Date: May 17, 2005

1. Date: May 17, 2005 The BDO Seidman, LLP CFO Series: Mergers & AcquisitionsPlanning Panelists from:

2. About this Seminar... This interactive seminar will cover what the financial executive needs to know to plan and execute a successful M&A transaction post-Sarbanes Oxley, in a world of rising multiples. Included in this discussion will be such topics as: • Current Multiples, Pricing, and Leveraged Recap Alternatives • Current Guidance on M&A Taxation • The impact of Sarbanes-Oxley on deal price and terms • Funding Availability, Rates, Terms on various debt\equity forms

3. Panelists:James J Calla, Executive Vice President Head of Sovereign Bank’s Capital Markets Group Jim is the Executive Vice President - Director of the Capital Markets Group located in Philadelphia, PA. His responsibilities include Securitization, Interest Rate Derivatives, Foreign Exchange, Investment and Sales, Mergers and Acquisitions. Jim is also the Chairman for Sovereign Securities Corporation, LLC, a separately capitalized, wholly owned subsidiary of Sovereign Bank. Jim has been a senior executive in the capital markets and Asset and Liability Management areas since 1979. From 1988 to 1998, Mr. Calla served as Capital Markets Director and Investment and Funding Manager for CoreStates Bank. He managed over 140 trading and sales professionals in Philadelphia and Reading, PA, FT Lauderdale, FL, London, and Hong Kong. Mr. Calla was instrumental in the formation of CoreStates Securities Corporation, a NASD registered broker dealer. Mr. Calla has extensive experience in foreign exchange, interest rate derivatives, fixed income, and securitization markets. Jim has a Bachelor of Science Degree in Finance from St. Joseph’s University. 1500 Market StreetCentre Square - ConcourseMailcode:  20-210-CPCPhiladelphia, PA 19102phone: 267-256-2825fax: 267-675-0643jcalla@sovereignbank.com

4. Panelists:Gordon Metz, Manager Director Sovereign Bank’s Capital Markets Group Gordon has over 17 years of merger and acquisition experience. He joined Sovereign Bank Capital Markets following positions as a Corporate Development Executive at ADP and senior investment banker at CoreStates and PNC in Philadelphia and Chase Manhattan and Citicorp in New York. Having executed corporate finance transactions on a global basis including deals in Europe, Latin America and Asia, Gordon is familiar with the many financial and cultural nuances that exist when deal making. He has familiarity with numerous industries including chemicals, forestry product, consumer products, outsourcing services, textile and automotive allowing for quick metric formulation in any given situation. Representative clients include large public corporations such as Dow Chemical and Johnson and Johnson, to privately owned mid-market firms Bellefonte Lime, PQ Corporation and Caribbean Restaurants (one of the largest Burger King Franchises). Gordon received his MBA from the University of Michigan and is married with three children. Gordon Metz, Managing Director Capital Markets Group Sovereign Bank 7 Coe Farm Road Brookside, NJ 07926 (973)895-2147 gmetz@sovereignbank.com

5. Panelists:Richard Rose, Partner Buchanan Ingersoll M&A Group Richard D. Rose is a shareholder with Buchanan Ingersoll and a member of the firm's Corporate Finance Group and its Board of Directors. As co-chair of the firm’s M&A Group, his general corporate counseling practice includes mergers and acquisitions, financings and federal securities matters. Richard also acts as outside general counsel to a number of companies including a vendor management company that provide real estate settlement and title insurance services in connection with residential mortgage transactions throughout the United States. Before attending law school, Richard was a senior auditor for the multinational accounting firm of Ernst & Whinney and obtained his CPA license. Richard serves on the Council to the Pennsylvania Bar Association Business Law Section and the Council to the Allegheny County Bar Association Business Law Section. He is a frequent lecturer on business law topics. Richard received his law degree, cum laude, from the University of Pittsburgh School of Law and he is admitted to practice law in Pennsylvania, Ohio, Michigan and Florida. Richard Rose, Partner Buchanan Ingersoll, PC 301 Grant Street Pittsburgh, PA 15219 (412)562-8425 Roserd@bipc.com

6. Panelists:Randy Schwartzman, Tax Partner BDO Seidman’s Mergers & Acquisitions Practice Randy Schwartzman, CPA, MST, has over 20 years of public accounting experience and plays an active leadership role at BDO Seidman LLP. As the partner in charge of BDO’s Long Island tax practice, Randy is responsible for tax planning and consulting for many of BDO’s Long Island clients. Randy is also an active member of BDO’s National Corporate Tax Consulting Group and regularly provides tax advice on corporate mergers, acquisitions, divestitures, and restructurings at a national level. Randy’s responsibilities include servicing clients in the NY metropolitan area and throughout the country. He has a great deal of experience, ranging from Fortune 500 publicly-held corporations through closely held businesses and their owners in a broad array of industries. His experience includes domestic and international corporate taxation with specialties in the areas of mergers and acquisitions, consolidated tax returns, subchapter S taxation, LLC taxation and tax planning for high net worth individuals. He is a discussion leader at local, regional and national seminars for all types of audiences and is frequently published in magazines such as The Tax Advisor, The CPA Journal and The Trusted Professional. Randy has served as the Chairman of the NYS Society of CPAs Mergers and Acquisitions Tax Committee and has been actively involved in its S Corporation and Closely-Held Business Tax Committee. Randy is also a member of the Federal Tax Committee for the American Institute of Certified Public Accountants. Randy Schwartzman, Partner BDO Seidman, LLP 401 Broadhollow Rd Melville, NY 11747 (631)927-1159 Rschwartzman@bdo.com .

7. The Outlook for M&A Transactions James J Calla Sovereign Bank

8. The Macroeconomic Outlook? • ECONOMY: Best of all worlds: • Low inflation • Low interest rates • GDP near 4% while Employment has picked up, fueling consumer confidence. • In 2005, GDP is projected to grow near the 4% pace experienced over the past 8 quarters. • RATES: • Short-term rates are rising steadily; long rates have remained low; but volatile. • Long-term rates will rise further if inflation continues to bubble. • STOCKS: A solid bounce in profits is being hurt by the surge in oil prices. Pricing power is improving and corporate costs have been significantly diminished. A big question mark, as companies focus more on improving dividends over stock price. • INFLATION: Leading inflation indicators are moving up, driven by energy, wages, and raw material prices. The rate of inflation doubled in 2004 from 2003.

9. The Market for M&A Transactions Gordon Metz

10. Historical Deal Activity? Source: Thompson Financial * Include net debt of Target

11. What has been historical deal activity? Quick Fact:Median Purchase Price between 1995 range from a low of $30 million (1995) to a high of $56 million (2000). Source: Thompson Financial * Include net debt of Target

12. Current Purchase Multiples? EBITDA Multiples Target Growth EBITDA Size < 5x Low to none < $5 million 5-8x Stable and moderate $10-15 million > 8x Consistently high >$15 million Quick Fact:Most private deals derive value through a DCF incorporating discounts for size, industry and situation Distribution Communications Defense Energy Technology Manufacturing HealthCare Outsourcing Service Retailing Specialty Chemicals

13. What Deals Are Getting Done? • Recognized name • Large addressable market • Proprietary/niche oriented • Longstanding customer relationships • Solid management team • Financial track record Deals are getting done! • Historic market presence • Infrastructure to grow • Technology sophisticated Must have in place • Asset light • Non-diversified revenue base • Market with “history” • Competitive threats Deal Stoppers

14. What types of deals are getting done? Quick Fact: Increasingly deals are incorporating an earn-out component which accounts for 25% of deal price. NO DEAL STRATEGIC Price Structured Unstructured Seller Driver Non-financial Price Now MBO; ESOPS; LEVERAGED RECAP FINANCIAL Collateral base Process Informal Methodical Speed Slower Quicker

15. What funding is available?

16. What metrics are being used to fund deals? • Tight market that has bottomed out • Gap in financing being filled by the mezzanine marketplace • Returns have decreased • Traditional asset based loans are the norm • Strong equity commitment • Senior debt service >1.2x

17. What are CEO’s thinking about M&A? • Strategy, Strategy, Strategy • How do I grow? • Employing the cheapest form of capital • Is this the right time? • Which is better: smaller or larger? • What are the importance of non-financial considerations? • Integration • Sarbanes-Oxley Quick Fact: Private Companies wishing to sell to a Public company need to focus on SOX compliancy before entering into the market Quick Fact: Cash only deals account for 75% of the transactions.

18. The Impact of SOX on M&A Transactions Richard D. Rose Buchanan Ingersoll, PC

19. The Impact of SOX in M&A Transactions • Sarbanes-Oxley has impact on: • Public company acquiring a public company • Public company acquiring a private company • Acquisitions that result in a future public company

20. Areas of Concern in M&A Process • Due diligence • Negotiation and documentation of transaction

21. Due Diligence • Accounting/Financial Condition • Must be emphasized • All transactions, regardless of GAAP treatment must be understood (i.e., off balance sheet financings) • Accounting policies • Certifications • Internal Controls • SOX 404 report will (at some point in time) involveacquired company • Certifications • Loans to Executives and Directors

22. Due Diligence (continued) • Corporate Governance Documentation • Principles of corporate governance • Charters and minutes of audit, compensation and nominating committees • Board evaluations • Corporate governance ratings  third party services (ISS) • Whistle-blower complaints • Director Independence • Issues arise if target personnel will assume position on the board of acquiring company • Compliance and Ethics Culture

23. Negotiations and Documentation • Representations and Warranties • Financial Statements Rep • “fairly present” v GAAP • Securitization transactions • “off-balance sheet” agreements • Auditors • “registered public accounting firm” • Independent • Compliant with Exchange Act and PCAOB • List all non-audit services

24. Negotiations and Documentation (continued) • Representations and Warranties (continued) • Financial/Internal controls • SEC Reports • Certificates • Disclosure controls required by 13a-15 or 15d-15 • Use of Non-GAAP Financial Measures • Loans to Executives and Directors • Timing of Transactions • Valuation Issues

25. Tax Issues for Mergers & Acquisitions Randy Schwartzman BDO Seidman, LLP

26. Our Approach • Identify tax and non-tax goals of each party • Understand the economics of the deal • Buyer’s perspective vs. Seller’s perspective • Type of consideration • Continuing equity • Installment note/debt

27. Forms Of Consideration • Cash • Other Assets of the Corporation • Stock • Debt • Convertible or Exchangeable Instruments • Warrants

28. How Do We Handle Disagreements? • When conflicts arise, consider: • Installment note/debt • Purchase price adjustments • Contingent payment plans

29. Basic Acquisition Structures • Taxable Stock Sale • Taxable Asset Sale • Tax-Free Stock Sale • Tax-Free Asset Sale

30. Structuring Considerations • Taxable Acquisitions vs. Tax-Free Reorganizations • Asset Acquisitions vs. Stock Acquisitions • Repeal of the General Utilities Doctrine • Substance vs. Form – Step Transaction Doctrine • Section 338 Elections

31. Structuring Considerations (continued) • Corporate Structure of Target and Acquiring Group • Inside Basis of Assets vs. Outside Basis of Stock • Net Operating Losses and Tax Credits • Built-in-gain or loss, income or deduction items • Identity of the shareholders (i.e., corporate, individual, tax-exempt) • Overlap in ownership between shareholders

32. Structuring Considerations (continued) • Consolidated Return Issues: Deferred Intercompany Transactions • Excess Loss Accounts • Tax Sharing Agreements • Loss Carrybacks • NOL Elections • Loss Disallowance Rules

33. Specialty Services • Employee Benefits • Employment Agreements • Deferred Compensation Plans • Stock Option Plans • State & Local Tax • Multistate Income & Franchise Tax Issues • Credits & Incentives Opportunities • Sales Tax Issues • Transfer Pricing

34. Specialty Services (continued) • International Tax • Anti-Deferral Regimes • Foreign Tax Credit • Transfer Pricing • “Double Dips”

35. Specialty Services (continued) • Due Diligence • Review tax filings/documentation for potential undisclosed liabilities • Federal and state income taxes • Payroll taxes • Sales taxes • ERISA/ DOL Exposure • Prepare report documenting: • Findings • Exposure

36. Specialty Services (continued) • Spin-Off Transactions – PLRs Restricted • Tax View Letter to Provide Comfort on: • Business Purpose • Device Restriction • Morris Trust Provisions

37. Creative Planning • Transaction Analysis • Acquisition Cost Study • ESOP Planning

38. Creative Planning (continued) • Net Operating Losses • Section 382 Studies • Planning Around §382 • Releasing SRLY Losses • Built-in-Gains

39. Creative Planning (continued) • Bankruptcy Planning • COD Issues • Preservation of NOLS - Section 382(l)(5) - Section 382(l)(6)

40. Creative Planning (continued) • Use of Flow Through Entities • S Corporations • Partnerships • LLCs • Use of Disregarded Entities • QSubs • Single Member LLCs

41. Creative Planning (continued) • Structuring Buyouts • Entire Company, Subsidiary or Division • Key Acquisition Issues • Debt Financing Issues • Exit Strategies • Structuring IPO • Sale of VC Financed Portfolio Company

42. Questions? James J. Calla, Executive Vice President Capital Markets Group Sovereign Bank 1500 Market StreetCentre Square - ConcourseMailcode:  20-210-CPCPhiladelphia, PA 19102phone: 267-256-2825fax: 267-675-0643jcalla@sovereignbank.com Gordon Metz, Managing Director Capital Markets Group Sovereign Bank 7 Coe Farm Road Brookside, NJ 07926 (973)895-2147 gmetz@sovereignbank.com Randy Schwartzman, Partner BDO Seidman, LLP 401 Broadhollow Rd Melville, NY 11747 (631)927-1159 Rschwartzman@bdo.com Richard Rose, Partner Buchanan Ingersoll, PC 301 Grant Street Pittsburgh, PA 15219 (412)562-8425 Roserd@bipc.com