become
    payable to any current or former employee, officer or director
    of the Company or any of its subsidiaries, in whole or in part,
    by reason of the execution and delivery of this Agreement or the
    consummation of the Transactions (the &#147;<U>Change of Control
    Payments</U>&#148;).
</DIV>
<A name='526'>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    3.11&#160;&#160;<I><U>Litigation</U></I>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Except as set forth in the Company Disclosure Schedule, there is
    no suit, claim, action, proceeding or investigation pending or,
    to the knowledge of the Company, threatened against the Company
    or any of its subsidiaries, at law or in equity. Except as set
    forth in the Company Disclosure Schedule, neither the Company
    nor any of its subsidiaries is subject to any outstanding order,
    writ, injunction or decree.
</DIV>
<A name='527'>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    3.12&#160;&#160;<I><U>Information in Proxy Statement</U></I>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (a)&#160;Each document required to be filed by the Company with
    the SEC in connection with the Transactions (the
    &#147;<U>Company Disclosure Documents</U>&#148;), including,
    without limitation, the proxy or information statement of the
    Company containing information required by Regulation&#160;14A
    under the Exchange Act, and, if applicable,
    <FONT style="white-space: nowrap">Rule&#160;13e-3</FONT>
    and
    <FONT style="white-space: nowrap">Schedule&#160;13E-3</FONT>
    under the Exchange Act (together with all amendments and
    supplements thereto, the &#147;<U>Proxy Statement</U>&#148;), to
    be filed with the SEC in connection with the Merger, will, when
    filed, comply as to form in all material respects with the
    applicable requirements of the Exchange Act. The representations
    and warranties contained in this <U>Section&#160;3.12(a)</U>
    will not apply to statements or omissions included in the
    Company Disclosure Documents based upon information furnished to
    the Company in writing by Merger Sub or Parent specifically for
    use therein.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (b)&#160;At the time the Proxy Statement or any amendment or
    supplement thereto is first mailed to shareholders of the
    Company and at the time such shareholders vote on adoption of
    this Agreement, the Proxy Statement, as supplemented or amended,
    if applicable, will not contain any untrue statement of a
    material fact or omit to state any material fact necessary in
    order to make the statements made therein, in the light of the
    circumstances under which they were made, not misleading. At the
    time of the filing of any Company Disclosure Document other than
    the Proxy Statement and at the time of any distribution thereof,
    such Company Disclosure Document will not contain any untrue
    statement of a material fact or omit to state a material fact
    necessary in order to make the statements
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    A-11
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    made therein, in the light of the circumstances under which they
    were made, not misleading. The representations and warranties
    contained in this <U>Section&#160;3.12(b)</U> will not apply to
    statements or omissions included in the Company Disclosure
    Documents based upon information furnished to the Company in
    writing by Merger Sub or Parent specifically for use therein.
</DIV>
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    3.13&#160;&#160;<I><U>Benefit Plans</U></I>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (a)&#160;Except as disclosed in the Company Disclosure Schedule
    or as expressly contemplated by this Agreement, there exist no
    employment, consulting, severance or termination agreements,
    arrangements or understandings between the Company or any of its
    subsidiaries and any individual current or former employee,
    officer or director of the Company or any of its subsidiaries
    with respect to which the annual cash, noncontingent payments
    thereunder exceed $100,000 or where the contingent and
    noncontingent annual compensation is reasonably likely to exceed
    $150,000.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (b)&#160;The Company Disclosure Schedule contains a complete
    list of all (i)&#160;&#147;employee pension benefit plans&#148;
    (as defined in Section&#160;3(2) of the Employee Retirement
    Income Security Act of 1974, as amended
    (&#147;<U>ERISA</U>&#148;)) (collectively, the &#147;<U>Pension
    Plans</U>&#148;), including any such Pension Plans that are
    &#147;multiemployer plans&#148; (as such term is defined in
    Section&#160;4001(a)(3) of ERISA) (collectively, the
    &#147;<U>Multiemployer Pension Plans</U>&#148;),
    (ii)&#160;&#147;employee welfare benefit plans&#148; (as defined
    in Section&#160;3(1) of ERISA) and all other benefit plans and
    (iii)&#160;other bonus, deferred compensation, severance pay,
    pension, profit-sharing, retirement, insurance, stock purchase,
    stock option, or other fringe benefit plan, arrangement or
    practice maintained, or contributed to, by the Company or any of
    its subsidiaries for the benefit of any current or former
    employees, officers or directors of the Company or any of its
    subsidiaries or with respect to which the Company has any
    liability (collectively, the &#147;<U>Benefit Plans</U>&#148;).
    Concurrently with the delivery of the Deferred Schedules, the
    Company shall deliver or make available to Merger Sub correct
    and complete copies of (i)&#160;each Benefit Plan, (ii)&#160;the
    three most recent annual reports on Form&#160;5500 filed with
    the Internal Revenue Service with respect to each Benefit Plan,
    (iii)&#160;the most recent summary plan description for each
    Benefit Plan for which such summary plan description is required
    and (iv)&#160;each trust agreement and group annuity contract
    relating to any Benefit Plan.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (c)&#160;Except as disclosed in the Company Disclosure Schedule,
    all Pension Plans intended to be qualified plans have been the
    subject of favorable determination letters from the Internal
    Revenue Service to the effect that such Pension Plans are
    qualified and exempt from Federal income taxes under
    Section&#160;401(a) and 501(a), respectively, of the Code
    (taking into account the Laws commonly referred to as
    &#147;GUST&#148;), and no such determination letter has been
    revoked. To the knowledge of the Company, there is no reasonable
    basis for the revocation of any such determination letter.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (d)&#160;None of the Benefit Plans is, and none of the Company
    or any of its subsidiaries has ever maintained or had an
    obligation to contribute to (i)&#160;a &#147;single employer
    plan&#148; (as such term is defined in Section&#160;4001(a)(15)
    of ERISA) subject to Section&#160;412 of the Code or
    Title&#160;IV of ERISA, (ii)&#160;a &#147;multiple employer
    plan&#148; (as such term is defined in ERISA) or (iii)&#160;a
    funded welfare benefit plan (as such term is defined in
    Section&#160;419 of the Code). There are no unpaid
    contributions, premiums or other payments due prior to the date
    hereof with respect to any Benefit Plan that are required to
    have been made under the terms of such Benefit Plan, any related
    insurance contract or any applicable Law. None of the Company or
    any of its subsidiaries has incurred any liability or taken any
    action, and the Company does not have any knowledge of, any
    action or event that could reasonably be expected to cause any
    one of them to incur any liability (i)&#160;under
    Section&#160;412 of the Code or Title&#160;IV of ERISA with
    respect to any &#147;single-employer plan&#148; (as such term is
    defined in Section&#160;4001(a)(15) of ERISA), (ii)&#160;on
    account of a partial or complete withdrawal (as such term is
    defined in Sections&#160;4203 and 4205 of ERISA, respectively)
    with respect to any Multiemployer Pension Plan, or (iii)&#160;on
    account of unpaid contributions to any Multiemployer Pension
    Plan. Except as disclosed in the SEC Reports filed on or prior
    to the date hereof, neither the Company nor any of its
    subsidiaries has any unfunded liabilities with respect to any
    deferred compensation, retirement or other Benefit Plan.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (e)&#160;To the knowledge of the Company, none of the Company
    nor any of its subsidiaries has engaged in a &#147;prohibited
    transaction&#148; (as such term is defined in Section&#160;406
    of ERISA and Section&#160;4975 of the Code) or any other breach
    of fiduciary responsibility with respect to any Benefit Plan
    subject to ERISA that reasonably could be expected to subject
    the Company or any of its subsidiaries to (i)&#160;any material
    tax or penalty on prohibited transactions imposed by
    Section&#160;4975 or (ii)&#160;any liability under
    Section&#160;502(i) or Section&#160;502(l) of ERISA. As of the
</DIV>

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    <BR>
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    date of this Agreement, except as disclosed in the Company
    Disclosure Schedule, with respect to any Benefit Plan:
    (i)&#160;no filing, application or other matter is pending with
    the Internal Revenue Service, the Pension Benefit Guaranty
    Corporation, the United States Department of Labor or any other
    governmental body and (ii)&#160;there is no action, suit or
    claim pending, other than routine claims for benefits.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (f)&#160;Except as disclosed in the Company Disclosure Schedule,
    none of the Company or any of its subsidiaries has any
    obligation to provide any health benefits or other non-pension
    benefits to retired or other former employees, except as
    specifically required by Part&#160;6 of Title&#160;I of ERISA
    (&#147;<U>COBRA</U>&#148;).
</DIV>
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    3.14&#160;&#160;<I><U>Taxes</U></I>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (a)&#160;Except as set forth in the Company Disclosure Schedule:
    (i)&#160;the Company and each of its subsidiaries has timely
    filed all federal, state, local and foreign income Tax Returns
    (as hereinafter defined) required to be filed by it, and all
    other material Tax Returns required to be filed by it, and each
    such Tax Return has been prepared in compliance in all material
    respects with all applicable Laws and is true and correct in all
    material respects; (ii)&#160;the Company and each of its
    subsidiaries has paid (or the Company has paid on behalf of its
    subsidiaries) all material Taxes (as hereinafter defined)
    required to be paid in respect of the periods covered by such
    returns and has made adequate provision in the Company&#146;s
    financial statements for payment of all Taxes that have not been
    paid, whether or not shown as due and payable on any Tax Return,
    in respect of all taxable periods or portions thereof ending on
    or before the date hereof; and (iii)&#160;neither the Company
    nor any of its subsidiaries has incurred any material liability
    for Taxes subsequent to the date of the most recent financial
    statements contained in the SEC Reports other than in the
    ordinary course of the Company&#146;s or such subsidiary&#146;s
    business.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (b)&#160;Except as set forth in the Company Disclosure Schedule:
    (i)&#160;no Tax Return of the Company or any of its subsidiaries
    is under audit or examination by any taxing authority, and no
    written notice of such an audit or examination or any other
    audit or examination with respect to Taxes has been received by
    the Company or any of its subsidiaries; (ii)&#160;each
    deficiency resulting from any audit or examination relating to
    Taxes by any taxing authority has been paid, except for
    deficiencies currently being contested in good faith and for
    which adequate reserves, as applicable, have been established in
    the Company&#146;s financial statements in accordance with
    United States generally accepted accounting principles;
    (iii)&#160;there are no Liens for Taxes upon the assets of the
    Company or any of its subsidiaries, except statutory Liens
    arising by operation of law relating to current Taxes not yet
    due and payable; (iv)&#160;all Taxes which the Company or any of
    its subsidiaries are required by Law to withhold or to collect
    for payment have been duly withheld and collected; (v)&#160;none
    of the Company or any of its subsidiaries has consented to
    extend the time in which any Tax may be assessed or collected by
    any taxing authority; and (vi)&#160;to the knowledge of the
    Company, no written claim has been made by any taxing authority
    in a jurisdiction where the Company and its subsidiaries do not
    file Tax Returns that the Company or any of its subsidiaries is
    or may be subject to taxation in that jurisdiction.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (c)&#160;Except as set forth in <U>Section&#160;3.10</U> of the
    Company Disclosure Schedule, there is no Contract or other
    arrangement, plan or agreement by or with the Company or any of
    its subsidiaries covering any person that, individually or
    collectively, could give rise to the payment of any amount by
    the Company or any of its subsidiaries that would not be
    deductible by the Company or such subsidiary by reason of
    Sections&#160;280G or 162(m) of the Code (or any corresponding
    provision of state, local or foreign Law).
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (d)&#160;Concurrently with the delivery of the Deferred
    Schedules, each of the Company and its subsidiaries will make
    available to Parent true, correct and complete copies of all
    examination reports and statements of deficiencies assessed
    against or agreed to by any of the Company or any of its
    subsidiaries that have been filed by or submitted to any of the
    Company or any of its subsidiaries for all taxable years not
    barred by the statute of limitations.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (e)&#160;Except as set forth in the Company Disclosure Schedule,
    none of the Company or any of its subsidiaries (i)&#160;has been
    a member of an affiliated group filing a consolidated federal
    income Tax Return (other than a group the common parent of which
    was the Company), (ii)&#160;is a party to or bound by any Tax
    allocation or Tax sharing agreement with any persons or entity
    other than the Company and its subsidiaries, (iii)&#160;has any
    liability for the Taxes of any Person (other than any of the
    Company or any of its subsidiaries) under Treas. Reg.
    &#167;&#160;1.1502-6 (or any similar provision of state, local
    or foreign Law), as a transferee or successor, by contract, or
    otherwise or (iv)&#160;has any material liability for the Taxes
    of any Person (other than the Company or the subsidiaries of the
    Company) or in
</DIV>

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    <BR>
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    connection with the acquisition, directly or indirectly, of any
    Person acquired by the Company or any of its subsidiaries.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (f)&#160;Except as set forth in the Company Disclosure Schedule,
    none of the Company or any of its subsidiaries will be required
    to include any item of income in, or exclude any item of
    deduction from, taxable income for any taxable period (or
    portion thereof) ending after the Closing Date as a result of
    any (i)&#160;change in method of accounting for a taxable period
    ending on or prior to the Closing Date under Code
    Section&#160;481(c) (or any corresponding or similar provision
    of state, local or foreign income Tax Law);
    (ii)&#160;&#147;closing statement&#148; as described in Code
    Section&#160;7121 (or any corresponding or similar provision of
    state, local or foreign income Tax Law); (iii)&#160;deferred
    intercompany gain or any excess loss account described in
    Treasury Regulations under Code Section&#160;1502 (or any
    corresponding or similar provision of state, local or foreign
    income Tax Law); (iv)&#160;installment sale made prior to the
    Closing Date; or (v)&#160;prepaid amount received on or prior to
    the Closing Date.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (g)&#160;None of the Company or any of its subsidiaries has been
    a U.S.&#160;real property holding corporation within the meaning
    of Section&#160;897(c)(2) of the Code during the applicable
    period specified in Section&#160;(897)(c)(1)(A)(ii) of the Code.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (h)&#160;As used in this <U>Section&#160;3.14</U>, the terms
    (i)&#160;&#147;<U>Tax</U>&#148; (and, with correlative meaning,
    &#147;<U>Taxes</U>&#148;) means: (A)&#160;any federal, state,
    local or foreign net income, gross income, gross receipts,
    windfall profit, severance, property, production, sales, use,
    license, excise, franchise, employment, payroll, withholding,
    alternative or add-on minimum, ad valorem, value added,
    transfer, stamp or environmental tax, or any other tax of any
    kind whatsoever, together with any interest or penalty, addition
    to tax or additional amount imposed by any Governmental Entity
    and (B)&#160;any liability of the Company or any of its
    subsidiaries for payments of a type described in
    clause&#160;(A)&#160;as a result of (I)&#160;any obligation of
    the Company or any of its subsidiaries under any tax sharing
    agreement or tax indemnity agreement or (II)&#160;the Company or
    any of its subsidiaries being a member of an affiliated group
    (other than one of which the Company is the parent); and
    (ii)&#160;&#147;<U>Tax Return</U>&#148; means any report, return
    or other information or document required to be supplied to or
    filed with a taxing authority in connection with Taxes.
</DIV>
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    3.15&#160;&#160;<I><U>Intellectual Property</U></I>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (a)&#160;Except as set forth in the Company Disclosure Schedule,
    the Company and each of its subsidiaries own and possess, free
    and clear of any Liens, or have a valid and enforceable license
    to use, all material Intellectual Property (as defined below)
    necessary for the operation of their respective businesses as
    currently conducted. As used in this Agreement, the term
    &#147;<U>Intellectual Property</U>&#148; means:
    (i)&#160;registered and unregistered trademarks, service marks,
    slogans, trade names, corporate domain names, logos and trade
    dress (including the good will associated with each);
    (ii)&#160;patents, patent applications and invention
    disclosures; (iii)&#160;registered and unregistered copyrights,
    copyrightable works and mask works, including, but not limited
    to, copyrights in software and databases; (iv)&#160;computer
    software (including source code, object code, data, databases
    and related documentation); and (v)&#160;inventions (whether
    patentable or unpatentable and whether or not reduced to
    practice), improvements thereto, methods, devices, technology,
    trade secrets, proprietary information, know-how,
    specifications, flowcharts, blueprints, schematics, protocols,
    programmer notes, customer and supplier lists, pricing and cost
    information, business and marketing plans and proposals and all
    other intellectual property rights of any kind or nature.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (b)&#160;The Company Disclosure Schedule sets forth a complete
    list of all: (i)&#160;patented and registered Intellectual
    Property, and pending patent applications or applications for
    registration of Intellectual Property, owned or filed by the
    Company or any of its subsidiaries; (ii)&#160;all trade names,
    domain names and material unregistered trademarks, service marks
    and copyrights owned or used by the Company or any of its
    subsidiaries; and (iii)&#160;all agreements pursuant to which
    the Company or any of its subsidiaries has obtained or granted
    the right to use any Intellectual Property (other than licenses
    of mass-marketed software acquired or licensed for a license fee
    of less than $100,000&#160;per annum) (the items listed in this
    clause&#160;(iii) being collectively referred to herein as
    &#147;<U>License Agreements</U>&#148;). Except as noted in the
    Company Disclosure Schedule, the Company and its subsidiaries
    own and possess all right, title and interest in and to the
    items listed in clauses&#160;(i) and (ii)&#160;of the preceding
    sentence.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (c)&#160;To the Company&#146;s knowledge, neither the Company
    nor any of its subsidiaries has infringed, misappropriated or
    otherwise conflicted with and the operation of the
    Company&#146;s and its subsidiaries&#146; businesses as
    currently conducted, does not infringe, misappropriate or
    otherwise conflict with the Intellectual Property rights of
    others,
</DIV>

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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    and except as set forth in the Company Disclosure Schedule,
    neither the Company nor any of its subsidiaries has received any
    notice of infringement or misappropriation of or conflict with
    asserted Intellectual Property rights of others. Except as set
    forth in the Company Disclosure Schedule, no claim by any third
    party contesting the validity, enforceability, use or ownership
    of any of the material Intellectual Property owned or used by
    the Company or any of its subsidiaries is currently outstanding
    or, to the knowledge of the Company, is threatened. To the
    knowledge of the Company, the material Intellectual Property
    owned by the Company or any of its subsidiaries has not been
    infringed or misappropriated by other Persons. All of the
    material Intellectual Property owned or used by the Company or
    any of its subsidiaries as of the date hereof will be owned or
    available for use by the Company or such subsidiary on identical
    terms and conditions immediately subsequent to the Closing. The
    Company and each of its subsidiaries has taken all reasonable
    and necessary actions to maintain and protect its material
    Intellectual Property.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (d)&#160;Neither the Company nor any of its subsidiaries have
    done anything to compromise the secrecy, confidentiality,
    validity, enforceability, ownership or value of any of the
    material Intellectual Property required to conduct their
    respective businesses. To the knowledge of the Company, no prior
    or current employee, officer or consultant of the Company or any
    of its subsidiaries has asserted any ownership interest in any
    material Intellectual Property used by the Company or its
    subsidiaries in the operation of their respective businesses.
</DIV>
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    3.16&#160;&#160;<I><U>Licenses and Permits</U></I>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Company and its subsidiaries are in possession of all
    material franchises, grants, authorizations, licenses, permits,
    easements, variances, exceptions, consents, certificates,
    approvals and orders of any Governmental Entity
    (&#147;<U>Permits</U>&#148;) necessary for the Company and its
    subsidiaries to own, lease and operate its properties or to
    carry on its business as it is now being conducted except where
    the failure to be in the possession of any Permit would not,
    individually or in the aggregate, have a Company Material
    Adverse Effect. As of the date hereof, all of the Permits are in
    full force and effect and no violation, suspension or
    cancellation of any of the Permits is pending or, to the
    knowledge of the Company, threatened. Except as disclosed in the
    Company Disclosure Schedule<B>, </B>none of the Permits will be
    terminated or impaired or become terminable, in whole or in
    part, as a result of the Transactions, except for any such
    termination or impairment that, individually or in the
    aggregate, would not reasonably be expected to have a Company
    Material Adverse Effect.
</DIV>
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<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    3.17&#160;&#160;<I><U>Material Contracts</U></I>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (a)&#160;The Company Disclosure Schedule sets forth a list (as
    of the date of this Agreement) of (i)&#160;each Contract which
    is likely to involve payment or receipt of annual consideration
    of more than $250,000, in the aggregate, over the remaining term
    of such Contract (other than with respect to Contracts with the
    Company&#146;s merchandise suppliers for purchases of product in
    the ordinary course of business consistent with past practice),
    (ii)&#160;all Contracts or indentures relating to borrowed money
    or other indebtedness or the mortgaging, pledging or otherwise
    placing a Lien on any material asset or material group of assets
    of the Company or any of its subsidiaries, including the amount
    of funded indebtedness for borrowed money outstanding as of the
    date hereof under any such Contract or indenture, other than
    Contracts relating to indebtedness other than indebtedness for
    borrowed money in an amount not in excess of $250,000 in the
    aggregate for all such Contracts and other than indebtedness to
    the Company&#146;s merchandise suppliers for products purchased
    in the ordinary course of business, (iii)&#160;all joint venture
    or other similar agreements to which the Company or any of its
    subsidiaries is a party, (iv)&#160;all lease agreements to which
    the Company or any of its subsidiaries is a party with annual
    lease payments in excess of $100,000, (v)&#160;standby letter of
    credit obtained by the Company or any of its subsidiaries has in
    an amount in excess of $500,000 and Contracts under which the
    Company or any of its subsidiaries has advanced or loaned any
    other Person or entity an amount in excess of $100,000,
    (vi)&#160;Contracts or groups of related Contracts with the same
    party or group of parties requiring the payment or receipt of
    $100,000 or more per year which are not cancelable by the
    Company on 30&#160;days&#146; or less notice without premium or
    penalty or other cost of any kind or nature (other than with
    respect to Contracts with the Company&#146;s merchandise
    suppliers for purchases of product in the ordinary course of
    business consistent with past practice), (vii)&#160;warranty
    agreements with respect to the Company&#146;s or its
    subsidiaries&#146; services rendered or products sold or leased,
    other than pursuant to the Company&#146;s standard warranty,
    (viii)&#160;agreements under which the Company has granted any
    person or entity registration rights (including, without
    limitation, demand and piggy-back registration rights),
    (ix)&#160;agreements under which the Company or any of its
    subsidiaries has granted any right of first refusal or similar
    right in favor of any third party with respect to any material
    portion of the Company&#146;s or
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    A-15
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    any of its subsidiary&#146;s properties or assets and
    (x)&#160;Contracts containing non-compete covenants by the
    Company or any of its subsidiaries (the items described in
    clauses&#160;(i) through (x)&#160;hereof, collectively, the
    &#147;<U>Material Contracts</U>&#148;). The Company has made
    available to Parent a correct and complete copy of each Material
    Contract listed in <U>Section&#160;3.17(a)</U> of the Company
    Disclosure Schedule.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (b)&#160;Except as disclosed in the Company Disclosure Schedule,
    (i)&#160;neither the Company nor any of its subsidiaries, nor,
    to the Company&#146;s knowledge, any other party, is in default
    in the performance, observance or fulfillment of any of the
    obligations, covenants or conditions contained in any Material
    Contract or License Agreement (as defined in
    <U>Section&#160;3.15(b)</U>) to which it is a party and
    (ii)&#160;to the Company&#146;s knowledge, there has not
    occurred any event that, with the lapse of time or giving of
    notice or both, would constitute such a default. All Contracts
    to which the Company or any of its subsidiaries is a party, or
    by which any of their respective assets are bound, are valid and
    binding, in full force and effect and enforceable against the
    Company or any such subsidiary, as the case may be, and to the
    Company&#146;s knowledge, the other parties thereto in
    accordance with their respective terms, subject to applicable
    bankruptcy, insolvency, reorganization, moratorium or other
    similar Laws relating to creditors&#146; rights generally and to
    the general principles of equity.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (c)&#160;Except as set forth in the Company Disclosure Schedule,
    no Material Contract or License Agreement will, by its terms,
    terminate as a result of the Transactions or require any consent
    from any party thereto in order to remain in full force and
    effect immediately after the Effective Time.
</DIV>
<A name='533'>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    3.18&#160;&#160;<I><U>Environmental Laws</U></I>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Except as disclosed in the Company Disclosure Schedule:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (a)&#160;During the past five years, the Company and its
    subsidiaries have at all times complied and are in compliance,
    in all material respects, with all Environmental Laws, which
    compliance has included obtaining and complying at all times, in
    all material respects, with all Permits required pursuant to
    Environmental Laws for the occupation of their facilities and
    properties and the operation of their respective businesses.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (b)&#160;During the past five years, neither the Company nor any
    of its subsidiaries has received any notice, report or other
    information regarding any actual or alleged material violation
    of, or liability under, Environmental Laws with respect to their
    past or current operations, properties or facilities.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (c)&#160;None of the following exists at any property or
    facility owned or operated by the Company and its subsidiaries:
    (i)&#160;underground storage tanks;
    (ii)&#160;asbestos-containing material; (iii)&#160;materials or
    equipment containing polychlorinated biphenyls; or
    (iv)&#160;landfills, surface impoundments, or disposal areas.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (d)&#160;Neither the Company nor any of its subsidiaries have
    treated, stored, disposed of, arranged for or permitted the
    disposal of, transported, handled, released, or exposed any
    Person to, any substance, including any Hazardous Substance, or
    owned or operated any property or facility (and no such property
    or facility is contaminated by any Hazardous Substance so as to
    create a &#147;Recognized Environmental Condition&#148; under
    ASTM
    <FONT style="white-space: nowrap">1527-05)</FONT> so
    as to give rise to any current or future liability or corrective
    or remedial obligation under any Environmental Laws.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (e)&#160;Neither the Company nor any of its subsidiaries have
    assumed, provided an indemnity with respect to, or otherwise
    become subject to any material liabilities of any other Person
    under any Environmental Law.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (f)&#160;Concurrently with the delivery of the Deferred
    Schedules, the Company shall provide to Parent for review all
    environmental audits, reports and all other documentation
    materially bearing on environmental, health or safety
    liabilities, in each case relating to the past or current
    properties, facilities or operations of the Company, its
    subsidiaries, or predecessors, which are in its possession or
    under its reasonable control.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    &#147;<U>Environmental Laws</U>&#148; shall mean, whenever in
    effect, all Laws, all judicial and administrative orders and
    determinations, all contractual obligations and all common law
    concerning public health and safety, workplace health and
    safety, and pollution or protection of the environment.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    &#147;<U>Hazardous Substances</U>&#148; shall mean all
    materials, substances and wastes defined by or as to which
    liability or standards of conduct are imposed pursuant to
    Environmental Laws, including petroleum and any fraction
    thereof, asbestos, lead and polychlorinated biphenyls.
</DIV>

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    <BR>
    A-16
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->
<A name='534'>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    3.19&#160;&#160;<I><U>Opinion of Financial Advisor</U></I>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Company received the written opinion of Stephens, Inc. to
    the effect that, as of the date hereof and based upon and
    subject to the factors and assumptions set forth therein, the
    consideration to be received by the holders of Common Shares,
    pursuant to the Merger is fair to the Company&#146;s
    shareholders from a financial point of view. The Company will
    deliver a copy of such opinion to Parent promptly following
    receipt thereof by the Company.
</DIV>
<A name='535'>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    3.20&#160;&#160;<I><U>Brokers</U></I>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Except as set forth in the Company Disclosure Schedule, none of
    the Company, any of its subsidiaries, or any of their respective
    officers, directors or employees has employed any broker, finder
    or investment banker or incurred any liability for any brokerage
    fees, commissions or finder&#146;s fees in connection with the
    Transactions.
</DIV>
<A name='536'>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    3.21&#160;&#160;<I><U>Required Shareholder Vote</U></I>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The adoption of this Agreement at the Shareholders Meeting (as
    defined in <U>Section&#160;5.02</U>) by the holders of a
    majority of the issued and outstanding Common Shares entitled to
    vote at the Shareholders Meeting (the &#147;<U>Shareholders
    Approval</U>&#148;) is the only vote of the holders of any class
    or series of the Company&#146;s securities necessary to adopt
    and approve this Agreement, the Merger and the other
    Transactions.
</DIV>
<A name='537'>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    3.22&#160;&#160;<I><U>Related Party Transactions</U></I>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Except as set forth in the Company Disclosure Schedule or
    otherwise disclosed in the SEC Reports, no director, officer,
    partner, &#147;affiliate&#148; or &#147;associate&#148; (as such
    terms are defined in
    <FONT style="white-space: nowrap">Rule&#160;12b-2</FONT>
    under the Exchange Act) of the Company or any of its
    subsidiaries (or, with respect to clause&#160;(a) of this
    sentence, to the knowledge of the Company, its employees):
    (a)&#160;has borrowed any monies from or has outstanding any
    indebtedness or other similar obligations to the Company or any
    of its subsidiaries; (b)&#160;owns any direct or indirect
    interest of any kind in, or is a director, officer, employee,
    partner, affiliate or associate of, or consultant or lender to,
    or borrower from, or has the right to participate in the
    management, operations or profits of, any person or entity which
    is (i)&#160;a competitor, supplier, customer, distributor,
    lessor, tenant, creditor or debtor of the Company or any of its
    subsidiaries, (ii)&#160;engaged in a business related to the
    business of the Company or any of its subsidiaries,
    (iii)&#160;participating in any transaction to which the Company
    or any of its subsidiaries is a party or (iv)&#160;otherwise a
    party to any contract, arrangement or understanding with the
    Company or any of its subsidiaries.
</DIV>
<A name='538'>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    3.23&#160;&#160;<I><U>Properties and Assets</U></I>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    To the knowledge of the Company, the Company and its
    subsidiaries have good and valid title to, or, in the case of
    leased properties and assets, valid leasehold interests in, all
    of their tangible properties and assets, real and personal, used
    or held for use in their businesses located on their premises or
    shown on the consolidated balance sheet of the Company and its
    subsidiaries as of September&#160;30, 2006 or acquired
    thereafter, free and clear of any Liens, except (i)&#160;as set
    forth in the Company Disclosure Schedule, (ii)&#160;Liens for
    taxes not yet due and payable for which adequate reserves, as
    applicable, have been established in the Company&#146;s
    financial statements in accordance with United States generally
    accepted accounting principles, and (iii)&#160;Liens which do
    not, individually or in the aggregate, materially interfere with
    or materially impair the conduct of the business of the Company
    or any of its subsidiaries. Neither the Company nor any of its
    subsidiaries owns any real property, except as set forth in the
    Company Disclosure Schedule. The real property listed in the
    Company Disclosure Schedule constitutes all of the real property
    owned, used or occupied by the Company or any of its
    subsidiaries as of the date hereof. The Company&#146;s and each
    of its subsidiaries&#146; buildings, equipment and other
    tangible assets are in good operating condition (normal wear and
    tear excepted) and are fit for use in the ordinary course of
    their respective business in all material respects. All leases
    pursuant to which the Company or any of its subsidiaries lease
    from others material amounts of real property are in good
    standing, valid and effective in accordance with their
    respective terms, and there is not under any of such leases, any
    existing default or event of default (or event which with notice
    or lapse of time, or both, would constitute a default), except
    where the lack of such good standing, validity and effectiveness
    or the existence of such default or event of default would not
    reasonably be expected to have a Company Material Adverse Effect.
</DIV>

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    <BR>
    A-17
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->
<A name='539'>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    3.24&#160;&#160;<I><U>Labor Matters</U></I>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Except as set forth in the Company Disclosure Schedule,
    (a)&#160;there is no labor strike, dispute, slowdown, stoppage
    or lockout actually pending, or, to the knowledge of the
    Company, threatened against the Company or any of its
    subsidiaries, and during the past three years there has not been
    any such action, (b)&#160;to the knowledge of the Company, no
    union claims to represent the employees of the Company or any of
    its subsidiaries, (c)&#160;neither the Company nor any of its
    subsidiaries is a party to or bound by any collective bargaining
    or similar agreement with any labor organization, or work rules
    or practices agreed to with any labor organization or employee
    association applicable to employees of the Company or any of its
    subsidiaries, (d)&#160;none of the employees of the Company or
    any of its subsidiaries is represented by any labor organization
    and the Company does not have any knowledge of any current union
    organizing activities among the employees of the Company or any
    of its subsidiaries, nor is there a question concerning whether
    representation exists concerning such employees, (e)&#160;the
    Company and its subsidiaries are, and for the past three years
    have been, in material compliance with all applicable Laws
    respecting employment and employment practices, terms and
    conditions of employment, wages, hours of work and occupational
    safety and health, and are not engaged in any unfair labor
    practices as defined in the National Labor Relations Act or
    other applicable Law, (f)&#160;there is no unfair labor practice
    charge or complaint against the Company or any of its
    subsidiaries pending or, to the knowledge of the Company,
    threatened before the National Labor Relations Board or any
    similar state or foreign agency, (g)&#160;there is no grievance
    arising out of any collective bargaining agreement or other
    grievance procedure, (h)&#160;no charges with respect to or
    relating to the Company or any of its subsidiaries are pending
    before the Equal Employment Opportunity Commission or any other
    agency responsible for the prevention of unlawful employment
    practices, (i)&#160;neither the Company nor any of its
    subsidiaries has received notice of the intent of any federal,
    state, local or foreign agency responsible for the enforcement
    of labor or employment Laws to conduct an investigation with
    respect to or relating to the Company or any of its subsidiaries
    and no such investigation is in progress and (j)&#160;there are
    no complaints, lawsuits or other proceedings pending or, to the
    knowledge of the Company, threatened in any forum by or on
    behalf of any present or former employee of the Company or any
    of its subsidiaries alleging breach of any express or implied
    contract of employment, any Law governing employment or the
    termination thereof or other discriminatory, wrongful or
    tortious conduct in connection with the employment relationship.
    To the knowledge of the Company, as of the date hereof, no
    executive officer or other key employee of the Company or any of
    its subsidiaries is subject to any noncompete, nonsolicitation,
    nondisclosure, confidentiality, employment, consulting or
    similar agreement relating to, affecting or in conflict with the
    present business activities of the Company and its subsidiaries,
    except agreements between the Company or any subsidiary of the
    Company and its present and former officers and employees.
</DIV>
<A name='540'>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    3.25&#160;&#160;<I><U>Insurance</U></I>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Except as set forth in the Company Disclosure Schedule, the
    Company and each of its subsidiaries have policies of insurance
    and bonds of the type and in amounts customarily carried by
    persons conducting businesses or owning assets similar to those
    of the Company and its subsidiaries. All premiums due and
    payable under all such policies and bonds have been paid and the
    Company and its subsidiaries are otherwise in compliance in all
    material respects with the terms of such policies and bonds.
    Except as set forth in the Company Disclosure Schedule, neither
    the Company nor any of its subsidiaries maintains any material
    self-insurance or co-insurance programs. Neither the Company nor
    any of its subsidiaries has any disputed claim or claims
    aggregating $100,000 or more with any insurance provider
    relating to any claim for insurance coverage under any policy or
    insurance maintained by the Company or any of its subsidiaries.
</DIV>
<A name='541'>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    3.26&#160;&#160;<I><U>[Intentionally omitted]</U></I>
</DIV>
</A>
<A name='542'>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    3.27&#160;&#160;<I><U>State Takeover Statutes</U></I>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The action of the Company Board in approving this Agreement and
    the Transactions provided for herein is sufficient to render the
    restrictions on &#147;business combinations&#148; (as defined in
    Section&#160;203 of the DGCL) as set forth in Section&#160;203
    of the DGCL inapplicable to this Agreement and the Transactions
    provided for herein.
</DIV>
<A name='543'>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    3.28&#160;&#160;<I><U>Rights Plan</U></I>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Board has amended any rights plan, &#147;poison pill&#148;
    or similar arrangement, if any, heretofore adopted by the
    Company so that (a)&#160;neither the execution, delivery or
    performance of this Agreement nor the consummation of the
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    A-18
</DIV><!-- END LOGICAL PAGE -->
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Transactions will cause the rights described therein to become
    exercisable, and (b)&#160;the rights described therein will
    expire immediately prior to the Effective Time without any
    payment being made or shares of the Company&#146;s capital stock
    being issued in respect thereof.
</DIV>
<A name='544'>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    3.29&#160;&#160;<I><U>Pre-Signing Activities</U></I>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Except as set forth in the Company Disclosure Schedule, during
    the period from January&#160;1, 2007 through and including the
    date of this Agreement, neither the Company nor any of its
    subsidiaries have taken any action, or omitted to take any
    action, which if taken subsequent to the date of this Agreement
    and prior to the Effective Time, would be prohibited by
    Section&#160;5.01 hereof (other than any such activity fully
    reflected in <U>Section&#160;3.03(a)</U>&#160;hereof).
</DIV>
<A name='545'>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    3.30&#160;&#160;<I><U>No Knowledge of Breach</U></I>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As of the date hereof, the Company does not have any knowledge
    of any act, omission or disclosure by Parent or Merger Sub to
    the Company that would constitute a breach of any of Parent and
    Merger Sub&#146;s representations and warranties under this
    Agreement.
</DIV>
<A name='546'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <FONT style="font-family: 'Times New Roman', Times">ARTICLE&#160;4
    </FONT>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <FONT style="font-family: 'Times New Roman', Times">REPRESENTATIONS
    AND WARRANTIES OF MERGER SUB AND PARENT
    </FONT>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Each of Merger Sub and Parent represents and warrants to the
    Company that:
</DIV>
<A name='547'>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    4.01&#160;&#160;<I><U>Organization and Qualification</U></I>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Each of Merger Sub and Parent is a corporation duly organized,
    validly existing and in good standing (to the extent such
    concept is relevant in such jurisdiction) under the laws of
    Delaware 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 now being conducted,
    except where the failure to be in good standing or to have such
    governmental approvals would not, individually or in the
    aggregate, have a Purchaser Material Adverse Effect (as defined
    below). Each of Merger Sub and Parent 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
    where the failure to be so qualified or licensed and in good
    standing would not, individually or in the aggregate, have a
    Purchaser Material Adverse Effect. As used in this Agreement,
    the term &#145;&#145;<U>Purchaser Material Adverse
    Effect</U>&#148; means any effect, circumstance, event or fact
    that prevents or materially delays the ability of Parent and
    Merger Sub to perform in all material respects their obligations
    under this Agreement or to consummate the Transactions in
    accordance with the terms hereof.
</DIV>
<A name='548'>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    4.02&#160;&#160;<I><U>Charter Documents and Bylaws</U></I>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Parent has heretofore furnished to the Company a complete and
    correct copy of the certificate of incorporation and bylaws of
    each of Parent and Merger Sub in full force and effect as of the
    date hereof. Neither Parent nor Merger Sub is in violation of
    any of the provisions of its certificate of incorporation or
    bylaws.
</DIV>
<A name='549'>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    4.03&#160;&#160;<I><U>Authority Relative to this
    Agreement</U></I>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Each of Merger Sub and Parent has the requisite corporate power
    and authority to execute and deliver this Agreement, to perform
    its obligations hereunder and to consummate the Transactions.
    The execution and delivery of this Agreement and the
    consummation of the Merger and the other Transactions have been
    duly and validly authorized by all necessary corporate action
    and no other corporate proceedings on the part of Merger Sub or
    Parent are necessary to authorize their execution and delivery
    of this Agreement or to consummate the Transactions (other than
    the filing and recordation of appropriate merger documents as
    required by the DGCL). This Agreement has been duly and validly
    executed and delivered by each of Merger Sub and Parent, and
    (assuming this Agreement constitutes a valid and binding
    obligation of the Company) constitutes the valid and binding
    obligations of each of Merger Sub and Parent, enforceable
    against them in accordance with its respective terms, subject to
    applicable bankruptcy, insolvency, reorganization, moratorium or
    other similar Laws relating to creditors&#146; rights generally
    and to general principles of equity.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    A-19
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->
<A name='550'>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    4.04&#160;&#160;<I><U>No Violation; Required Filings and
    Consents</U></I>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (a)&#160;The execution and delivery by each of Merger Sub and
    Parent of this Agreement does not, and the performance of this
    Agreement and the consummation by each of Merger Sub and Parent
    of the Transactions will not, (i)&#160;conflict with or violate
    any provision of Parent&#146;s certificate of incorporation or
    bylaws or conflict with or violate any provision of the
    certificate of incorporation or bylaws (or equivalent
    organizational documents) of any subsidiary of Parent (including
    Merger Sub), (ii)&#160;assuming that all consents, approvals,
    authorizations and other actions described in
    <U>Section&#160;4.04(b)</U> have been obtained and all filings
    and obligations described in <U>Section&#160;4.04(b)</U> have
    been made or complied with, conflict with or violate any Law
    applicable to Parent or any of its subsidiaries or by which any
    asset of Parent or any of its subsidiaries is bound or affected,
    (iii)&#160;conflict with, result in any breach of or constitute
    a default (or an event that with notice or lapse of time or both
    would become a default) under, or give to others any right of
    termination, amendment, acceleration or cancellation of, or
    require any payment under, or give rise to a loss of any benefit
    to which Parent or any subsidiary of Parent is entitled under
    any provision of any contract applicable to any of them or their
    respective properties or assets or (iv)&#160;result in the
    creation or imposition of a Lien on any asset of Parent or any
    of its subsidiaries, except in the case of clauses&#160;(ii),
    (iii)&#160;and (iv)&#160;of this <U>Section&#160;4.04(a)</U>, to
    the extent that any such conflict, violation, breach, default,
    right, loss or Lien would not, individually or in the aggregate,
    have a Purchaser Material Adverse Effect.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (b)&#160;The execution and delivery by each of Merger Sub and
    Parent of this Agreement does not, and the performance of this
    Agreement and the consummation by each of Merger Sub and Parent
    of the Transactions will not, require any consent, approval,
    authorization or permit of, or filing with or notification to,
    any Governmental Entity, except (i)&#160;for applicable
    requirements, if any, of the Exchange Act, the Securities Act,
    AmEx, the HSR Act and the rules and regulations thereunder, any
    filings required pursuant to applicable foreign competition laws
    and filing and recordation of appropriate documents for the
    Merger as required by the DGCL and (ii)&#160;where the failure
    to obtain such consents, approvals, authorizations or permits,
    or to make such filings or notifications, would not,
    individually or in the aggregate, have a Purchaser Material
    Adverse Effect.
</DIV>
<A name='551'>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    4.05&#160;&#160;<I><U>Litigation</U></I>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    There is no suit, claim, action, proceeding or investigation
    pending or, to the knowledge of Parent, threatened against
    Parent or any of its subsidiaries, at law or in equity, that,
    individually or in the aggregate, would reasonably be expected
    to have a Purchaser Material Adverse Effect. Neither Parent nor
    any of its subsidiaries is subject to any outstanding order,
    writ, injunction or decree that, individually or in the
    aggregate, would reasonably be expected to have a Purchaser
    Material Adverse Effect.
</DIV>
<A name='552'>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    4.06&#160;&#160;<I><U>Brokers</U></I>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    No broker, finder, financial adviser or investment banker is
    entitled to any brokerage, finder&#146;s or other fee or
    commission in connection with the transactions contemplated by
    this Agreement based upon arrangements made by, or on behalf of,
    Parent or any of its subsidiaries.
</DIV>
<A name='553'>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    4.07&#160;&#160;<I><U>Financial Capability</U></I>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Parent and Merger Sub have and will have as of the Closing
    sufficient funds available to them to make the deposit into the
    Payment Fund required by <U>Section&#160;2.03(a)</U> and pay any
    expenses incurred by Parent and Merger Sub in connection with
    the transactions contemplated by this Agreement. Parent and
    Merger Sub&#146;s ability to consummate the transactions
    contemplated by this Agreement is not contingent on raising any
    equity capital, obtaining financing therefor, consent of any
    lender or any other matter relating to funding payments under
    this Agreement.
</DIV>
<A name='554'>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    4.08&#160;&#160;<I><U>No Business Activities</U></I>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Merger Sub has not conducted any activities or operations other
    than in connection with its organization, the negotiation and
    execution of this Agreement and the consummation of the
    Transactions, and activities related thereto, including
    acquisition of the capital stock of the Company. Merger Sub does
    not have any subsidiaries.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    A-20
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->
<A name='555'>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    4.09&#160;&#160;<I><U>Information in Proxy Statement</U></I>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    At the time the Proxy Statement or any amendment or supplement
    thereto is first mailed to shareholders of the Company and at
    the time such shareholders vote on adoption of this Agreement,
    the information furnished to the Company in writing by Merger
    Sub or Parent or through their counsel specifically for use in
    the Proxy Statement, as supplemented or amended, if applicable,
    will not contain any untrue statement of a material fact or omit
    to state any material fact necessary in order to make the
    statements made therein, in the light of the circumstances under
    which they were made, not misleading. At the time of the filing
    of any Company Disclosure Document other than the Proxy
    Statement and at the time of any distribution thereof, the
    information furnished to the Company in writing by Merger Sub or
    Parent or through their counsel specifically for use in such
    Company Disclosure Document will not contain any untrue
    statement of a material fact or omit to state a material fact
    necessary in order to make the statements made therein, in the
    light of the circumstances under which they were made, not
    misleading.
</DIV>
<A name='556'>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    4.10&#160;&#160;<I><U>No Knowledge of Breach</U></I>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As of the date hereof, neither Parent nor Merger Sub has any
    knowledge of any act, omission or disclosure by the Company to
    Parent and Merger Sub that would constitute a breach of any of
    the Company&#146;s representations and warranties under this
    Agreement.
</DIV>
<A name='557'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <FONT style="font-family: 'Times New Roman', Times">ARTICLE&#160;5
    </FONT>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <FONT style="font-family: 'Times New Roman', Times">COVENANTS
    </FONT>
</DIV>
</A>
<A name='558'>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    5.01&#160;&#160;<I><U>Interim Operations</U></I>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (a)&#160;Except as (1)&#160;set forth in the Company Disclosure
    Schedule delivered to Parent as of the date hereof,
    (2)&#160;expressly contemplated or permitted by this Agreement,
    or (3)&#160;required by Law, during the period from the date of
    this Agreement to the earlier of the Effective Time or the
    termination of this Agreement in accordance with
    <U>Article&#160;7</U>, the Company shall and shall cause its
    subsidiaries to: (A)&#160;conduct its business in all material
    respects in the ordinary course of business consistent with past
    practice and (B)&#160;use its reasonable best efforts to
    maintain and preserve substantially intact its business
    organization and the goodwill of those having business
    relationships with&#160;it.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (b)&#160;Without limiting the generality of the foregoing, and
    except as (1)&#160;set forth in the Company Disclosure Schedule
    delivered to Parent as of the date hereof, (2)&#160;expressly
    contemplated or permitted by this Agreement, or
    (3)&#160;required by Law, during the period from the date of
    this Agreement to the earlier of the Effective Time or the
    termination of this Agreement in accordance with
    <U>Article&#160;7</U>, the Company shall not and shall not
    permit its subsidiaries to:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (i)&#160;(A)&#160;authorize for issuance, issue, deliver, sell
    or agree or commit to issue, sell or deliver (whether through
    the issuance or granting of options, commitments, subscriptions,
    rights to purchase or otherwise), pledge or otherwise encumber
    any shares of its capital stock, any other securities or any
    securities convertible into, or any rights, warrants or options
    to acquire, any such shares, securities or convertible
    securities or any other securities or equity equivalents
    (including without limitation stock appreciation rights or
    phantom interests), except for issuances of Common Shares upon
    the exercise of Options outstanding as of the date hereof or
    (B)&#160;repurchase, redeem or otherwise acquire any shares of
    its capital stock or other equity interests (including, without
    limitation, securities exchangeable for, or options, warrants,
    calls, commitments or rights of any kind to acquire, capital
    stock or other equity interests of the Company or any of its
    subsidiaries) (it being acknowledged and agreed that,
    notwithstanding anything to the contrary contained in the
    Company Disclosure Schedule, the Company shall not, and shall
    cause its subsidiaries not to, take, enter into or engage in any
    respect in any of the actions referred to in this
    clause&#160;(i));
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (ii)&#160;(A)&#160;sell, transfer or pledge, or agree to sell,
    transfer or pledge, any equity interest owned by it in any of
    its subsidiaries or alter through merger, liquidation,
    reorganization, restructuring or in any other fashion the
    corporate structure or ownership of any of its subsidiaries,
    (B)&#160;amend or otherwise change its Certificate of
    Incorporation or Bylaws or equivalent organizational documents,
    (C)&#160;split, combine or reclassify any shares of its capital
    stock or (D)&#160;amend, or grant any waiver under, any rights
    plan, &#147;poison pill&#148; or similar arrangement adopted by
    the Company (except with respect to Parent or any of its
    affiliates);
</DIV>

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    <BR>
    A-21
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (iii)&#160;declare, set aside or pay any dividends on (whether
    in cash, stock or property), or make any other distributions in
    respect of, any of its capital stock (except for dividends paid
    by direct or indirect wholly owned subsidiaries to the Company
    with respect to capital stock) (it being acknowledged and agreed
    that, notwithstanding anything to the contrary contained in the
    Company Disclosure Schedule, the Company shall not, and shall
    cause its subsidiaries not to, take, enter into or engage in any
    respect in any of the actions referred to in this
    clause&#160;(iii));
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (iv)&#160;(A)&#160;grant or agree to any increase in any manner
    the compensation or fringe benefits of, or pay any bonus or
    other compensation to, any current or former director, officer
    or employee except for (1)&#160;increases and bonuses expressly
    contemplated by or required under existing employment
    agreements, bonus plans and other agreements and arrangements as
    in effect as of the date hereof listed in
    <U>Section&#160;5.01(b)(iv)(A)(1)</U> of the Company Disclosure
    Schedule and (2)&#160;for normal annual or other periodic
    individual increases in base salary or hourly wages to employees
    earning non-contingent cash compensation of less than
    $100,000&#160;per annum in the ordinary course of business
    consistent with past practice; (B)&#160;subject to the
    exceptions to the covenants set forth in clause&#160;(A)&#160;of
    this <U>Section&#160;5.02(b)(iv)</U>, enter into any new or
    amend any existing employment, severance or termination or
    change in control agreement with any current or former director,
    officer or employee; (C)&#160;become obligated under any Benefit
    Plan that was not in existence on the date hereof or amend,
    modify or terminate any Benefit Plan or other employee benefit
    plan or any agreement, arrangement, plan or policy for the
    benefit of any current or former director, officer or employee
    in existence on the date hereof; (D)&#160;permit any officer or
    employee to rescind, withdraw or amend or modify in any respect
    any pending or announced retirement or any resignation (or the
    terms and conditions thereof) heretofore submitted to the
    Company or any of its subsidiaries; (E)&#160;hire any employee,
    except (1)&#160;to replace or fill a vacancy of any employee of
    the Company or any of its subsidiaries which occurred prior to
    the date hereof (each of which is listed on
    <U>Section&#160;5.01(b)(iv)(E)(1)</U> of the Company Disclosure
    Schedule) or to fill a vacancy of any employee of the Company or
    its subsidiaries which occurs subsequent to the date hereof due
    to the voluntary resignation by any such employee earning annual
    non-contingent cash compensation of less than $100,000&#160;per
    annum subsequent to the date hereof, (2)&#160;to satisfy
    contractual obligations existing as of the date hereof and set
    forth on <U>Section&#160;5.01(b)((iv)(E)(2)</U> of the Company
    Disclosure Schedule, (3)&#160;to hire for the positions of
    Divisional Merchandise Manager-Home and Art Design Manager on
    reasonable and customary terms that are consistent with past
    practice, which terms shall not, in any event, provide for the
    making of any
    <FONT style="white-space: nowrap">change-of-control</FONT>
    bonus or payment or any similar payment to any such person,
    whether in connection with his termination or otherwise,
    (4)&#160;to hire and replace any hourly or secretarial employee,
    in each case, on reasonable and customary terms consistent with
    past practice, which terms shall not, in any event, provide for
    the making of any
    <FONT style="white-space: nowrap">change-of-control</FONT>
    bonus or payment or any similar payment to any such person,
    whether in connection with his termination or otherwise, or
    (5)&#160;with the prior written consent of Parent, to hire any
    other employee; or (F)&#160;pay any benefit not required by any
    plan or arrangement as in effect as of the date hereof
    (including, without limitation, the granting of, acceleration
    of, exercisability of or vesting of stock options, stock
    appreciation rights or restricted stock, except as otherwise
    contemplated by this Agreement);
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (v)&#160;acquire or agree to acquire, including, without
    limitation, by merging or consolidating with, or purchasing all
    or substantially all the assets or capital stock or other equity
    interests of, or by any other manner, any business or any
    corporation, partnership, association or other business
    organization or division thereof, other than purchases of
    inventory or supplies or other assets in the ordinary course of
    business consistent with past practice;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (vi)&#160;sell, lease, license, mortgage or otherwise encumber
    or subject to any Lien or otherwise dispose of, or agree to
    sell, lease, license, mortgage or otherwise encumber or subject
    to any Lien or otherwise dispose of, any of its properties or
    assets other than (A)&#160;immaterial properties or assets (or
    immaterial portions of properties or assets) and (B)&#160;in the
    ordinary course of business consistent with past practice;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (vii)&#160;other than the incurrence of indebtedness under the
    Company&#146;s existing revolving credit facility with PNC
    Capital Markets and guaranties of real property leases in the
    ordinary course of business with any person not affiliated with
    any officer, director or employee of the Company or its
    subsidiaries, create, incur, assume or modify in any material
    respect any indebtedness for borrowed money, or issue any note,
    bond or other debt security, or guarantee any indebtedness, or
    make any loans, advances (other than advances to
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    A-22
</DIV><!-- END LOGICAL PAGE -->
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    employees of the Company or any subsidiary in the ordinary
    course of business consistent with past practice) or capital
    contributions to or investments in any other Person other than
    to any of the Company and its subsidiaries, except for
    indebtedness other than indebtedness for borrowed money in an
    amount not in excess of $250,000 in the aggregate and
    indebtedness to the Company&#146;s merchandise suppliers for
    products purchased in the ordinary course of business consistent
    with past practice;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (viii)&#160;make or forgive any loans, advances or capital
    contributions to, guarantees for the benefit of, or investments
    in, any person or entity (other than loans between or among the
    Company and any of its wholly-owned subsidiaries);
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (ix)&#160;assume, guarantee or otherwise become liable or
    responsible (whether directly, contingently or otherwise) for
    the obligations of any other Person, except for the obligations
    of the subsidiaries of the Company permitted under this
    Agreement;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (x)&#160;adopt or put into effect a plan of complete or partial
    liquidation, dissolution, merger, consolidation, restructuring,
    recapitalization or other reorganization of the Company or any
    of its subsidiaries (other than the Transactions);
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (xi)&#160;(A)&#160;enter into, amend, modify or supplement any
    Material Contract or License Agreement outside of the ordinary
    course of business consistent with past practice (except as may
    be necessary for the Company to comply with its obligations
    hereunder) or (B)&#160;waive, release, grant, assign or transfer
    any of its material rights or claims (whether such rights or
    claims arise under a Material Contract, License Agreement or
    otherwise);
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (xii)&#160;authorize or make any capital expenditures that are
    not set forth in the 2007 approved budget or in excess of
    $100,000 in the aggregate for the Company and its subsidiaries
    taken as a whole or any Expenses in connection with the
    Transactions, other than those expenses (A)&#160;payable to the
    Persons set forth on <U>Section&#160;3.20</U> of the Company
    Disclosure Schedule pursuant to contractual arrangements as in
    effect as of the date hereof, (B)&#160;reasonably incurred
    actual fees and expenses payable to the Company&#146;s outside
    legal counsel for services rendered in connection with the
    Transactions (including any litigation with respect thereto) and
    (C)&#160;other reasonably incurred actual fees and expenses for
    services rendered in connection with the Transactions (e.g.,
    printing, proxy solicitation, etc.), but excluding, for
    avoidance of doubt, any Expenses paid or payable to any current
    or former employee, officer or director of the Company or any of
    its subsidiaries;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (xiii)&#160;fail to continue insurance coverages that cover
    risks of such types and in such amounts as are consistent with
    the Company&#146;s past practices;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (xiv)&#160;enter into, amend, modify or supplement any
    agreement, transaction, commitment or arrangement with any
    current or former officer, director, employee or other affiliate
    of the Company or any of its subsidiaries (or any affiliate of
    any of the foregoing) other than agreements, transactions,
    commitments and arrangements (A)&#160;permitted by
    <U>Section&#160;5.01(b)(iv)(B)</U> hereof or (B)&#160;as
    otherwise expressly contemplated by this Agreement;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (xv)&#160;establish or acquire (A)&#160;any subsidiary other
    than wholly-owned subsidiaries or (B)&#160;subsidiaries
    organized outside of the United States and its territorial
    possessions;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (xvi)&#160;amend, modify or waive any term of any outstanding
    security of the Company or any of its subsidiaries, except as
    otherwise provided in this Agreement;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (xvii)&#160;fail to (A)&#160;maintain any real property to which
    the Company and any of its subsidiaries have ownership or a
    leasehold interest (including, without limitation, the
    furniture, fixtures, equipment and systems therein) in its
    current condition, subject to reasonable wear and tear and
    subject to any casualty or condemnation or Material Contract,
    (B)&#160;timely pay all taxes, water and sewage rents,
    assessments and insurance premiums affecting such real property
    and (C)&#160;timely comply in all material respects with the
    terms and provisions of all leases, contracts and agreements
    relating to such real property and the use and operation thereof;
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    A-23
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (xviii)&#160;enter into any labor or collective bargaining
    agreement, memorandum or understanding, grievance settlement or
    any other agreement or commitment to or relating to any labor
    union, except as required by Law;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (xix)&#160;settle or compromise any pending or threatened suit,
    action, claim or litigation with any current or former officer,
    employee or director or in excess of $100,000&#160;per
    litigation net of insurance proceeds or in excess of $250,000 in
    the aggregate net of insurance proceeds;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (xx)&#160;change any of the accounting policies, practices or
    procedures (including tax accounting policies, practices and
    procedures) used by the Company and its subsidiaries as of the
    date hereof, except as may be required as a result of a change
    in applicable Law or in United States generally accepted
    accounting principles;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (xxi)&#160;revalue in any material respect any of its assets,
    including, without limitation, writing down the value of
    inventory in any material manner or the write-off of notes or
    accounts receivable in any material manner, except as may be
    required as a result of a change in applicable Law or in United
    States generally accepted accounting principles;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (xxii)&#160;make or change any material tax election, make or
    change any method of accounting with respect to Taxes, file any
    amended Tax Return or settle or compromise any material tax
    liability;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (xxiii)&#160;to, pay, discharge or satisfy any claims,
    liabilities or obligations (absolute, accrued, asserted or
    unasserted, contingent or otherwise), other than the payment,
    discharge or satisfaction in the ordinary course of business and
    consistent with past practice of liabilities reflected or
    reserved against in the financial statements of the Company or
    incurred in the ordinary course of business and consistent with
    past practice;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (xxiv)&#160;except as provided in <U>Section&#160;5.09</U>, take
    any action to exempt any Person (other than Parent or Merger
    Sub) or any action taken by such Person from, or make such
    Person or action not subject to, (A)&#160;the provisions of
    Section&#160;203 of the DGCL, if applicable, or (B)&#160;any
    other state takeover law or state law that purports to limit or
    restrict business combinations or the ability to acquire or vote
    shares;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (xxv)&#160;take, or agree or commit to take, any action that
    would, or is reasonably likely to, make any representation or
    warranty of the Company contained in this Agreement inaccurate
    at, or as of any time prior to, the Effective Time or result in
    any of the conditions to the Merger set forth in
    <U>Article&#160;6</U> not being satisfied, or omit, or agree to
    omit, to take any action necessary to prevent any such
    representation or warranty from being inaccurate in any material
    respect at any such time or to prevent any such condition from
    not being satisfied;&#160;or
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (xxvi)&#160;agree or commit to do any of the foregoing.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (c)&#160;Except as expressly contemplated or permitted by this
    Agreement or as agreed to in writing by the Company or as
    required by Law, during the period from the date of this
    Agreement to the earlier of the Effective Time or the
    termination of this Agreement in accordance with Article&#160;7,
    Parent shall not, and shall not permit Merger Sub to:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (i)&#160;take, or agree or commit to take, any action that
    would, or is reasonably likely to, (A)&#160;make any
    representation or warranty of Parent and Merger Sub contained in
    this Agreement inaccurate at, or as of any time prior to, the
    Effective Time or result in any of the conditions to the Merger
    set forth in <U>Article&#160;6</U> not being satisfied, or
    (B)&#160;omit, or agree to omit, to take any action necessary to
    prevent any such representation or warranty from being
    inaccurate in any material respect at any such time or to
    prevent any such condition from not being satisfied;&#160;and
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (ii)&#160;agree or commit to do any of the foregoing.
</DIV>
<A name='559'>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    5.02&#160;&#160;<I><U>Shareholders&#146; Meeting</U></I>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (a)&#160;The Company, acting through the Company Board, shall,
    in accordance with applicable Law and its certificate of
    incorporation and bylaws, duly call, give notice of, convene and
    hold a special meeting of its shareholders (the
    &#147;<U>Shareholders Meeting</U>&#148;) as soon as practicable
    following the execution of this Agreement for the purpose of
    considering and voting upon the approval and adoption of this
    Agreement, the Merger and such other
</DIV>

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    <BR>
    A-24
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    matters as may be necessary to effectuate the Transactions. The
    Company Board shall, subject to <U>Section&#160;5.09</U>,
    (i)&#160;recommend to the shareholders of the Company the
    approval and adoption of this Agreement, (ii)&#160;include in
    the Proxy Statement such favorable recommendation of the Company
    Board that the shareholders of the Company vote in favor of the
    approval and adoption of this Agreement, and (iii)&#160;take all
    lawful action to solicit such approval from the shareholders of
    the Company. Without limiting the generality of the foregoing,
    the Company&#146;s obligations pursuant to the first sentence of
    this <U>Section&#160;5.02(a)</U> shall not be affected by
    (i)&#160;the Company Board taking any action permitted by
    <U>Section&#160;5.09</U> (including withdrawing or modifying its
    approval or recommendation of the Merger and this Agreement) or
    (ii)&#160;the commencement, public announcement, disclosure or
    other communication to the Company Board of any Acquisition
    Proposal or any intention (whether or not conditional) with
    respect to any potential or future Acquisition Proposal, unless,
    in the case of clause&#160;(i), this Agreement is terminated
    pursuant to <U>Section&#160;7.04(b)</U>, or, in the case of
    clause&#160;(ii), this Agreement is terminated pursuant to
    <U>Section&#160;7.03(b)</U>.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (b)&#160;As soon as practicable following the execution of this
    Agreement and in connection with the Shareholders Meeting (and
    notwithstanding the pendency of the Go Shop Period (as defined
    hereafter)), the Company shall (i)&#160;promptly prepare and
    file with the SEC (but in no event later than fifteen days after
    the date hereof), use its best efforts to have cleared by the
    SEC and thereafter mail to its shareholders as promptly as
    practicable the Proxy Statement and all other proxy materials
    required in connection with such meeting, (ii)&#160;notify
    Merger Sub and Parent of the receipt of any comments of the SEC
    with respect to the Proxy Statement and of any requests by the
    SEC for any amendment or supplement thereto or for additional
    information and shall promptly provide to Merger Sub and Parent
    copies of all correspondence between the Company or any
    representative of the Company and the SEC, (iii)&#160;shall give
    Merger Sub and Parent and their counsel the opportunity to
    review the Proxy Statement prior to its being filed with the SEC
    and shall give Merger Sub and Parent and their counsel the
    opportunity to review all amendments and supplements to the
    Proxy Statement and all responses to requests for additional
    information and replies to comments prior to their being filed
    with, or sent to, the SEC, (iv)&#160;subject to the terms of
    <U>Section&#160;5.02(a)</U> and <U>Section&#160;5.09</U>, use
    its best efforts to obtain the necessary approvals by its
    shareholders of this Agreement and the Merger and (v)&#160;use
    its best efforts otherwise to comply with all legal requirements
    applicable to such meeting. Each of the Company and Parent
    further agrees that if such party shall become aware prior to
    the Effective Time of any information furnished by such party
    that would cause any of the statements in the Proxy Statement to
    be false or misleading with respect to any material fact, or to
    omit to state any material fact necessary to make the statements
    therein not false or misleading, to promptly inform the other
    parties thereof and to take the necessary steps to correct the
    Proxy Statement.
</DIV>
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    5.03&#160;&#160;<I><U>Filings and Consents</U></I>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Subject to the terms and conditions of this Agreement, each of
    the parties hereto (i)&#160;shall use all commercially
    reasonable efforts to cooperate with one another in determining
    which filings are required to be made by each party prior to the
    Effective Time with, and which consents, approvals, permits or
    authorizations are required to be obtained by each party prior
    to the Effective Time from, Governmental Authorities or other
    third parties in connection with the execution and delivery of
    this Agreement and the consummation of the Transactions and
    (ii)&#160;shall use all commercially reasonable efforts to
    assist the other party in timely making all such filings and
    timely seeking all such consents, approvals, permits,
    authorizations and waivers required to be made and obtained by
    the other party. Without limiting the foregoing, each of the
    parties hereto shall (and shall use all commercially reasonable
    efforts to cause their affiliates, directors, officers,
    employees, agents, attorneys, accountants and representatives
    to) consult and fully cooperate with and provide assistance to
    each other in seeking early termination of any waiting period
    under the HSR Act, if applicable. Prior to making any
    application to or filing with any Governmental Entity in
    connection with this Agreement, each party shall provide the
    other party with drafts thereof (excluding any confidential
    information included therein) and afford the other party a
    reasonable opportunity to comment on such drafts. If, at any
    time after the Effective Time, any further action is necessary
    or desirable to carry out the purpose of this
    <U>Section&#160;5.03</U>, the proper officers and directors of
    the Surviving Corporation shall take all such necessary action.
    Each of the Company and Parent shall bear one half of the cost
    of any required filing to be made with any Governmental
    Authorities in connection with the Transactions.
</DIV>

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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->
<A name='561'>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    5.04&#160;&#160;<I><U>Access to Information</U></I>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    From the date of this Agreement until the earlier of Effective
    Time and the date this Agreement is properly terminated in
    accordance with <U>Article&#160;7</U>, the Company will, and
    will cause each of its subsidiaries and its and their
    affiliates, and each of their respective officers, directors,
    employees, agents, counsel, accountants, investment bankers,
    financial advisors and representatives (collectively, the
    &#147;<U>Company Representatives</U>&#148;) to, give Merger Sub
    and Parent and their respective officers, directors, employees,
    agents, counsel, accountants, investment bankers, financial
    advisors, representatives, consultants and financing sources
    (collectively, the &#145;&#145;<U>Purchaser
    Representatives</U>&#148;) access, upon reasonable notice and
    during normal business hours, to the offices and other
    facilities and to the books and records and personnel of the
    Company and each of its subsidiaries and will cause its
    subsidiaries and the Company Representatives to furnish Parent,
    Merger Sub and the Purchaser Representatives with such financial
    and operating data and such other information with respect to
    the business and operations of the Company and its subsidiaries
    as Parent, Merger Sub or the Purchaser Representatives may from
    time to time reasonably request. Each of Parent and Merger Sub
    will, and will cause the Purchaser Representatives to, treat any
    such information in accordance with the terms and conditions of
    that certain Confidentiality Agreement dated January&#160;20,
    2007 between the Company and Parent. No investigation pursuant
    to this <U>Section&#160;5.04</U> shall affect any
    representations or warranties of the parties herein or the
    conditions to the obligations of the parties hereto. Neither the
    Company nor any of its subsidiaries shall be required to provide
    access to, or disclose, information to the extent such access or
    disclosure would violate any attorney-client privilege or
    contravene any law, rule, regulation, order, judgment, decree or
    binding agreement entered into prior to the date of this
    Agreement. The Company will make appropriate substitute
    disclosure arrangements under circumstances in which the
    restrictions of the preceding sentence apply.
</DIV>
<A name='562'>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    5.05&#160;&#160;<I><U>Notification of Certain Matters</U></I>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Each of the parties hereto shall promptly notify the others in
    writing of (a)&#160;receipt of any notice or other communication
    from any third party alleging that the consent of such third
    party is or may be required in connection with the transactions
    contemplated by this Agreement, (b)&#160;any Company Material
    Adverse Effect or Purchaser Material Adverse Effect, as the case
    may be, (c)&#160;any claims, actions, proceedings or
    governmental investigations commenced or, to its knowledge,
    threatened, involving or affecting the Company or any of its
    subsidiaries or any of their property or assets, (d)&#160;the
    occurrence, or failure to occur, of any event that would be
    likely to cause any representation or warranty made by such
    party contained in this Agreement to be untrue or inaccurate in
    any material respect and (e)&#160;any failure of the Company,
    Merger Sub or Parent, as the case may be, or of any officer,
    director, employee or agent thereof, to comply with or satisfy
    any covenant, condition or agreement to be complied with or
    satisfied by it hereunder. Notwithstanding anything in this
    Agreement to the contrary, no such notification shall affect the
    representations, warranties or covenants of any party or the
    conditions to the obligations of any party hereunder, nor shall
    it limit or otherwise affect the remedies available hereunder to
    the party receiving such notice.
</DIV>
<A name='563'>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    5.06&#160;&#160;<I><U>Public Announcements</U></I>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The initial press release with respect to the execution of this
    Agreement shall be a joint press release reasonably acceptable
    to Parent and the Company. Thereafter, so long as this Agreement
    is in effect, none of the Company, Parent or any of their
    respective affiliates shall issue or cause the publication of
    any press release or other announcement with respect to the
    Merger, this Agreement or the other Transactions without the
    prior approval of the Company and Parent, which consent shall
    not be unreasonably withheld, provided, however, that a party
    may, without the prior consent of the other party, issue such
    press release or make such public statements as may as may be
    required by Law or court process, after consultation with
    counsel, or the rules, regulations
    <FONT style="white-space: nowrap">and/or</FONT>
    listing agreement of the American Stock Exchange or any
    regulatory or self regulatory authorities (in which case the
    party shall use commercially reasonable efforts to review the
    form and substance of such release or statement with the other
    party (and reasonably consider the comments of the other party)
    prior to issuing such release, however, approval of such other
    party shall not be necessary in such case). In addition,
    promptly following the date of this Agreement, the Company and
    Parent shall work in good faith to establish mutually agreeable
    talking points that may be made to any supplier, vendor or other
    third parties with material business relations with the Company
    and its subsidiaries regarding the Transactions and the impact
    of Transactions on the business of the Company and its
    subsidiaries (the &#145;&#145;<U>Approved
    Communications</U>&#148;). Any such Approved Communications
    shall include public information about the Transaction and shall
    not interfere with the business of the Company. The Company
    shall
</DIV>

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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    inform its directors, officers and any direct reports to
    officers and who communicate with the Company&#146;s suppliers,
    vendors or other third parties with material business relations
    in the ordinary course of their employment that all
    communications made to such suppliers, vendors or other third
    parties with material business relations regarding the
    Transactions and the impact of the Transactions on the business
    of the Company and its subsidiaries must comply with the
    Approved Communications, and the Company shall use its
    reasonable best efforts to ensure such compliance. Furthermore,
    the Company shall use its reasonable best efforts to ensure that
    all communications made by directors and executive officers of
    the Company and its subsidiaries to non-executive employees of
    the Company and its subsidiaries regarding the Transactions, and
    the impact of the Transactions on the business of Company and
    its subsidiaries, comply in all material respects with the
    Approved Communications. For the avoidance of doubt, nothing in
    this <U>Section&#160;5.06</U> shall prohibit any communication
    to any supplier, vendor or other third party with a business
    relationship made in the ordinary course of business.
</DIV>
<A name='564'>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    5.07&#160;&#160;<I><U>Indemnification; Directors&#146; and
    Officers&#146; Insurance</U></I>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (a)&#160;The certificate of incorporation and the bylaws of the
    Surviving Corporation shall contain provisions with respect to
    indemnification, advancement of expenses and director
    exculpation as are set forth in the Company&#146;s certificate
    of incorporation and bylaws as in effect at the date hereof (to
    the extent consistent with applicable Law), which provisions
    shall not be amended, repealed or otherwise modified for a
    period of six years after the Effective Time in any manner that
    would adversely affect the rights thereunder of the persons who
    at any time prior to the Effective Time were entitled to
    indemnification, advancement of expenses or exculpation under
    the Company&#146;s certificate of incorporation and bylaws in
    respect of actions or omissions occurring at or prior to the
    Effective Time (including, without limitation, the
    Transactions), unless otherwise required by applicable Law.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (b)&#160;From and after the Effective Time and until the
    expiration of any applicable statutes of limitation, the
    Surviving Corporation shall indemnify, defend and hold harmless
    the present and former officers, directors, employees and agents
    of the Company and its subsidiaries (collectively, the
    &#145;&#145;<U>Indemnified Parties</U>&#148;) against all
    losses, claims, damages, expenses (including reasonable
    attorneys&#146; fees), liabilities or amounts that are paid in
    settlement of, or otherwise (&#147;<U>Losses</U>&#148;) (but
    only to the extent such Losses are not otherwise covered by
    insurance and paid), in connection with any claim, action, suit,
    proceeding or investigation, whether civil, criminal,
    administrative or investigative and including all appeals
    thereof (a &#145;&#145;<U>Claim</U>&#148;) to which any
    Indemnified Party is or may become a party to by virtue of his
    or her service as a present or former director, officer,
    fiduciary or employee of the Company or any of its subsidiaries
    or his or her serving at the request of the Company or its
    subsidiaries as a director, officer, employee, fiduciary or
    agent of another corporation, partnership, joint venture, trust
    or other enterprise, and arising out of actual or alleged
    events, actions or omissions occurring or alleged to have
    occurred at or prior to the Effective Time (including, without
    limitation, matters related to the negotiation, execution and
    performance of this Agreement or consummation of the
    Transactions), in each case to the fullest extent permitted and
    provided in the Company&#146;s certificate of incorporation and
    bylaws as in effect at the date hereof and as permitted under
    the DGCL.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (c)&#160;Any Indemnified Party wishing to claim indemnification
    under this <U>Section&#160;5.07</U> after the Effective Time,
    upon learning of any such Claim, shall notify the Surviving
    Corporation thereof (although the failure to so notify the
    Surviving Corporation shall not relieve the Surviving
    Corporation from any liability that the Surviving Corporation
    may have under this <U>Section&#160;5.07</U>, except to the
    extent such failure actually prejudices the Surviving
    Corporation). In the event of any such Claim, the Surviving
    Corporation shall have the right to assume the defense thereof
    and the Surviving Corporation shall not be liable to such
    Indemnified Party for any legal expenses of other counsel or any
    other expenses subsequently incurred by such Indemnified Party
    in connection with the defense thereof, except that if the
    Surviving Corporation elects not to assume such defense or if
    there is an actual or potential conflict of interest between the
    Surviving Corporation and the Indemnified Party, the Indemnified
    Party may retain counsel satisfactory to him or her and the
    Surviving Corporation shall pay all reasonable fees and expenses
    of such counsel for the Indemnified Party promptly as statements
    therefor are received by the Surviving Corporation; provided,
    however, that (i)&#160;the Surviving Corporation shall not, in
    connection with any such action or proceeding or separate but
    substantially similar actions or proceedings arising out of the
    same general allegations, be liable for the fees and expenses of
    more than one separate firm of attorneys at any time for all
    Indemnified Parties, (ii)&#160;the Surviving Corporation and the
    Indemnified Parties will cooperate in the defense of any such
    matter and (iii)&#160;the Surviving Corporation shall not be
    liable for any settlement effected without its prior written
    consent, which consent will not
</DIV>

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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    be unreasonably withheld or delayed; and provided, further, that
    the Surviving Corporation shall not have any obligation
    hereunder to any Indemnified Party if and when a court of
    competent jurisdiction shall ultimately determine that the
    indemnification of such Indemnified Party in the manner
    contemplated hereby is prohibited by applicable Law.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (d)&#160;Prior to the Effective Time, (i)&#160;the Company shall
    obtain &#147;tail&#148; insurance policies with a claims period
    of six (6)&#160;years from the Effective Time with respect to
    directors&#146; and officers&#146; liability insurance in an
    amount and scope no less favorable than the existing policy of
    the Company for claims arising from facts or events that
    occurred on or prior to the Effective Time at a cost that is
    reasonable and customary for tail insurance policies with its
    existing directors&#146; and officers&#146; liability policy
    insurer or an insurer with a comparable insurer financial
    strength rating as the Company&#146;s existing directors&#146;
    and officers&#146; liability policy insurer; or (ii)&#160;if the
    Company shall not have obtained such tail policy, the Surviving
    Corporation will provide for a period of not less than six
    (6)&#160;years after the Effective Time the directors and
    officers who are insured under the Company&#146;s
    directors&#146; and officers&#146; insurance policy with an
    insurance policy that provides coverage for events occurring at
    or prior to the Effective Time (the &#147;<U>D&#38;O
    Insurance</U>&#148;) that is not less favorable taken as a whole
    than the existing policy of the Company or, if substantially
    equivalent insurance coverage is unavailable, the best available
    coverage; provided, however, that the Surviving Corporation
    shall not be required to pay an annual premium for the D&#38;O
    Insurance in excess of 250% of the annual premium currently paid
    by the Company for such insurance; provided further that if the
    annual premium of such coverage exceeds such amount, the
    Surviving Corporation shall use its commercially reasonable
    efforts to obtain a policy with the greatest coverage available
    for a cost not exceeding such amount. The Company shall use
    commercially reasonable efforts to obtain competitive quotes
    (from insurance providers with comparable ratings) for such
    insurance coverage in an effort to reduce the cost thereof.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (e)&#160;This <U>Section&#160;5.07</U> shall survive the
    consummation of the Merger and is intended to be for the benefit
    of, and shall be enforceable by, the Indemnified Parties
    referred to herein, their heirs and personal representatives and
    shall be binding on the Surviving Corporation and its successors
    and assigns.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (f)&#160;If the Surviving Corporation or any of its successors
    or assigns (i)&#160;consolidates with or merges into any other
    Person and shall not be the continuing or surviving corporation
    or entity of such consolidation or merger or (ii)&#160;transfers
    or conveys all or substantially all of its properties and assets
    to any Person, then, and in each case, to the extent necessary,
    proper provision shall be made so that the successors and
    assigns of the Surviving Corporation shall assume the
    obligations set forth in this <U>Section&#160;5.07</U>.
</DIV>
<A name='565'>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    5.08&#160;&#160;<I><U>Further Assurances; Reasonable
    Efforts</U></I>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Except as expressly provided in this Agreement, prior to the
    Effective Time, the parties hereto shall use all reasonable
    efforts to take, or cause to be taken, all such actions as may
    be necessary or appropriate or advisable under applicable laws,
    so as to permit consummation of the Transactions as promptly as
    practicable on the terms and subject to the conditions set forth
    in this Agreement and the parties shall cooperate fully with the
    other parties hereto to that end.
</DIV>
<A name='566'>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    5.09&#160;&#160;<I><U>Solicitation.</U></I>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (a)&#160;From and after the date hereof until the earlier of the
    Effective Time and the termination of this Agreement pursuant to
    <U>Article&#160;7</U>, the Company and its subsidiaries shall
    not, and shall cause the Company Representatives not to,
    directly or indirectly, (i)&#160;solicit, initiate or encourage
    (including by way of furnishing information or assistance), or
    take any other action to facilitate, any inquiry in connection
    with or the making of any proposal from any Person that
    constitutes, or may reasonably be expected to lead to, an
    Acquisition Proposal (as defined in
    <U>Section&#160;5.09(f)</U>), (ii)&#160;enter into, explore,
    maintain, participate in or continue any discussion or
    negotiation with any Person (other than Merger Sub, Parent or
    any of the Purchaser Representatives, as applicable) regarding
    an Acquisition Proposal, or furnish to any Person (other than
    Merger Sub, Parent or any of the Purchaser Representatives, as
    applicable) any information or otherwise cooperate in any way
    with, or assist or participate in, facilitate or encourage, any
    effort or attempt by any other Person (other than Merger Sub,
    Parent or any of the Purchaser Representatives, as applicable)
    to make or effect an Acquisition Proposal, (iii)&#160;enter into
    any agreement, arrangement or understanding with respect to, or
    otherwise endorse, any Acquisition Proposal, or
    (iv)&#160;authorize or permit any Company Representative to take
    any such action; provided, however, that nothing contained in
    this <U>Section&#160;5.09</U> shall prevent, prohibit or limit
    the
</DIV>

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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Company or the Company Board from (1)&#160;complying with its
    disclosure obligations under applicable federal or state Law or
    (2)&#160;prior to approval of this Agreement by the shareholders
    of the Company at the Shareholders Meeting, furnishing
    information to, or engaging in discussions or negotiations with,
    any Person that makes an unsolicited bona fide written
    Acquisition Proposal (which did not result from a breach of this
    <U>Section&#160;5.09</U>) , if and only to the extent that,
    (A)&#160;the Company Board determines in good faith after
    consultation with outside legal counsel, that such action is
    necessary for the Company Board to comply with its fiduciary
    duties to the Company&#146;s shareholders under applicable Law,
    (B)&#160;the Acquisition Proposal constitutes or would
    reasonably be expected to lead to a Superior Proposal (as
    defined in <U>Section&#160;5.09(g)</U>) and (C)&#160;prior to
    furnishing such information to, or engaging in discussions or
    negotiations with, such Person, the Company receives from such
    Person an executed confidentiality agreement (which agreement
    shall be provided to Parent for information purposes) with terms
    no less favorable to the Company than those contained in that
    certain Confidentiality Agreement dated January&#160;20, 2007
    between the Company and Parent; provided further that nothing
    contained in this <U>Section&#160;5.09</U> shall prohibit or in
    any way limit or restrict the Company and the Company
    Representatives, during the period commencing as of the date
    hereof and ending as of 11:59&#160;p.m. New York time on the
    30th&#160;calendar day immediately following the date of this
    Agreement (the &#147;<U>Go Shop Period</U>&#148;), from
    furnishing information to, or engaging in discussions or
    negotiations with, any Person that the Company concludes may
    make an offer to acquire the Company which would be deemed to be
    Acquisition Proposal (which did not result from a breach of this
    <U>Section&#160;5.09</U>) if prior to furnishing such
    information to, or engaging in discussions or negotiations with,
    such Person, the Company receives from such Person an executed
    confidentiality agreement (which agreement shall be provided to
    Parent for information purposes) with terms no less favorable to
    the Company than those contained in that certain Confidentiality
    Agreement dated January&#160;20, 2007 between the Company and
    Parent.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (b)&#160;From and after the date hereof until the earlier of the
    Effective Time and the termination of this Agreement pursuant to
    <U>Article&#160;7</U>, if the Company Board is entitled to
    furnish information to, or engage in discussions or negotiations
    with, any Person on the terms contemplated in
    <U>Section&#160;5.09(a)</U>, the Company Board may, prior to the
    approval of this Agreement by the shareholders of the Company at
    the Shareholders Meeting, terminate this Agreement in respect of
    any Acquisition Proposal pursuant to the termination provisions
    set forth in <U>Article&#160;7</U> hereof if (A)&#160;such
    Acquisition Proposal constitutes a Superior Proposal and
    (B)&#160;the Company Board shall have determined in good faith
    after consultation with outside legal counsel, that such action
    is necessary for the Company Board to comply with its fiduciary
    duties to the Company&#146;s shareholders under applicable Law.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (c)&#160;The Company (including with respect to any Person with
    whom the Company has contact during the Go Shop Period)
    (i)&#160;will promptly (but in any event within 24&#160;hours)
    notify Parent orally and in writing of the receipt of any
    Acquisition Proposal or any inquiry regarding the making of an
    Acquisition Proposal including any request for information, the
    terms and conditions of such request, Acquisition Proposal or
    inquiry and the identity of the Person making such request,
    Acquisition Proposal or inquiry and (ii)&#160;will keep Parent
    fully informed of the status and details (including amendments
    and proposed amendments) of any such request, Acquisition
    Proposal or inquiry. Prior to taking any of the actions referred
    to in <U>Section&#160;5.09(a)</U> (regardless of whether any
    such action is to be taken during or after the completion of the
    Go Shop Period), the Company Board shall promptly (but in any
    event within 24&#160;hours) notify Parent orally and in writing
    of any action it proposes to take with respect to any such
    Acquisition Proposal. After taking any such action, the Company
    Board shall promptly advise Parent orally and in writing of the
    status of such action as developments arise or as requested by
    Parent. Without limiting the foregoing, at least five business
    days <B>(</B>the &#147;<U>Five Day Period</U>&#148;) prior to
    taking any of the actions referred to in
    <U>Section&#160;5.09(b)</U>, the Company Board shall notify
    Parent of any such action it proposes to take and, during the
    Five Day Period, the Company Board shall negotiate in good faith
    with Parent with respect to any revised proposal to acquire the
    Common Shares that Parent may make during or prior to the
    expiration of the Five Day Period.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (d)&#160;Nothing contained in this Agreement shall prevent the
    Company Board from taking, and disclosing to the Company
    shareholders, a position contemplated by
    <FONT style="white-space: nowrap">Rule&#160;14d-9</FONT>
    or
    <FONT style="white-space: nowrap">Rule&#160;14e-2</FONT>
    promulgated under the Exchange Act with regard to any tender
    offer; provided, however, that neither the Company, or the
    Company Board shall, except as permitted by
    <U>Section&#160;5.09(b)</U>, propose to approve or recommend any
    Acquisition Proposal. Without limiting the foregoing, it is
    understood and agreed that any violation of the restrictions set
    forth in the preceding sentence by any Company Representative,
    whether or not authorized to so act by or on behalf of the
    Company or any of its subsidiaries or any of their affiliates,
    shall be deemed to be a breach of this <U>Section&#160;5.09</U>
    by the Company.
</DIV>

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    <BR>
    A-29
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (e)&#160;Immediately following the expiration of the Go Shop
    Period, the Company and each of its subsidiaries shall cease and
    cause the Company Representatives to cease any and all existing
    activities, discussions or negotiations with any parties (other
    than Merger Sub, Parent or any of the Purchaser Representatives,
    as applicable) conducted heretofore or during the Go Shop Period
    with respect to any Acquisition Proposal, and shall use its
    reasonable best efforts to cause any such parties in possession
    of confidential information about the Company that was furnished
    by or on behalf of the Company to return or destroy all such
    information in the possession of any such party or its
    representatives.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (f)&#160;For purposes of this Agreement, &#147;<U>Acquisition
    Proposal</U>&#148; shall mean any offer or proposal for, or any
    indication of interest in, (i)&#160;any direct or indirect
    acquisition or purchase of 15% or more of the total assets of
    the Company and its subsidiaries, in a single transaction or
    series of transactions, (ii)&#160;any direct or indirect
    acquisition or purchase of 15% or more of any class of equity
    securities of the Company or any of its subsidiaries, in a
    single transaction or series of transactions, (iii)&#160;any
    tender offer or exchange offer (including a self-tender offer)
    that if consummated would result in any person beneficially
    owning 15% or more of any class of equity securities of the
    Company or any of its subsidiaries, (iv)&#160;any merger,
    consolidation, share exchange, business combination,
    recapitalization, reclassification or other similar transaction
    involving the Company or any of its subsidiaries or (v)&#160;any
    public announcement of an agreement, proposal, plan or intention
    to do any of the foregoing, other than the transactions
    contemplated by this Agreement.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (g)&#160;For purposes of this Agreement, &#147;<U>Superior
    Proposal</U>&#148; shall mean any bona fide written Acquisition
    Proposal by a Person that (i)&#160;the Company Board has
    determined in good faith, after consultation with an independent
    financial advisor of nationally recognized reputation (which may
    be Stephens, Inc.), is more favorable from a financial point of
    view to the Company&#146;s shareholders than the Merger
    (including any adjustment to the terms and conditions thereof
    proposed in writing by Parent in response to any such
    Acquisition Proposal) and (ii)&#160;is reasonably capable of
    being consummated in a timely manner (taking into account all
    financial, regulatory, legal and other aspects of such proposal
    (including, without limitation, any antitrust or competition Law
    approvals or non-objections)) and for which the Person making
    such Acquisition Proposal has delivered satisfactory written
    evidence to the Company Board that the consummation of such
    Acquisition Proposal is not contingent on the receipt of
    financing.
</DIV>
<A name='567'>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    5.10&#160;&#160;<I><U>Third Party Confidentiality/Standstill
    Agreements</U></I>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    During the period from the date of this Agreement through the
    Effective Time, the Company shall not terminate, amend, modify
    or waive any material provision of any confidentiality or
    standstill agreement to which the Company is a party. During
    such period, the Company agrees to enforce, to the fullest
    extent permitted under applicable Law, the provisions of any
    such agreements, including, but not limited to, seeking
    injunctions to prevent any breaches of such agreements to
    enforce specifically the terms and provisions thereof in a court
    in the United States or any state thereof having jurisdiction.
</DIV>
<A name='568'>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    5.11&#160;&#160;<I><U>SEC Reports</U></I>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    From the date of this Agreement until the earlier of the
    termination of this Agreement pursuant to <U>Article&#160;7</U>
    or the Effective Time, the Company shall file on a timely basis
    all SEC Reports required to be filed by it with the SEC under
    the Exchange Act, the Securities Act and the published rules and
    regulations of the SEC under either of the foregoing applicable
    to such SEC Reports, which SEC Reports shall comply in all
    material respects with the requirements of the Exchange Act, the
    Securities Act and the published rules and regulations of the
    SEC thereunder, each as applicable to such SEC Reports.
</DIV>
<A name='569'>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    5.12&#160;&#160;<I><U>Delisting</U></I>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Each of the parties hereto agrees to cooperate with the other
    party in taking, or causing to be taken, all actions necessary
    (i)&#160;to delist the Common Shares from the AmEx and
    (ii)&#160;to terminate the registration of the Common Shares
    under the Exchange Act; provided that such delisting and
    termination shall not be required or effective until or after
    the Effective Time.
</DIV>

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    <BR>
    A-30
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->
<A name='570'>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    5.13&#160;&#160;<I><U>Cooperation with Financing</U></I>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Prior to the Effective Time, the Company shall provide, and
    shall cause its subsidiaries to, and shall use its reasonable
    best efforts to cause the Company Representatives, including
    legal and accounting advisors, to provide all cooperation
    reasonably requested by Parent in connection with the
    arrangement of the financing to be obtained by Parent, Merger
    Sub or the Surviving Corporation in connection with the
    Transactions (the &#145;&#145;<U>Financing</U>&#148;) (it being
    understood that (A)&#160;the completion of any Financing is not
    a condition to the obligation of Parent or Merger Sub to effect
    the Merger and (B)&#160;such requested cooperation does not
    unreasonably interfere with the ongoing operations of the
    Company and its subsidiaries), including (i)&#160;participation
    in meetings, presentations, road shows, due diligence sessions
    and sessions with rating agencies, (ii)&#160;assisting with the
    preparation of materials for rating agency presentations,
    offering documents, private placement memoranda and bank
    financing; (iii)&#160;executing and delivering any pledge and
    security documents, other definitive financing documents, or
    other certificates, legal opinions or documents as may be
    reasonably requested by Parent (including a certificate of the
    chief financial officer of the Company or any of its
    subsidiaries with respect to solvency matters and consents of
    accountants for use of their reports in any materials relating
    to the Financing) and otherwise reasonably facilitating the
    pledging of collateral (provided that no such pledge or security
    documents shall be effective until the Effective Time),
    (iv)&#160;furnishing Parent and its financing sources as
    promptly as practicable with financial and other pertinent
    information regarding the Company as may be reasonably requested
    by Parent, (v)&#160;using reasonable best efforts to obtain
    accountants&#146; comfort letters, legal opinions, surveys and
    title insurance as reasonably requested by Parent,
    (vi)&#160;providing monthly financial statements (excluding
    footnotes) within the time frame, and to the extent, the Company
    prepares such financial statements, (vii)&#160;taking all
    actions reasonably necessary to (A)&#160;permit the prospective
    lenders involved in the Financing to evaluate the Company&#146;s
    current assets, cash management and accounting systems, policies
    and procedures relating thereto for the purpose of establishing
    collateral arrangements and (B)&#160;establish bank and other
    accounts and blocked account agreements and lock box
    arrangements in connection with the foregoing,
    (viii)&#160;entering into one or more credit or other agreements
    on terms satisfactory to Parent in connection with the Financing
    immediately prior to (but not effective until) the Effective
    Time; and (ix)&#160;taking all corporate actions, subject to the
    occurrence of the Closing, reasonably requested by Parent to
    permit the consummation of the Financing and the direct
    borrowing or incurrence of all of the proceeds of the Financing,
    by the Surviving Corporation immediately following the Effective
    Time. The Company hereby consents to the use of its and its
    subsidiaries&#146; logos in connection with the Financing;
    <I><U>provided</U> </I>that such logos are used solely in a
    manner that is not intended to nor reasonably likely to harm or
    disparage the Company or any of its subsidiaries or the
    reputation or goodwill of the Company or any of its subsidiaries
    and its or their marks.
</DIV>
<A name='571'>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    5.14&#160;&#160;<I><U>Shareholder Litigation</U></I>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Each of the parties hereto shall give the others the reasonable
    opportunity to participate in the defense of any shareholder
    litigation against the Company, Parent or Merger Sub, as
    applicable, and their directors relating to the Transactions.
    The Company agrees that it will not settle any litigation
    currently pending, or commenced after the date hereof, against
    the Company or any of its directors by any shareholder of the
    Company relating to this Agreement or the Merger, without the
    prior written consent of Parent. The Company will not
    voluntarily cooperate with any third party which has sought or
    may hereafter seek to restrain or prohibit or otherwise oppose
    the Merger and will cooperate with Parent to resist any such
    effort to restrain or prohibit or otherwise oppose the Merger.
</DIV>
<A name='572'>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    5.15&#160;&#160;<I><U>Conveyance Taxes</U></I>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Parent and the Company shall cooperate in the preparation,
    execution and filing of all returns, questionnaires,
    applications or other documents regarding any real property
    transfer or gains, sales, use, transfer, value added, stock
    transfer and stamp taxes, any transfer, recording, registration
    and other fees or any similar taxes which become payable by the
    Company or any of its subsidiaries in connection with the
    Transactions that are required or permitted to be filed on or
    before the Effective Time.
</DIV>
<A name='573'>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    5.16&#160;&#160;<I><U>Special Meeting</U></I>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Company shall take no action to call a special meeting of
    shareholders of the Company without the prior consent of Parent
    unless compelled by legal process, except in accordance with
    this Agreement or unless and until this Agreement has been
    terminated in accordance with its terms.
</DIV>

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    <BR>
    A-31
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->
<A name='574'>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    5.17&#160;&#160;<I><U>State Takeover Laws</U></I>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Company shall, upon the request of Parent, take all
    reasonable steps to assist in any challenge by Parent to the
    validity or applicability to the Transactions, including the
    Merger, of any state takeover Law.
</DIV>
<A name='575'>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    5.18&#160;&#160;<I><U>Employee Benefit Plan Matters</U></I>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (a)&#160;Parent shall cause the Surviving Corporation and its
    subsidiaries to honor in accordance with their terms as in
    effect from time to time, all the Benefit Plans as set forth in
    the Company Disclosure Schedule. The obligations of this
    <U>Section&#160;5.18</U> shall survive the Closing
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (b)&#160;For a period of 18&#160;months following the Closing,
    Parent shall cause the Surviving Corporation and its
    subsidiaries to provide the active employees of the Surviving
    Corporation and its subsidiaries with base salary or base wages,
    as applicable, and employee benefits that are in the aggregate
    no less favorable than the salary, wages and employee benefits
    (excluding any stock purchase plans and other equity-based
    benefits, defined benefit plans and retiree medical benefits)
    being provided to such active employees of the Company and its
    subsidiaries as of the date hereof.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (c)&#160;Except as set forth in the Agreement, at or following
    the Effective Time, the Surviving Corporation and its
    subsidiaries shall honor, and shall continue to be obligated to
    perform, in accordance with their terms as in effect from time
    to time, all benefit obligations to, and contractual rights of,
    former employees of the Company, as well as all employment,
    severance, deferred compensation, split dollar, supplemental
    retirement or
    <FONT style="white-space: nowrap">&#147;change-in-control&#148;</FONT>
    agreements, plans or policies of the Company as in effect from
    time to time.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (d)&#160;Employees of the Company who remain employed by the
    Surviving Corporation and its subsidiaries (or a successor
    thereto) following consummation of the Merger whose employment
    is terminated following the Effective Time shall be entitled to
    receive severance payments and benefits in accordance with the
    severance plans and benefits as in effect from time to time
    provided by the Surviving Corporation and its subsidiaries to
    its former employees.
</DIV>
<A name='576'>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    5.19&#160;&#160;<I><U>Warren Charitable Contributions</U></I>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    During the three year period immediately following the Closing,
    the Surviving Corporation and any successor shall and the Parent
    shall cause the Surviving Corporation to, at a minimum,
    contribute to charitable organizations that serve the Warren,
    Pennsylvania area/community on a basis consistent with past
    practices of the Company and its subsidiaries.
</DIV>
<A name='577'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <FONT style="font-family: 'Times New Roman', Times">ARTICLE&#160;6
    </FONT>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <FONT style="font-family: 'Times New Roman', Times">CONDITIONS
    TO CONSUMMATION OF THE MERGER
    </FONT>
</DIV>
</A>
<A name='578'>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    6.01&#160;&#160;<I><U>Conditions to the Obligations of Each
    Party</U></I>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The respective obligations of the Company, Parent and Merger Sub
    to consummate the Merger are subject to the satisfaction, at or
    before the Effective Time, of each of the following conditions:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (a)&#160;<U>Company Shareholder Approval</U>. This Agreement
    shall have been adopted by the shareholders of the Company in
    accordance with the DGCL, the Company&#146;s certificate of
    incorporation and its bylaws.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (b)&#160;<U>No Orders and Injunctions</U>. No Governmental
    Entity shall have enacted, issued, promulgated, enforced or
    entered any law, rule, regulation, executive order or decree,
    judgment, injunction, ruling or other order, whether temporary,
    preliminary or permanent (collectively,
    &#147;<U>Order</U>&#148;), that is then in effect and has the
    effect of preventing or prohibiting consummation of the Merger
    or otherwise imposing material limitations on the ability of
    Merger Sub and Parent effectively to acquire or hold the
    business of the Company and its subsidiaries; provided, however,
    that each of the parties hereto shall use their commercially
    reasonable efforts to have any such Order vacated.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (c)&#160;<U>Regulatory Approvals</U>. All regulatory approvals
    or waivers required to consummate the Transactions (including
    under the HSR Act) shall have been obtained and shall remain in
    full force and effect and all statutory waiting periods in
    respect thereof shall have expired.
</DIV>

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    <BR>
    A-32
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->
<A name='579'>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    6.02&#160;&#160;<I><U>Conditions to Obligations of Merger Sub
    and Parent</U></I>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The obligations of each of Merger Sub and Parent to consummate
    the Merger are subject to the satisfaction, at or before the
    Effective Time, of each of the following additional conditions,
    unless waived by Parent, acting under the direction of its board
    of directors, in writing prior to the Effective Time:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (a)&#160;<U>Representations and Warranties</U>. The Identified
    Company Representations (as defined below) shall be true and
    correct in all respects and all other representations and
    warranties of the Company set forth in this Agreement shall be
    true and correct in all material respects (i)&#160;as of the
    date of this Agreement and (ii)&#160;as of the Closing Date as
    though then made on and as of the Closing Date, except for those
    representations and warranties that address matters only as of a
    particular date (in which case such Identified Company
    Representations shall be true and correct as of such date and
    all other such representations and warranties shall be true and
    correct in all material respects as of such date); provided
    that, in the event of a breach of a representation or warranty
    other than an Identified Company Representation, the condition
    set forth in this <U>Section&#160;6.02(a)</U> shall be deemed
    satisfied unless the effect of all such breaches of
    representations and warranties taken together has had, or could
    reasonably be expected to have, a Company Material Adverse
    Effect. &#147;<U>Identified Company Representations</U>&#148;
    means (i)&#160;any representation or warranty of the Company
    qualified by Company Material Adverse Effect,
    (ii)&#160;representations or warranties of the Company as to the
    performance by the Company of its obligations under this
    Agreement and (iii)&#160;the representations and warranties of
    the Company set forth in <U>Section&#160;3.03(a)</U>,
    <U>Section&#160;3.04</U>, <U>Section&#160;3.10</U>,
    <U>Section&#160;3.20</U>, <U>Section&#160;3.28</U> and
    <U>Section&#160;3.29</U>, other than unintentional inaccuracies
    in the representations and warranties referred to in this
    clause&#160;(iii) that would result in an increase in the
    aggregate Merger Consideration payable by Parent and Merger Sub
    in an amount not to exceed $350,000.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (b)&#160;<U>Covenants and Agreements</U>. The Company shall
    have, in all material respects, performed all obligations and
    complied with all agreements and covenants required to be
    performed by it or complied with by it under this Agreement at
    or prior to the Effective Time.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (c)&#160;<U>No Company Material Adverse Effect</U>. Since
    December&#160;31, 2005, no effect, event or change shall have
    occurred which has had, or would reasonably be expected to have,
    a Company Material Adverse Effect, whether or not such effect,
    event or change shall have been disclosed on the Deferred
    Schedules (other than any such effect, event or change which was
    included in the SEC Reports filed on or prior to the date
    hereof).
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (d)&#160;<U>Dissenters</U>. The holders of not more than 15% of
    the outstanding Common Shares shall have demanded appraisal of
    their Common Shares in accordance with the DGCL.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (e)&#160;<U>Officers&#146; Certificate</U>. At the Closing, the
    Company shall deliver an Officers&#146; Certificate, duly
    executed by the Company&#146;s Chief Executive Officer and Chief
    Financial Officer and dated as of the Closing Date, stating that
    the conditions to Closing set forth in
    <U>Sections&#160;6.02(a)</U>and <U>(b) </U>above have been
    satisfied.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (f)&#160;<U>Certified Copies</U>. At the Closing, the Company
    shall deliver certified copies of (i)&#160;the resolutions duly
    adopted by the Company Board authorizing the execution, delivery
    and performance of this Agreement and the Transactions,
    (ii)&#160;the resolutions duly adopted by the Company&#146;s
    shareholders adopting this Agreement and (iii)&#160;the
    certificate of incorporation and the bylaws of the Company as
    then in effect immediately prior to the Effective Time.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (g)&#160;<U>Director Resignations</U>. At the Closing, the
    Company shall deliver signed letters of resignation from each
    director of the Company and each of its subsidiaries pursuant to
    which each such director resigns from his or her position as a
    director of the Company or such subsidiary and makes such
    resignation effective at or prior to the Effective Time.
</DIV>
<A name='580'>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    6.03&#160;&#160;<I><U>Conditions to Obligations of the
    Company</U></I>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The obligations of the Company to consummate the Merger are
    subject to the satisfaction, at or before the Effective Time, of
    each of the following additional conditions, unless waived by
    the Company in writing prior to the Effective Time:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (a)&#160;<U>Representations and Warranties</U>. The
    representations and warranties of Parent and Merger Sub set
    forth in this Agreement shall be true and correct in all
    material respects (i)&#160;as of the date of this Agreement and
    (ii)&#160;as of the Closing Date as though then made on and as
    of the Closing Date, except for those representations and
    warranties
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    A-33
</DIV><!-- END LOGICAL PAGE -->
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    that address matters only as of a particular date (in which case
    such representations and warranties shall be true and correct in
    all material respects as of such date); provided that, in the
    event of a breach of a representation or warranty, the condition
    set forth in this <U>Section&#160;6.03(a)</U> shall be deemed
    satisfied unless the effect of all such breaches of
    representations and warranties taken together has had, or could
    reasonably be expected to have, a Purchaser Material Adverse
    Effect.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (b)&#160;<U>Covenants and Agreements</U>. Each of Merger Sub and
    Parent shall have, in all material respects, performed all
    obligations and complied with all agreements and covenants
    required to be performed by them or complied with by them under
    this Agreement at or prior to the Effective Time.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (c)&#160;<U>Certified Copies</U>. At the Closing, Merger Sub and
    Parent shall deliver certified copies of (i)&#160;the
    resolutions duly adopted by each of Merger Sub&#146;s and
    Parent&#146;s boards of directors authorizing the execution,
    delivery and performance of this Agreement and the Transactions,
    (ii)&#160;the resolutions duly adopted by Merger Sub&#146;s
    shareholder approving this Agreement and the Transactions and
    (iii)&#160;the certificate of incorporation and bylaws of each
    of Merger Sub and Parent, in each case, as then in effect
    immediately prior to the Effective Time.
</DIV>
<A name='581'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <FONT style="font-family: 'Times New Roman', Times">ARTICLE&#160;7
    </FONT>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <FONT style="font-family: 'Times New Roman', Times">TERMINATION
    </FONT>
</DIV>
</A>
<A name='582'>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    7.01&#160;&#160;<I><U>Termination by Mutual Consent</U></I>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    This Agreement may be terminated and the Merger and other
    Transactions may be abandoned at any time prior to the Effective
    Time by the mutual written consent of the Company, on the one
    hand, and Parent and Merger Sub, on the other.
</DIV>
<A name='583'>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    7.02&#160;&#160;<I><U>Termination by Merger Sub, Parent or the
    Company</U></I>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    This Agreement may be terminated and the Merger and other
    Transactions may be abandoned at any time prior to the Effective
    Time by Merger Sub and Parent, on the one hand, or the Company,
    on the other hand, if:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (a)&#160;any Governmental Entity shall have issued an Order
    (which has not been vacated, withdrawn or overturned)
    permanently restraining, enjoining or otherwise prohibiting the
    acceptance for payment of, or payment for, the Common Shares
    pursuant to the Merger and such Order shall have become final
    and nonappealable; provided, however, that the right to
    terminate this Agreement pursuant to this
    <U>Section&#160;7.02(a)</U> shall not be available to any party
    that has failed to perform its obligations under
    <U>Section&#160;5.08</U> or the proviso contained in
    <U>Section&#160;6.01(b)</U>;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (b)&#160;the Merger shall not have been consummated on or before
    the six-month anniversary of the date of this Agreement (the
    &#147;<U>Expiration Date</U>&#148;) or if events have occurred
    which have made it impossible to satisfy on or before the
    Expiration Date a condition precedent to the terminating
    party&#146;s obligations to consummate the Transactions;
    provided, however, that the right to terminate this Agreement
    under this <U>Section&#160;7.02(b)</U> shall not be available to
    any party whose failure to perform any covenant or obligation
    under this Agreement has been the cause of or resulted in the
    failure of the Merger to occur on or before the Expiration Date;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (c)&#160;there shall be any Law that makes consummation of the
    Merger illegal or otherwise prohibited;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (d)&#160;the Shareholder Approval shall not have been obtained
    by reason of the failure to obtain the required vote at the
    Shareholder Meeting or at any adjournment or postponement
    thereof or by written consent;&#160;or
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (e)&#160;the Merger shall not have been consummated on or prior
    to the Expiration Date as a result of (i)&#160;a breach by
    Merger Sub or Parent in any of their respective covenants or
    other agreements set forth in this Agreement such that the
    closing conditions set forth in <U>Section&#160;6.03(b)</U>
    would not be satisfied or (ii)&#160;a breach by Merger Sub or
    Parent in any of their respective representations or warranties
    contained in this Agreement such that the closing condition set
    forth in <U>Section&#160;6.03(a)</U> would not be satisfied and,
    in the case of both (i)&#160;and (ii), such breach or failure to
    perform is not cured within 30&#160;days after receipt by Merger
    Sub and Parent of written notice thereof (in which event either
    party may terminate this Agreement upon the first to occur of
    (A)&#160;the Expiration Date and (B)&#160;30&#160;days following
    the satisfaction of each of the conditions set forth in
    <U>Section&#160;6.01</U> and <U>Section&#160;6.02</U> hereof).
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    A-34
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->
<A name='584'>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    7.03&#160;&#160;<I><U>Termination by Merger Sub and
    Parent</U></I>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    This Agreement may be terminated and the Merger and other
    Transactions may be abandoned at any time prior to the Effective
    Time by Merger Sub and Parent if:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (a)&#160;(i)&#160;the Company shall have breached any of its
    covenants or other agreements set forth in this Agreement such
    that the closing conditions set forth in
    <U>Section&#160;6.02(b)</U> would not be satisfied or
    (ii)&#160;there exists a breach of any representation or
    warranty of the Company contained in this Agreement such that
    the closing condition set forth in
    <U>Section&#160;6.02(a)</U>&#160;would not be satisfied and, in
    the case of both (i)&#160;and (ii)&#160;(other than
    (x)&#160;with respect to any breach of <U>Section&#160;5.09</U>
    hereof, (y)&#160;with respect to the covenants which set forth
    the timeframe for which the Proxy Statement must be filed with
    the SEC, the mailing of the Proxy Statement to the
    Company&#146;s shareholders, and the holding of the Shareholders
    Meeting in <U>Section&#160;5.02</U> (provided such delay is not
    caused by Parent or Merger Sub or any Governmental Entity), or
    (z)&#160;with respect to the timeframe within which the Company
    must deliver the Deferred Schedules, for which, in each case,
    there shall be no cure period), such breach is not cured within
    30&#160;days after receipt by the Company of written notice
    thereof;&#160;or
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (b)&#160;(i)&#160;the Company Board withdraws, modifies or
    changes in a manner adverse to Merger Sub and Parent its
    approval and favorable recommendation of this Agreement and the
    Merger, (ii)&#160;the Company Board fails to reconfirm such
    approval and favorable recommendation within two business days
    after a written request by Merger Sub and Parent to do so,
    (iii)&#160;the Company Board shall have approved or recommended
    to the shareholders of the Company, taken no position with
    respect to, or failed to recommend against acceptance of, any
    Acquisition Proposal, (iv)&#160;the Company fails to call the
    Shareholders Meeting within 35&#160;days of mailing the
    definitive Proxy Statement or fails to mail the Proxy Statement
    within five days after being cleared by the SEC or fails to
    include in such statement the favorable recommendation referred
    to above or (v)&#160;the Company or the Company Board resolves
    to do any of the foregoing.
</DIV>
<A name='585'>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    7.04&#160;&#160;<I><U>Termination by the Company</U></I>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    This Agreement may be terminated and the Merger and other
    Transactions may be abandoned by the Company&#160;if:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (a)&#160;(i)&#160;at any time prior to the Effective Time,
    Merger Sub or Parent shall have breached any of their respective
    covenants or other agreements set forth in this Agreement such
    that the closing conditions set forth in
    <U>Section&#160;6.03(b)</U> would not be satisfied or
    (ii)&#160;there exists a breach of any representation or
    warranty of Parent or Merger Sub contained in this Agreement
    such that the closing condition set forth in
    <U>Section&#160;6.03(a)</U>&#160;would not be satisfied and, in
    the case of both (i)&#160;and (ii), such breach or failure to
    perform is not cured within 30&#160;days after receipt by Merger
    Sub and Parent of written notice thereof;&#160;or
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (b)&#160;at any time prior to the approval of this Agreement by
    the shareholders of the Company, pursuant to and in accordance
    with <U>Section&#160;5.09(b)</U> (provided that the Company
    shall have complied with the provisions of
    <U>Section&#160;5.09</U>, including, without limitation, the
    notice provisions therein, and shall have concurrently with such
    termination made all payments to Merger Sub and Parent required
    by <U>Section&#160;8.01</U>).
</DIV>
<A name='586'>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    7.05&#160;&#160;<I><U>Effect of Termination</U></I>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In the event of the termination of this Agreement and
    abandonment of the Merger and other Transactions pursuant to
    this <U>Article&#160;7</U>, this Agreement shall forthwith
    become null and void and have no effect, without any liability
    on the part of any party or its officers, directors,
    shareholders, affiliates and agents, other than the provisions
    of <U>Sections&#160;5.04, 7.05</U>, <U>8.01</U>, <U>8.02, and
    8.07</U>; provided that, except as otherwise provided in this
    <U>Article&#160;7</U>, a party shall not be relieved from any
    liability for fraud or for any knowing or willful breach of any
    of its covenants, representations or warranties contained in
    this Agreement. Except as otherwise provided in this Agreement,
    no party shall be entitled to terminate this Agreement if such
    party is then in material breach of this Agreement.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    A-35
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->
<A name='587'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <FONT style="font-family: 'Times New Roman', Times">ARTICLE&#160;8
    </FONT>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <FONT style="font-family: 'Times New Roman', Times">MISCELLANEOUS
    </FONT>
</DIV>
</A>
<A name='588'>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    8.01&#160;&#160;<I><U>Payment of Fees and Expenses</U></I>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (a)&#160;Except as provided in <U>Section&#160;5.03</U> or
    elsewhere in the Agreement, each of the parties hereto shall
    bear their own Expenses (as defined below) incurred by or on
    behalf of such party in preparing for, entering into and
    carrying out this Agreement and the consummation of the Merger
    and the financing of the Transactions.
    &#147;<U>Expenses</U>&#148; as used in this Agreement shall
    include all expenses (including, without limitation, all fees
    and expenses of outside counsel, investment bankers, banks,
    other financial institutions, accountants, financial printers,
    experts and consultants to a party hereto) incurred by a party
    or on its behalf in connection with or related to the
    investigation, due diligence examination, authorization,
    preparation, negotiation, execution, performance and enforcement
    of this Agreement and the Transactions and the financing thereof
    and all other matters contemplated by this Agreement and the
    closing thereof.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (b)&#160;If this Agreement is terminated (i)&#160;by the Company
    or by Parent pursuant to <U>Section&#160;7.02(b)</U> or
    <U>Section&#160;7.02(d)</U> and prior to such termination an
    Acquisition Proposal shall have been made to the Company or any
    of its subsidiaries or any person shall have publicly announced
    an intention (whether or not conditional) to make an Acquisition
    Proposal with respect to the Company or any of its subsidiaries,
    (ii)&#160;by Parent and Merger Sub pursuant to
    <U>Section&#160;7.03(b)</U> or (iii)&#160;by the Company
    pursuant to <U>Section&#160;7.04(b)</U>, then, in any such case
    (i), (ii)&#160;or (iii), (A)&#160;if the Company terminates this
    Agreement prior to the expiration of the Go-Shop Period (plus,
    if the Five Day Period described in the last sentence of
    <U>Section&#160;5.09(c)</U> is then pending upon the expiration
    of the Go-Shop Period, an additional number of business days
    until the expiration of such Five Day Period), concurrently with
    any such termination, the Company shall pay to Merger Sub and
    Parent the Go-Shop Break Up Fee (as defined below) plus their
    reasonable Expenses and (B)&#160;otherwise, concurrently with
    any such termination of this Agreement, the Company shall pay to
    Merger Sub and Parent the Break Up Fee (as defined below) plus
    their actual reasonable Expenses. &#147;<U>Break Up
    Fee</U>&#148; means cash in immediately available funds in an
    amount equal to 3.5% of the sum of (A)&#160;the Merger
    Consideration multiplied by the number of Common Shares issued
    and outstanding as of the date hereof (including the number of
    shares of unvested restricted Common Shares outstanding as of
    the date hereof) and (B)&#160;the number of Cash-Pay Options
    issued and outstanding as of the date hereof multiplied by the
    difference between the Merger Consideration and the weighted
    average exercise price of the issued and outstanding Cash-Pay
    Options as of the date hereof. &#147;<U>Go-Shop Break Up
    Fee</U>&#148; shall have the meaning set forth in the definition
    of the term &#147;Break Up Fee&#148;; provided that for purposes
    of the definition of &#147;Go-Shop Break Up Fee&#148; the
    reference to 3.5% in the definition of Break Up Fee shall be
    deemed to be &#147;2.0%&#148;.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (c)&#160;If this Agreement is terminated (i)&#160;by any of the
    parties pursuant to <U>Section&#160;7.02(e)</U> or (ii)&#160;by
    the Company pursuant to <U>Section&#160;7.04(a)</U>, then, in
    any such case (i)&#160;or (ii), concurrently with any such
    termination of this Agreement, Parent shall pay to the Company
    an amount in cash equal to the Break Up Fee.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (d)&#160;If this Agreement is terminated pursuant to
    <U>Section&#160;7.03(a) </U>or, in the event no Break Up Fee is
    payable pursuant to <U>Section&#160;8.01(b)(i)</U> in connection
    therewith, any termination of this Agreement pursuant to
    <U>Section&#160;7.02(d)</U>, then, in any such case,
    concurrently with any such termination of this Agreement, the
    Company shall pay all of the actual, reasonable Expenses of
    Parent and Merger Sub (the &#147;<U>Expense
    Reimbursement</U>&#148;).
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (e)&#160;All amounts payable by either party to the other under
    this <U>Section&#160;8.01</U> shall be paid in cash and in
    immediately available funds to such account as the recipient may
    designate in writing to the payor.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (f)&#160;The parties agree that the agreements contained in this
    <U>Section&#160;8.01</U> are an integral part of the
    Transactions and constitute liquidated damages and not a
    penalty. Notwithstanding anything in this Agreement to the
    contrary, each of the parties agrees that payment of the Break
    Up Fee and the Expense Reimbursement pursuant to
    <U>Sections&#160;8.01(b)</U>, <U>(c)</U> and <U>(d)</U> above,
    as applicable, if such payments are payable and actually paid,
    shall be the sole and exclusive remedy of each of the parties
    upon the termination of this Agreement in the circumstances
    described in <U>Article&#160;7</U>.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    A-36
</DIV><!-- END LOGICAL PAGE -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->
<A name='589'>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    8.02&#160;&#160;<I><U>Survival</U></I>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The representations, warranties and agreements made in this
    Agreement shall not survive beyond the Effective Time or the
    termination of this Agreement in accordance with
    <U>Article&#160;7</U> hereof. Notwithstanding the foregoing, the
    agreements set forth in <U>Articles&#160;1</U> and <U>2</U> and
    <U>Sections&#160;5.04, 5.07, 5.18, 5.19</U> and
    <U>Article&#160;8</U> shall survive the Effective Time and those
    set forth in <U>Section&#160;7.05</U> shall survive termination.
</DIV>
<A name='590'>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    8.03&#160;&#160;<I><U>Modification or Amendment</U></I>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    This Agreement may be amended by the parties hereto at any time
    before or after approval of this Agreement by the shareholders
    of the Company; provided, however, that after any such approval,
    there shall not be made any amendment that by Law requires the
    further approval by such shareholders without such further
    approval. Without limiting the foregoing, this Agreement may not
    be amended or modified except by an instrument in writing signed
    by all of the parties.
</DIV>
<A name='591'>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    8.04&#160;&#160;<I><U>Entire Agreement; Assignment</U></I>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    This Agreement (including the documents and the instruments
    referred to herein) constitutes the entire agreement and
    supersedes all prior agreements and understandings, both written
    and oral, among the parties with respect to the subject matter
    hereof and thereof. Neither this Agreement nor any of the
    rights, interests or obligations hereunder will be assigned by
    any of the parties hereto (whether by operation of Law or
    otherwise) without the prior written consent of the other party
    (except that each of Parent and Merger Sub may assign its
    rights, interests and obligations to any of their respective
    affiliates or direct or indirect subsidiaries without the
    consent of the Company, so long as they remain primarily
    obligated with respect to any such delegated obligation).
    Subject to the preceding sentence, this Agreement will be
    binding upon, inure to the benefit of and be enforceable by the
    parties and their respective successors and assigns.
</DIV>
<A name='592'>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    8.05&#160;&#160;<I><U>Validity</U></I>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The invalidity or unenforceability of any provision of this
    Agreement shall not affect the validity or enforceability of any
    other provision of this Agreement, each of which shall remain in
    full force and effect.
</DIV>
<A name='593'>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    8.06&#160;&#160;<I><U>Notices</U></I>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    All notices, requests, claims, demands and other communications
    hereunder shall be in writing and shall be deemed to have been
    duly given when delivered in person, by overnight courier or
    telecopier to the respective parties as follows:
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If to Parent or Merger Sub:
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Appleseed&#146;s Topco, Inc.
</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    BLR Acquisition Corp.
</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    c/o&#160;Golden Gate Private Equity, Inc.
</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    One Embarcadero Center, 33rd&#160;Floor
</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    San&#160;Francisco, CA 94111
</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Attention: David Dominik and Stefan Kaluzny
</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Facsimile No.:
    <FONT style="white-space: nowrap">(415)&#160;627-4501</FONT>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    with a copy to:
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Kirkland&#160;&#38; Ellis LLP
</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    200 East Randolph Drive
</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Chicago, IL 60601
</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Attention: Gary M. Holihan,&#160;P.C.
</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Facsimile No.:
    <FONT style="white-space: nowrap">(312)&#160;861-2200</FONT>
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    A-37
</DIV><!-- END LOGICAL PAGE -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 4%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <FONT style="font-family: 'Times New Roman', Times">If to the
    Company:<BR>
    </FONT>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Blair Corporation
</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    220 Hickory Street
</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Warren, PA 16366
</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Attention: Chief Executive Officer
</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Facsimile No.:
    <FONT style="white-space: nowrap">(814)&#160;726-6303</FONT>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    with a copy to:
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Patton Boggs LLP
</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    2550 M Street, N.W.
</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Washington, DC 20037
</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Attention: Philip G. Feigen,&#160;Esq.
</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Facsimile No.:
    <FONT style="white-space: nowrap">(202)&#160;457-6315</FONT>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    or to such other address as the person to whom notice is given
    may have previously furnished to the other in writing in the
    manner set forth above; provided that notice of any change of
    address shall be effective only upon receipt thereof.
</DIV>
<A name='594'>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    8.07&#160;&#160;<I><U>Governing Law; Submission to Jurisdiction;
    Waiver</U></I>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (a)&#160;This Agreement shall be governed by and construed in
    accordance with the laws of the State of Delaware, regardless of
    the laws that might otherwise govern under applicable principles
    of conflicts of laws thereof.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (b)&#160;Each of the Company, Parent and Merger Sub irrevocably
    agrees that any legal action or proceeding arising out of or
    relating to this Agreement or any of the Transactions shall be
    brought and determined in any federal court located in the State
    of Delaware or any Delaware state court, and each of the
    Company, Parent and Merger Sub hereby irrevocably submits with
    regard to any such action or proceeding for itself and in
    respect to its property, generally and unconditionally, to the
    exclusive jurisdiction of the aforesaid courts. Each of the
    Company, Parent and Merger Sub hereby irrevocably waives, and
    agrees not to assert, by way of motion, as a defense,
    counterclaim or otherwise, in any such action or proceeding,
    (i)&#160;any claim that it is not personally subject to the
    jurisdiction of the above-named courts for any reason other than
    the failure to lawfully serve process, (ii)&#160;that it or its
    property is exempt or immune from jurisdiction of such court or
    from any legal process commenced in such court (whether through
    service of notice, attachment prior to judgment, attachment in
    aid of execution of judgment, execution of judgment or
    otherwise), and (iii)&#160;that (A)&#160;such action or
    proceeding in such court is brought in an inconvenient forum,
    (B)&#160;the venue of such action or proceeding is improper or
    (C)&#160;this Agreement, the Transactions or the subject matter
    hereof or thereof, may not be enforced in or by such court.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (c)&#160;EACH OF THE COMPANY, PARENT AND MERGER SUB HEREBY
    IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY
    ACTION OR PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT
    OR THE TRANSACTIONS.
</DIV>
<A name='595'>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    8.08&#160;&#160;<I><U>Descriptive Headings</U></I>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The descriptive headings herein are inserted for convenience of
    reference only and are not intended to be part of or to affect
    the meaning or interpretation of this Agreement.
</DIV>
<A name='596'>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    8.09&#160;&#160;<I><U>Counterparts</U></I>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    This Agreement may be executed in two or more counterparts, each
    of which shall be deemed to be an original, but all of which
    shall constitute one and the same agreement, and any one of
    which may be delivered by facsimile.
</DIV>
<A name='597'>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    8.10&#160;&#160;<I><U>Certain Definitions</U></I>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As used in this Agreement:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (a)&#160;the term &#147;<U>affiliate</U>,&#148; as applied to
    any person, shall mean any other person directly or indirectly
    controlling, controlled by, or under common control with, that
    person. For the purposes of this definition, &#147;control&#148;
    (including, with correlative meanings, the terms
    &#147;controlling,&#148; &#147;controlled by&#148; and
    &#147;under common control with&#148;), as applied to any
    person, means the possession, directly or indirectly, of the
    power to direct or
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    A-38
</DIV><!-- END LOGICAL PAGE -->
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    cause the direction of the management and policies of that
    person, whether through the ownership of voting securities, by
    contract or otherwise;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (b)&#160;the term &#147;<U>knowledge</U>,&#148; of any person
    which is not an individual means the actual knowledge of such
    person&#146;s directors and executive officers;
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (c)&#160;the term &#147;<U>Person</U>&#148; or
    &#147;<U>person</U>&#148; shall include individuals,
    corporations, partnerships, trusts, other entities and groups
    (which term shall include a &#147;group&#148; as such term is
    defined in Section&#160;13(d)(3) of the Exchange Act);&#160;and
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (d)&#160;the term &#147;<U>subsidiary</U>&#148; or
    &#147;<U>subsidiaries</U>&#148; means, with respect to any
    Person, any corporation, partnership, joint venture or other
    legal entity of which such Person (either alone or through or
    together with any other subsidiary), owns, directly or
    indirectly, more than 50% of the stock or other equity or
    beneficial interests, the holders of which are generally
    entitled to vote for the election of the board of directors or
    other governing body of such corporation or other legal entity.
</DIV>
<A name='598'>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    8.11&#160;&#160;<I><U>Specific Performance</U></I>
</DIV>
</A>
<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Except as specifically provided in Article&#160;7 hereof, the
    parties hereto agree that irreparable damage would occur in the
    event that any of the provisions of this Agreement were not
    performed in accordance with their specific terms or were
    otherwise breached. Accordingly, except as specifically provided
    in Article&#160;7 hereof in the circumstances enumerated
    therein, it is accordingly agreed that the parties shall be
    entitled to an injunction or injunctions to prevent breaches of
    this Agreement and to enforce specifically the terms and
    provisions hereof in any court of the United States or any state
    having jurisdiction, this being in addition to any other remedy
    to which they are entitled at law or in equity.
</DIV>
<A name='599'>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    8.12&#160;&#160;<I><U>Company Disclosure Schedule</U></I>
</DIV>
</A>
<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Any disclosure made with reference to one or more sections of
    the Company Disclosure Schedule shall be deemed disclosed only
    with respect to such section unless such disclosure is made in
    such a way as to make its relevance to the information called
    for by another section of the Company Disclosure Schedule
    readily apparent in which case, such disclosure shall be deemed
    to have been included in such other section, notwithstanding the
    omission of a cross reference thereto.
</DIV>
<A name='600'>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    8.13&#160;&#160;<I><U>Extension; Waiver</U></I>
</DIV>
</A>
<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    At any time prior to the Effective Time, a party may
    (a)&#160;extend the time for the performance of any of the
    obligations or other acts of the other party, (b)&#160;waive any
    inaccuracies in the representations and warranties of the other
    party contained in this Agreement or in any document delivered
    pursuant to this Agreement or (c)&#160;subject to the proviso in
    <U>Section&#160;8.03</U>, waive compliance by the other party
    with any of the agreements or conditions contained in this
    Agreement. Any agreement on the part of a party to any such
    extension or waiver shall be valid only if set forth in an
    instrument in writing signed on behalf of such party. The
    failure of any party to this Agreement to assert any of its
    rights under this Agreement or otherwise shall not constitute a
    waiver of such rights.
</DIV>
<A name='601'>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    8.14&#160;&#160;<I><U>Third-Party Beneficiaries</U></I>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Except for the provisions of <U>Sections&#160;5.07</U>, this
    Agreement is not intended to confer upon any person other than
    the parties hereto any rights or remedies.
</DIV>
<A name='602'>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    8.15&#160;&#160;<I><U>Severability</U></I>
</DIV>
</A>
<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If any term or other provision of this Agreement is invalid,
    illegal or incapable of being enforced by any rule of law or
    public policy, unless the effects of such invalidity, illegality
    or unenforceability would prevent the parties from realizing the
    major portion of the economic benefits of the Merger that they
    currently anticipate obtaining therefrom, all other conditions
    and provisions of this Agreement shall nevertheless remain in
    full force and effect. Upon such determination that any term or
    other provision is invalid, illegal or incapable of being
    enforced, the parties hereto shall negotiate in good faith to
    modify this Agreement so as to effect the original intent of the
    parties as closely as possible to the fullest extent permitted
    by applicable Law in an acceptable manner to the end that the
    Transactions are fulfilled to the extent possible.
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    * * * * *
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    A-39
</DIV><!-- END LOGICAL PAGE -->
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    IN WITNESS WHEREOF, each of the parties has caused this
    Agreement and Plan of Merger to be executed on its behalf by its
    respective officer thereunto duly authorized, all as of the day
    and year first above written.
</DIV>

<DIV style="margin-top: 24pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 49%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    BLAIR CORPORATION
</DIV>

<DIV style="margin-top: 48pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 49%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="49%"></TD>
    <TD width="4%"></TD>
    <TD width="47%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    By:&#160;
</TD>
    <TD valign="bottom" align="left">
    <DIV style="display:inline; text-align:center; width:90%">/s/&#160;&#160;AL
    LOPEZ</DIV><BR>
    <DIV style="font-size: 2pt; margin-left: 0%; width: 100%; align: left; border-bottom: 1pt solid #000000"></DIV><!-- callerid=115 iwidth=211 length=0 -->Name:&#160;Al
    Lopez<BR>
    Title:&#160;&#160;&#160;President and Chief Executive Officer
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 24pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 49%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    BLR ACQUISITION CORP.
</DIV>

<DIV style="margin-top: 48pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 49%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="49%"></TD>
    <TD width="4%"></TD>
    <TD width="47%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    By:&#160;
</TD>
    <TD valign="bottom" align="left">
    <DIV style="display:inline; text-align:center; width:90%">/s/&#160;&#160;NEALE
    ATTENBOROUGH</DIV><BR>
    <DIV style="font-size: 2pt; margin-left: 0%; width: 100%; align: left; border-bottom: 1pt solid #000000"></DIV><!-- callerid=115 iwidth=211 length=0 -->Name:&#160;Neale
    Attenborough<BR>
    Title:&#160;&#160;&#160;Vice President
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 24pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 49%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    APPLESEED&#146;S TOPCO, INC.
</DIV>

<DIV style="margin-top: 48pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 49%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="49%"></TD>
    <TD width="4%"></TD>
    <TD width="47%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    By:&#160;
</TD>
    <TD valign="bottom" align="left">
    <DIV style="display:inline; text-align:center; width:90%">/s/&#160;&#160;NEALE
    ATTENBOROUGH</DIV><BR>
    <DIV style="font-size: 2pt; margin-left: 0%; width: 100%; align: left; border-bottom: 1pt solid #000000"></DIV><!-- callerid=115 iwidth=211 length=0 -->Name:&#160;Neale
    Attenborough<BR>
    Title:&#160;&#160;&#160;Chief Executive Officer
</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    A-40
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="right" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">APPENDIX&#160;B</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <FONT style="font-family: 'Times New Roman', Times">January&#160;22,
    2007
    </FONT>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Board of Directors
</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Blair Corporation
</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    220 Hickory Street
</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Warren, PA 16366
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Ladies and Gentlemen:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We have acted as your financial advisor in connection with the
    proposed merger of Blair Corporation (the &#147;Company&#148;)
    and Appleseed&#146;s Topco, Inc., a subsidiary of Golden Gate
    Capital (&#147;Appleseed&#146;s&#148;) in a transaction (the
    &#147;Transaction&#148;) in which Appleseed&#146;s will pay to
    the Company&#146;s shareholders $42.50&#160;per share in cash
    (the &#147;Consideration&#148;). The terms and conditions of the
    Transaction are more fully set forth in the merger agreement.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    You have requested our opinion as to whether the Consideration
    to be received by the Company and its shareholders in the
    Transaction is fair from a financial point of view to the
    disinterested shareholders of the Company. For purposes of this
    opinion, the term &#147;disinterested shareholders&#148; means
    holders of the Company&#146;s one class of publicly traded
    common stock (the &#147;Common Stock&#148;) other than
    (1)&#160;directors, officers and employees of the Company and
    (2)&#160;Appleseed&#146;s, Golden Gate Capital and their
    respective affiliates.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In connection with rendering our opinion we have:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (i)&#160;analyzed certain publicly available financial
    statements and reports regarding the Company;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (ii)&#160;analyzed certain internal financial statements and
    other financial and operating data (including financial
    projections) concerning the Company prepared by management of
    the Company;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (iii)&#160;reviewed the reported prices and trading activity for
    the Common stock;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (iv)&#160;compared the financial performance of the Company and
    the prices and trading activity of the Common Stock with that of
    certain other comparable publicly-traded companies and their
    securities;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (v)&#160;reviewed the financial terms, to the extent publicly
    available, of certain comparable transactions;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (vi)&#160;reviewed the merger agreement and related documents;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (vii)&#160;discussed with management of the Company the
    operations of and future business prospects for the Company and
    the anticipated financial consequences of the Transaction to the
    Company;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (viii)&#160;assisted in your deliberations regarding the
    material terms of the Transaction and your negotiations with
    Appleseed&#146;s;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (ix)&#160;performed such other analyses and provided such other
    services as we have deemed appropriate.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We have relied on the accuracy and completeness of the
    information and financial data provided to us by the Company,
    and our opinion is based upon such information. We have not
    independently verified such information or financial data, and
    we have inquired into the reliability of such information and
    financial data only to the limited extent necessary to provide a
    reasonable basis for our opinion, recognizing that we are
    rendering only an informed opinion and not an appraisal or
    certification of value. With respect to the financial
    projections prepared by management of the Company, we have
    assumed that they have been reasonably prepared on bases
    reflecting management&#146;s best currently available estimates
    and judgments of the future financial performance of the Company.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As part of our investment banking business, we regularly issue
    fairness opinions and are continually engaged in the valuation
    of companies and their securities in connection with business
    reorganizations, private placements, negotiated underwritings,
    mergers and acquisitions and valuations for estate, corporate
    and other purposes. We are familiar with the Company and
    regularly provide investment banking services to it. In the
    ordinary course of business, Stephens Inc. and its affiliates at
    any time may hold long or short positions, and may trade or
    otherwise
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    B-1
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    effect transactions as principal or for the accounts of
    customers, in debt or equity securities or options on securities
    of the Company. Stephens is receiving a fee, and reimbursement
    of its expenses, in connection with the issuance of this
    fairness opinion In addition, the Company has agreed to pay us a
    fee which is contingent on the completion of the Transaction,
    for our services as financial advisor to the Company in
    connection with the Transaction. The Company has also agreed to
    reimburse us for our expenses incurred in connection with our
    services relating to the Transaction and to indemnify us against
    certain claims that might be asserted against us in connection
    therewith.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Based on the foregoing and our general experience as investment
    bankers, and subject to the qualifications stated herein, we are
    of the opinion on the date hereof that the consideration to be
    received by the disinterested shareholders of the Company in the
    Transaction is fair to them from a financial point of view.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    This opinion and a summary discussion of our underlying analyses
    and role as your financial advisor may be included in
    communications to the Company&#146;s shareholders provided that
    we approve of the content of such disclosures prior to
    publication.
</DIV>

<DIV style="margin-top: 24pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Very truly yours,
</DIV>

<DIV style="margin-top: 48pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <DIV style="display:inline; text-align:left;">/s/&#160;&#160;STEPHENS
    INC.</DIV>
</DIV>

<DIV style="font-size: 2pt; margin-left: 0%; width: 49%; align: left; border-bottom: 1pt solid #000000"></DIV><!-- callerid=999 iwidth=455 length=227 -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    STEPHENS INC.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    B-2
</DIV><!-- END LOGICAL PAGE -->
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="right" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">APPENDIX&#160;C</FONT></B>
</DIV>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">SECTION&#160;262
    OF THE GENERAL CORPORATION LAW OF THE STATE OF
    DELAWARE</FONT></B>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">262.&#160;&#160;APPRAISAL
    RIGHTS</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (a)&#160;Any stockholder of a corporation of this State who
    holds shares of stock on the date of the making of a demand
    pursuant to subsection&#160;(d)&#160;of this section with
    respect to such shares, who continuously holds such shares
    through the effective date of the merger or consolidation, who
    has otherwise complied with subsection&#160;(d)&#160;of this
    section and who has neither voted in favor of the merger or
    consolidation nor consented thereto in writing pursuant to
    &#167;&#160;228 of this title shall be entitled to an appraisal
    by the Court of Chancery of the fair value of such
    stockholder&#146;s shares of stock under the circumstances
    described in subsections (b)&#160;and (c)&#160;of this section.
    As used in this section, the word &#147;stockholder&#148; means
    a holder of record of stock in a stock corporation and also a
    member of record of a nonstock corporation; the words
    &#147;stock&#148; and &#147;share&#148; mean and include what is
    ordinarily meant by those words and also membership or
    membership interest of a member of a nonstock corporation; and
    the words &#147;depository receipts&#148; mean a receipt or
    other instrument issued by a depository representing an interest
    in one or more shares or fractions thereof, solely of stock of a
    corporation, which stock is deposited with the depository.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (b)&#160;Appraisal rights shall be available for the shares of
    any class or series of stock of a constituent corporation in a
    merger or consolidation to be effected pursuant to
    &#167;&#160;251 (other than a merger effected pursuant to
    &#167;&#160;251(g) of this title), &#167;&#160;252,
    &#167;&#160;254, &#167;&#160;257, &#167;&#160;258,
    &#167;&#160;263 or &#167;&#160;264 of this title:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (1)&#160;Provided, however, that no appraisal rights under this
    section shall be available for the shares of any class or series
    of stock, which stock, or depository receipts in respect
    thereof, at the record date fixed to determine the stockholders
    entitled to receive notice of and to vote at the meeting of
    stockholders to act upon the agreement of merger or
    consolidation, were either (i)&#160;listed on a national
    securities exchange or designated as a national market system
    security on an interdealer quotation system by the National
    Association of Securities Dealers, Inc. or (ii)&#160;held of
    record by more than 2,000 stockholders; and further provided
    that no appraisal rights shall be available for any shares of
    stock of the constituent corporation surviving a merger if the
    merger did not require for its approval the vote of the
    stockholders of the surviving corporation as provided in
    subsection&#160;(f)&#160;of &#167;&#160;251 of this title.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (2)&#160;Notwithstanding paragraph&#160;(1)&#160;of this
    subsection, appraisal rights under this section shall be
    available for the shares of any class or series of stock of a
    constituent corporation if the holders thereof are required by
    the terms of an agreement of merger or consolidation pursuant to
    &#167;&#167;&#160;251, 252, 254, 257, 258, 263 and 264 of this
    title to accept for such stock anything except:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 8%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    a.&#160;Shares of stock of the corporation surviving or
    resulting from such merger or consolidation, or depository
    receipts in respect thereof;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 8%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    b.&#160;Shares of stock of any other corporation, or depository
    receipts in respect thereof, which shares of stock (or
    depository receipts in respect thereof) or depository receipts
    at the effective date of the merger or consolidation will be
    either listed on a national securities exchange or designated as
    a national market system security on an interdealer quotation
    system by the National Association of Securities Dealers, Inc.
    or held of record by more than 2,000 stockholders;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 8%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    c.&#160;Cash in lieu of fractional shares or fractional
    depository receipts described in the foregoing subparagraphs a.
    and b. of this paragraph;&#160;or
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 8%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    d.&#160;Any combination of the shares of stock, depository
    receipts and cash in lieu of fractional shares or fractional
    depository receipts described in the foregoing subparagraphs a.,
    b. and c. of this paragraph.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (3)&#160;In the event all of the stock of a subsidiary Delaware
    corporation party to a merger effected under &#167;&#160;253 of
    this title is not owned by the parent corporation immediately
    prior to the merger, appraisal rights shall be available for the
    shares of the subsidiary Delaware corporation.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (c)&#160;Any corporation may provide in its certificate of
    incorporation that appraisal rights under this section shall be
    available for the shares of any class or series of its stock as
    a result of an amendment to its certificate of
</DIV>

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    <BR>
    C-1
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    incorporation, any merger or consolidation in which the
    corporation is a constituent corporation or the sale of all or
    substantially all of the assets of the corporation. If the
    certificate of incorporation contains such a provision, the
    procedures of this section, including those set forth in
    subsections (d)&#160;and (e)&#160;of this section, shall apply
    as nearly as is practicable.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (d)&#160;Appraisal rights shall be perfected as follows:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (1)&#160;If a proposed merger or consolidation for which
    appraisal rights are provided under this section is to be
    submitted for approval at a meeting of stockholders, the
    corporation, not less than 20&#160;days prior to the meeting,
    shall notify each of its stockholders who was such on the record
    date for such meeting with respect to shares for which appraisal
    rights are available pursuant to subsections (b)&#160;or
    (c)&#160;hereof that appraisal rights are available for any or
    all of the shares of the constituent corporations, and shall
    include in such notice a copy of this section. Each stockholder
    electing to demand the appraisal of such stockholder&#146;s
    shares shall deliver to the corporation, before the taking of
    the vote on the merger or consolidation, a written demand for
    appraisal of such stockholder&#146;s shares. Such demand will be
    sufficient if it reasonably informs the corporation of the
    identity of the stockholder and that the stockholder intends
    thereby to demand the appraisal of such stockholder&#146;s
    shares. A proxy or vote against the merger or consolidation
    shall not constitute such a demand. A stockholder electing to
    take such action must do so by a separate written demand as
    herein provided. Within 10&#160;days after the effective date of
    such merger or consolidation, the surviving or resulting
    corporation shall notify each stockholder of each constituent
    corporation who has complied with this subsection and has not
    voted in favor of or consented to the merger or consolidation of
    the date that the merger or consolidation has become
    effective,&#160;or
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (2)&#160;If the merger or consolidation was approved pursuant to
    &#167;&#160;228 or &#167;&#160;253 of this title, then either a
    constituent corporation before the effective date of the merger
    or consolidation or the surviving or resulting corporation
    within 10&#160;days thereafter shall notify each of the holders
    of any class or series of stock of such constituent corporation
    who are entitled to appraisal rights of the approval of the
    merger or consolidation and that appraisal rights are available
    for any or all shares of such class or series of stock of such
    constituent corporation, and shall include in such notice a copy
    of this section. Such notice may, and, if given on or after the
    effective date of the merger or consolidation, shall, also
    notify such stockholders of the effective date of the merger or
    consolidation. Any stockholder entitled to appraisal rights may,
    within 20&#160;days after the date of mailing of such notice,
    demand in writing from the surviving or resulting corporation
    the appraisal of such holder&#146;s shares. Such demand will be
    sufficient if it reasonably informs the corporation of the
    identity of the stockholder and that the stockholder intends
    thereby to demand the appraisal of such holder&#146;s shares. If
    such notice did not notify stockholders of the effective date of
    the merger or consolidation, either (i)&#160;each such
    constituent corporation shall send a second notice before the
    effective date of the merger or consolidation notifying each of
    the holders of any class or series of stock of such constituent
    corporation that are entitled to appraisal rights of the
    effective date of the merger or consolidation or (ii)&#160;the
    surviving or resulting corporation shall send such a second
    notice to all such holders on or within 10&#160;days after such
    effective date; provided, however, that if such second notice is
    sent more than 20&#160;days following the sending of the first
    notice, such second notice need only be sent to each stockholder
    who is entitled to appraisal rights and who has demanded
    appraisal of such holder&#146;s shares in accordance with this
    subsection. An affidavit of the secretary or assistant secretary
    or of the transfer agent of the corporation that is required to
    give either notice that such notice has been given shall, in the
    absence of fraud, be prima facie evidence of the facts stated
    therein. For purposes of determining the stockholders entitled
    to receive either notice, each constituent corporation may fix,
    in advance, a record date that shall be not more than
    10&#160;days prior to the date the notice is given, provided,
    that if the notice is given on or after the effective date of
    the merger or consolidation, the record date shall be such
    effective date. If no record date is fixed and the notice is
    given prior to the effective date, the record date shall be the
    close of business on the day next preceding the day on which the
    notice is given.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (e)&#160;Within 120&#160;days after the effective date of the
    merger or consolidation, the surviving or resulting corporation
    or any stockholder who has complied with subsections
    (a)&#160;and (d)&#160;hereof and who is otherwise entitled to
    appraisal rights, may file a petition in the Court of Chancery
    demanding a determination of the value of the stock of all such
    stockholders. Notwithstanding the foregoing, at any time within
    60&#160;days after the effective date of the merger or
    consolidation, any stockholder shall have the right to withdraw
    such stockholder&#146;s demand for appraisal
</DIV>

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    <BR>
    C-2
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    and to accept the terms offered upon the merger or
    consolidation. Within 120&#160;days after the effective date of
    the merger or consolidation, any stockholder who has complied
    with the requirements of subsections (a)&#160;and
    (d)&#160;hereof, upon written request, shall be entitled to
    receive from the corporation surviving the merger or resulting
    from the consolidation a statement setting forth the aggregate
    number of shares not voted in favor of the merger or
    consolidation and with respect to which demands for appraisal
    have been received and the aggregate number of holders of such
    shares. Such written statement shall be mailed to the
    stockholder within 10&#160;days after such stockholder&#146;s
    written request for such a statement is received by the
    surviving or resulting corporation or within 10&#160;days after
    expiration of the period for delivery of demands for appraisal
    under subsection&#160;(d)&#160;hereof, whichever is later.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (f)&#160;Upon the filing of any such petition by a stockholder,
    service of a copy thereof shall be made upon the surviving or
    resulting corporation, which shall within 20&#160;days after
    such service file in the office of the Register in Chancery in
    which the petition was filed a duly verified list containing the
    names and addresses of all stockholders who have demanded
    payment for their shares and with whom agreements as to the
    value of their shares have not been reached by the surviving or
    resulting corporation. If the petition shall be filed by the
    surviving or resulting corporation, the petition shall be
    accompanied by such a duly verified list. The Register in
    Chancery, if so ordered by the Court, shall give notice of the
    time and place fixed for the hearing of such petition by
    registered or certified mail to the surviving or resulting
    corporation and to the stockholders shown on the list at the
    addresses therein stated. Such notice shall also be given by 1
    or more publications at least 1&#160;week before the day of the
    hearing, in a newspaper of general circulation published in the
    City of Wilmington, Delaware or such publication as the Court
    deems advisable. The forms of the notices by mail and by
    publication shall be approved by the Court, and the costs
    thereof shall be borne by the surviving or resulting corporation.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (g)&#160;At the hearing on such petition, the Court shall
    determine the stockholders who have complied with this section
    and who have become entitled to appraisal rights. The Court may
    require the stockholders who have demanded an appraisal for
    their shares and who hold stock represented by certificates to
    submit their certificates of stock to the Register in Chancery
    for notation thereon of the pendency of the appraisal
    proceedings; and if any stockholder fails to comply with such
    direction, the Court may dismiss the proceedings as to such
    stockholder.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (h)&#160;After determining the stockholders entitled to an
    appraisal, the Court shall appraise the shares, determining
    their fair value exclusive of any element of value arising from
    the accomplishment or expectation of the merger or
    consolidation, together with a fair rate of interest, if any, to
    be paid upon the amount determined to be the fair value. In
    determining such fair value, the Court shall take into account
    all relevant factors. In determining the fair rate of interest,
    the Court may consider all relevant factors including the rate
    of interest which the surviving or resulting corporation would
    have had to pay to borrow money during the pendency of the
    proceeding. Upon application by the surviving or resulting
    corporation or by any stockholder entitled to participate in the
    appraisal proceedings, the Court may, in its discretion, permit
    discovery or other pretrial proceedings and may proceed to trial
    upon the appraisal prior to the final determination of the
    stockholder entitled to an appraisal. Any stockholder whose name
    appears on the list filed by the surviving or resulting
    corporation pursuant to subsection&#160;(f)&#160;of this section
    and who has submitted such stockholder&#146;s certificates of
    stock to the Register in Chancery, if such is required, may
    participate fully in all proceedings until it is finally
    determined that such stockholder is not entitled to appraisal
    rights under this section.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (i)&#160;The Court shall direct the payment of the fair value of
    the shares, together with interest, if any, by the surviving or
    resulting corporation to the stockholders entitled thereto.
    Interest may be simple or compound, as the Court may direct.
    Payment shall be so made to each such stockholder, in the case
    of holders of uncertificated stock forthwith, and the case of
    holders of shares represented by certificates upon the surrender
    to the corporation of the certificates representing such stock.
    The Court&#146;s decree may be enforced as other decrees in the
    Court of Chancery may be enforced, whether such surviving or
    resulting corporation be a corporation of this State or of any
    state.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (j)&#160;The costs of the proceeding may be determined by the
    Court and taxed upon the parties as the Court deems equitable in
    the circumstances. Upon application of a stockholder, the Court
    may order all or a portion of the expenses incurred by any
    stockholder in connection with the appraisal proceeding,
    including, without limitation, reasonable attorney&#146;s fees
    and the fees and expenses of experts, to be charged pro rata
    against the value of all the shares entitled to an appraisal.
</DIV>

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    <BR>
    C-3
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN LOGICAL PAGE -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (k)&#160;From and after the effective date of the merger or
    consolidation, no stockholder who has demanded his appraisal
    rights as provided in subsection&#160;(d)&#160;of this section
    shall be entitled to vote such stock for any purpose or to
    receive payment of dividends or other distributions on the stock
    (except dividends or other distributions payable to stockholders
    of record at a date which is prior to the effective date of the
    merger or consolidation); provided, however, that if no petition
    for an appraisal shall be filed within the time provided in
    subsection&#160;(e)&#160;of this section, or if such stockholder
    shall deliver to the surviving or resulting corporation a
    written withdrawal of such stockholder&#146;s demand for an
    appraisal and an acceptance of the merger or consolidation,
    either within 60&#160;days after the effective date of the
    merger or consolidation as provided in
    subsection&#160;(e)&#160;of this section or thereafter with the
    written approval of the corporation, then the right of such
    stockholder to an appraisal shall cease. Notwithstanding the
    foregoing, no appraisal proceeding in the Court of Chancery
    shall be dismissed as to any stockholder without the approval of
    the Court, and such approval may be conditioned upon such terms
    as the Court deems just.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (l)&#160;The shares of the surviving or resulting corporation to
    which the shares of such objecting stockholders would have been
    converted had they assented to the merger or consolidation shall
    have the status of authorized and unissued shares of the
    surviving or resulting corporation.
</DIV>

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    <BR>
    C-4
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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="center" style="font-size: 14pt; margin-top: 18pt"><B>Please sign, date and mail</B>
</DIV>


<DIV align="center" style="font-size: 14pt; margin-top: 18pt"><B>your proxy card in the</B>
</DIV>


<DIV align="center" style="font-size: 14pt; margin-top: 18pt"><B>envelope provided as soon as possible</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">TO VOTE BY MAIL, PLEASE DETACH PROXY CARD HERE
</DIV>

<DIV align="center" style="font-size: 10pt"><DIV style="width: 100%; border-bottom: 1px dashed #000000; font-size: 1px">&nbsp;</DIV></DIV>



<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>SPECIAL MEETING OF STOCKHOLDERS OF</B>
</DIV>


<DIV align="center" style="font-size: 14pt; margin-top: 18pt"><B>BLAIR CORPORATION</B>
</DIV>

<DIV align="center" style="font-size: 10pt"><B>200 HICKORY STREET<BR>
WARREN, PENNSYLVANIA 16366</B></DIV>


<DIV align="left" style="font-size: 12pt; margin-top: 12pt"><B>P R O X Y</B>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS</B>

</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The undersigned hereby appoints Craig N. Johnson, John E. Zawacki and Herbert G. Hotchkiss
(each with full power to act without the other and with power of substitution) as proxies to
represent the undersigned at the Special Meeting of the common stockholders of Blair Corporation to
be held on Tuesday, April&nbsp;24, 2007 at 11:00&nbsp;a.m., Eastern Daylight Time, at The Library Theatre,
302 Third Avenue West, Warren, Pennsylvania 16365 and at any postponements or adjournments thereof,
with all the power the undersigned would possess if personally present, and to vote all shares of
common stock which the undersigned may be entitled to vote at said meeting, hereby revoking any
proxy heretofore given by the undersigned to vote at said meeting.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS SPECIFIED ON THE REVERSE SIDE. IF THE PROXY IS
PROPERLY EXECUTED BUT NO SPECIFICATION IS MADE, THIS PROXY WILL BE VOTED FOR PROPOSALS 1 AND 2 AND,
AT THE DISCRETION OF THE PROXIES, ON ANY OTHER MATTERS THAT MAY PROPERLY COME BEFORE THE MEETING OR
ANY POSTPONEMENT OR ADJOURNMENT THEREOF.</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>(CONTINUED AND TO BE SIGNED ON REVERSE SIDE.)</B>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>BLAIR CORPORATION OFFERS STOCKHOLDERS OF RECORD<BR>
THREE WAYS TO VOTE YOUR PROXY</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Your telephone or Internet vote authorizes the named proxies to vote your shares in the same
manner as if you had returned your proxy card. We encourage you to use these cost effective and
convenient ways of voting, 24 hours a day, 7&nbsp;days a week.</B>
</DIV>

<P><DIV style="position: relative; float: left; width: 31%">

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>TELEPHONE VOTING</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">This method of voting is available for residents of the U.S. and Canada. On a touch tone telephone,
call <B><I>TOLL FREE 1-800-852-5162</I></B>, 24 hours a day, 7&nbsp;days a week. Have this proxy card ready, then
follow the prerecorded instructions. Your vote will be confirmed and cast as you have directed.
Available 24
hours a day, 7&nbsp;days a week <B>until 11:59 p.m. Eastern Daylight Time on April&nbsp;23, 2007.</B>
</DIV>

</DIV>
<DIV style="position: relative; float: left; margin-left: 3%; width: 30%">

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>INTERNET VOTING</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Visit the Internet voting Web site at <B>http://proxy.georgeson.com.</B><BR>
Have this proxy card ready and follow the instructions on your screen. You will incur only your
usual Internet charges. Available 24 hours a day, 7&nbsp;days a week
<B>until 11:59 p.m. Eastern Daylight
Time on April&nbsp;23, 2007.</B>
</DIV>

</DIV>
<DIV style="position: relative; float: right; width: 31%">

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>VOTING BY MAIL</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Simply sign and date your proxy card and return it in the postage-paid envelope enclosed. If you
are voting by telephone or the Internet, please do not mail your proxy card.
</DIV>

</DIV>
<BR clear="all"><BR>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B><FONT face="Webdings">&#054;</FONT> DETACH BELOW AND RETURN USING THE ENVELOPE PROVIDED ONLY IF YOU ARE VOTING BY MAIL <FONT face="Webdings">&#054;</FONT></B>
</DIV>

<DIV align="center" style="font-size: 10pt"><DIV style="width: 100%; border-bottom: 1px dashed #000000; font-size: 1px">&nbsp;</DIV></DIV>


<DIV align="center">
<TABLE style="font-size: 8pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head --><TR valign="bottom">
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="88%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="top">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
<B><FONT face="Wingdings" style="font-size: 24pt">&#120;</FONT></B>
<BR>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><B>Please mark<BR>
votes as in<BR>
this example.</B></TD>
</TR>
<!-- End Table Body --></TABLE>
</DIV>

<P><DIV style="position: relative; float: left; width: 66%">
<P>
<DIV style="width: 100%; border: 1px solid black; padding: 11px;">


<DIV align="Center" style="font-size: 8pt; margin-top: 6pt"><B>THE
BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A<BR>
VOTE FOR PROPOSALS 1 AND 2.</B>

</DIV>
<DIV align="center">
<TABLE style="font-size: 8pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head --><TR valign="bottom">
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="66%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">1.
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">ADOPTION OF THE AGREEMENT AND PLAN OF MERGER
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>FOR</B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>AGAINST</B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>ABSTAIN</B></TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">(&#147;MERGER AGREEMENT&#148;), DATED AS OF JANUARY 23,
2007, BY AND AMONG APPLESEED&#146;S TOPCO, INC., BLR
ACQUISITION CORP., AND BLAIR CORPORATION.
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><FONT face="Wingdings" style="font-size: 17pt">&#111;</FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><FONT face="Wingdings" style="font-size: 17pt">&#111;</FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><FONT face="Wingdings" style="font-size: 17pt">&#111;</FONT></TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">2.
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">GRANT OF DISCRETIONARY AUTHORITY TO ADJOURN
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>FOR</B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>AGAINST</B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>ABSTAIN</B></TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">THE SPECIAL MEETING IF NECESSARY TO PERMIT
FURTHER SOLICITATION OF ADDITIONAL PROXIES IF
THERE ARE NOT SUFFICIENT VOTES AT THE TIME OF
THE SPECIAL MEETING TO ADOPT THE MERGER
AGREEMENT.
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><FONT face="Wingdings" style="font-size: 17pt">&#111;</FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><FONT face="Wingdings" style="font-size: 17pt">&#111;</FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><FONT face="Wingdings" style="font-size: 17pt">&#111;</FONT></TD>
</TR>
<!-- End Table Body --></TABLE>
</DIV>

</DIV>

</DIV>
<DIV style="position: relative; float: right; width: 30%">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</DIV>
<DIV align="center"><DIV style="font-size: 3pt; margin-top: 16pt; width: 100%; border-top: 1px solid #000000">&nbsp;</DIV></DIV>

<DIV align="center"><DIV style="font-size: 3pt; margin-top: 16pt; width: 100%; border-top: 1px solid #000000">&nbsp;</DIV></DIV>

<DIV align="center">
<TABLE style="font-size: 8pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head --><TR valign="bottom">
    <TD width="88%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">To change the address on your account,
please check the box at the right and indicate your new
address in the
address space above. Please note that changes
to the registered name(s) on the account may not be
substituted via this method.
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><FONT face="Wingdings" style="font-size: 17pt">&#111;</FONT></TD>
</TR>
<!-- End Table Body --></TABLE>
</DIV>

<DIV align="center">
<TABLE style="font-size: 8pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head --><TR valign="bottom">
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="88%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Date
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" valign="top">, 2007</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="5" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD colspan="5" valign="top" align="left">Signature of Stockholder</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="5" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD colspan="5" valign="top" align="left">Signature of Stockholder</TD>
</TR>
<!-- End Table Body --></TABLE>
</DIV>

<DIV align="left" style="font-size: 8pt; margin-top: 6pt">Note: Please sign exactly as your name appears on this Proxy.
When shares are held jointly, each holder should sign. When
signing as executor, administrator, attorney, trustee or
guardian, please give full title as such. If the signer is a
corporation, please sign in full corporate name by duly
authorized officer, giving full title as such. If a signer is a
partnership, please sign in partnership name by authorized
person.
</DIV>

</DIV>
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