AGREEMENT AND PLAN OF MERGER

Agreement and Plan of Merger

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Title: AGREEMENT AND PLAN OF MERGER
Governing Law: Minnesota Date: 5/14/2004
Law Firm: Goodwin Procter LLP;Goldner Hawn Johnson & Morrison Incorporated;Kaplan, Strangis and Kaplan, P.A.;

AGREEMENT AND PLAN OF MERGER
, Parties: woodcraft industries inc , wii holdings inc.

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EXHIBIT 2.3

AGREEMENT AND PLAN OF MERGER

DATED AS OF

APRIL 9, 2003

BY AND AMONG

WII HOLDINGS, INC.,

WOODCRAFT ACQUISITION SUBSIDIARY, INC.

AND

WOODCRAFT INDUSTRIES, INC.

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TABLE OF CONTENTS

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PREAMBLE....................................................................................................1

ARTICLE 1 - THE MERGER........................................................................................1

1.1 THE MERGER...........................................................................................1

1.2 EFFECTS OF THE MERGER................................................................................1

1.3 CLOSING..............................................................................................1

1.4 EFFECTIVE DATE AND TIME..............................................................................2

1.5 ARTICLES OF INCORPORATION............................................................................2

1.6 BYLAWS...............................................................................................2

1.7 OFFICERS AND DIRECTORS OF SURVIVING CORPORATION......................................................2

1.8 EFFECT ON CAPITAL STOCK..............................................................................2

1.9 OPTIONS AND WARRANTS.................................................................................6

1.10 PAYMENT OF CASH FOR COMPANY SECURITIES...............................................................7

1.11 DISSENTING SHARES....................................................................................8

1.12 DEPOSIT TO ESCROW....................................................................................8

1.13 APPLICATION OF FUNDS.................................................................................8

1.14 NO FURTHER RIGHTS OR TRANSFERS.......................................................................8

ARTICLE 2 - REPRESENTATIONS AND WARRANTIES OF THE COMPANY.....................................................9

2.1 ORGANIZATION, STANDING AND POWER.....................................................................9

2.2 CAPITAL STRUCTURE...................................................................................10

2.3 SUBSIDIARIES........................................................................................11

2.4 AUTHORITY; NO CONFLICTS; CONSENTS AND APPROVALS.....................................................12

2.5 FINANCIAL STATEMENTS................................................................................12

2.6 ABSENCE OF UNDISCLOSED MATERIAL LIABILITIES.........................................................13

2.7 COMPLIANCE WITH LAWS; PERMITS AND LICENSES..........................................................13

2.8 LITIGATION..........................................................................................14

2.9 TAX MATTERS.........................................................................................14

2.10 ABSENCE OF CERTAIN CHANGES OR EVENTS................................................................16

2.11 VOTE REQUIRED.......................................................................................16

2.12 TITLE TO PROPERTIES, CONDITION AND SUFFICIENCY OF ASSETS............................................16

2.13 EMPLOYEES; LABOR MATTERS............................................................................17

2.14 EMPLOYEE BENEFIT PLANS..............................................................................18

2.15 INTELLECTUAL PROPERTY...............................................................................20

2.16 ENVIRONMENTAL, HEALTH, AND SAFETY MATTERS...........................................................20

2.17 BROKERS OR FINDERS..................................................................................21

2.18 INSURANCE POLICIES..................................................................................21

2.19 AFFILIATE TRANSACTIONS..............................................................................22

2.20 CONTRACTS AND COMMITMENTS...........................................................................22

2.21 PRODUCT WARRANTIES..................................................................................24

2.22 INVENTORY...........................................................................................23

2.23 ACCOUNTS RECEIVABLE AND ACCOUNTS PAYABLE............................................................24

2.24 CUSTOMERS AND DISTRIBUTORS..........................................................................24

2.25 ILLEGAL PAYMENTS....................................................................................24

2.26 NO OTHER REPRESENTATIONS OR WARRANTIES..............................................................25

ARTICLE 3 - REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB..........................................25

3.1 ORGANIZATION, STANDING AND POWER....................................................................26

3.2 AUTHORITY; NO CONFLICTS; CONSENTS AND APPROVALS.....................................................26

3.3 ACTIONS AND PROCEEDINGS.............................................................................26

3.4 BROKERS OR FINDERS..................................................................................26

3.5 MERGER SUB..........................................................................................26

3.6 NO OTHER REPRESENTATIONS AND WARRANTIES.............................................................26

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ARTICLE 4 - COVENANTS........................................................................................27

4.1 CONDUCT OF BUSINESS PENDING THE CLOSING.............................................................26

4.2 NO SOLICITATION.....................................................................................28

4.3 MEETING OF SHAREHOLDERS.............................................................................30

4.4 ACCESS TO INFORMATION...............................................................................29

4.5 HART-SCOTT-RODINO ACT...............................................................................30

4.6 CONFIDENTIALITY AGREEMENT...........................................................................30

4.7 DEPOSIT OF ESCROW FUNDS.............................................................................30

4.8 PAYMENT OF INDEBTEDNESS FOR BORROWED MONEY..........................................................31

4.9 REASONABLE EFFORTS..................................................................................31

4.10 INDEMNIFICATION; DIRECTORS' AND OFFICERS' INSURANCE.................................................31

4.11 PUBLIC ANNOUNCEMENTS................................................................................32

ARTICLE 5 - CONDITIONS PRECEDENT.............................................................................32

5.1 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGER..........................................32

5.2 CONDITIONS TO THE OBLIGATIONS OF PARENT AND MERGER SUB TO EFFECT THE MERGER.........................32

5.3 CONDITIONS TO THE OBLIGATIONS OF THE COMPANY TO EFFECT THE MERGER ..................................34

ARTICLE 6 - TERMINATION AND AMENDMENT........................................................................34

6.1 TERMINATION BY EITHER THE COMPANY OR PARENT.........................................................34

6.2 TERMINATION BY PARENT...............................................................................35

6.3 TERMINATION BY THE COMPANY..........................................................................35

6.4 EFFECT OF TERMINATION...............................................................................35

6.5 AMENDMENT...........................................................................................35

6.6 EXTENSION; WAIVER...................................................................................35

ARTICLE 7 - SURVIVAL, INDEMNIFICATION........................................................................36

7.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES OF THE COMPANY, PARENT AND MERGER SUB....................35

7.2 INDEMNIFICATION BY THE COMPANY OR SELLING PARTIES...................................................35

7.3 INDEMNIFICATION BY PARENT AND MERGER SUB............................................................37

7.4 NOTICE OF THIRD-PARTY CLAIMS........................................................................36

7.5 DEFENSE OF THIRD-PARTY CLAIMS.......................................................................38

7.6 NOTICE OF OTHER CLAIMS..............................................................................38

7.7 ACCESS AND COOPERATION..............................................................................38

7.8 TERM OF INDEMNITIES.................................................................................39

7.9 LIMITATIONS ON LIABILITY............................................................................39

7.10 ESCROW AMOUNT AND TERM..............................................................................41

7.11 LIMITATION ON CONTRIBUTION..........................................................................40

ARTICLE 8 - GENERAL PROVISIONS...............................................................................41

8.1 EXPENSES............................................................................................41

8.2 NOTICES.............................................................................................41

8.3 INTERPRETATION......................................................................................43

8.4 SCHEDULES...........................................................................................43

8.5 COUNTERPARTS........................................................................................44

8.6 ENTIRE AGREEMENT; NO THIRD PARTY BENEFICIARIES; LIABILITY...........................................44

8.7 GOVERNING LAW.......................................................................................44

8.8 SEVERABILITY........................................................................................44

8.9 ASSIGNMENT..........................................................................................44

8.10 ENFORCEMENT.........................................................................................45

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EXHIBITS

EXHIBIT A - ARTICLES OF INCORPORATION OF SURVIVING CORPORATION

EXHIBIT B - SAMPLE CALCULATION OF MERGER CONSIDERATION PER SHARE

EXHIBIT C - FORM OF ESCROW AGREEMENT

EXHIBIT D - [INTENTIONALLY OMITTED]

EXHIBIT E - REQUIRED THIRD PARTY CONSENTS

EXHIBIT F - FORM OF PUT/CALL AGREEMENT

EXHIBIT G - FORM OF OPINION OF COUNSEL

EXHIBIT H - FORM OF GENERAL RELEASE

EXHIBIT I - FORM OF NON-FOREIGN PERSON AFFIDAVIT

EXHIBIT J - FORM OF COLLATERAL ASSIGNMENT OF UNDERTAKINGS

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CROSS REFERENCES

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SECTION

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Aggregate Deductible............................................................7.9(b)(i)

Aggregate Merger Consideration..................................................1.8(e)(i)

Aggregate Option and Warrant Exercise Amount....................................1.8(e)(ii)

Aggregate Preferred Stock Merger Consideration..................................1.8(e)(iii)

Aggregate Shareholder Notes Payoff Amount.......................................1.8(e)(iv)

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

Annual Financial Statements.....................................................2.5

Articles of Merger..............................................................1.4

Bonds...........................................................................1.8(e)(x)

Brentwood.......................................................................1.8(e)(x)

Cash Consideration per Share....................................................1.8(e)(v)

Certificate.....................................................................1.8(d)

Claim Notice....................................................................7.4(a)

Closing.........................................................................1.3

Closing Date....................................................................1.3

Code............................................................................2.9(a)

Common Stock....................................................................1.8(c)

Common Stock Certificate........................................................1.8(c)

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

Company Benefit Arrangements....................................................2.14(d)

Company Disclosure Schedule.....................................................2

Company Employee Plans..........................................................2.14(a)

Company ERISA Affiliate.........................................................2.14(a)

Company Stock...................................................................1.8(b)

Company Tax Affiliate...........................................................2.9(a)

Company Tax Affiliates..........................................................2.9(a)

Company Tax Representations.....................................................7.1(a)(i)

Company Transaction Documents...................................................2.4(a)

Company Transaction Expenses....................................................1.8(e)(vi)

Company Voting Debt.............................................................2.2(d)

Confidentiality Agreement.......................................................4.6

Dissenting Shares...............................................................1.11

Effective Date..................................................................1.4

Effective Time..................................................................1.4

Environmental Laws..............................................................2.16(a)(i)

ERISA...........................................................................2.14(a)

Escrow Agent....................................................................1.12

Escrow Agreement................................................................1.12

Escrow Consideration per Share..................................................1.8(e)(vii)

Escrow Funds....................................................................1.8(e)(viii)

Expiration Date.................................................................7.9(d)(i)

Facility Leases.................................................................2.12(b)

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Fully Diluted Shares Outstanding................................................1.8(e)(ix)

GAAP............................................................................2.5

General Expiration Date.........................................................7.9(d)(ii)

Governmental Entity.............................................................2.4(c)

Hazardous Substance.............................................................2.16(a)(ii)

HSR Act.........................................................................2.4(c)

Indebtedness for Borrowed Money.................................................1.8(e)(x)

Indemnitee......................................................................7.9(d)(iii)

Indemnitor......................................................................7.9(d)(iv)

Intellectual Property...........................................................2.15(a)

Latest Balance Sheet............................................................2.5

Latest Balance Sheet Date.......................................................2.6

Latest Financial Statements.....................................................2.5

Liens...........................................................................2.2(c)

Loss, Losses....................................................................7.9(d)(v)

Loss Payment....................................................................7.11

MBCA............................................................................Recitals

Major Customers and Distributors................................................2.24

Management Shareholders.........................................................Recitals

Material Adverse Effect.........................................................2.1(b)

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

Merger Consideration per Share..................................................1.8(e)(xi)

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

Multiemployer Plan..............................................................2.14(b)

Net Merger Consideration........................................................1.8(e)(xii)

Non-Voting Common Stock.........................................................1.8(c)

Option..........................................................................1.9(a)

Option Consideration............................................................1.9(a)

Options.........................................................................1.9(a)

Option Plan.....................................................................1.9(a)

Ordinary Course.................................................................2.6

Organizational Documents........................................................2.1(c)

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

Parent/Merger Sub Transaction Documents.........................................3.2(a)

Permits.........................................................................2.7

Preferred Stock.................................................................1.8(d)

Preferred Stock Certificate.....................................................1.8(d)

Preferred Stock Merger Consideration per Share..................................1.8(d)

Primewood.......................................................................1.8(e)(x)

Purchase and Exchange Agreement.................................................Recitals

Real Property...................................................................2.12(a)

Requisite Shareholder Vote......................................................2.11

Sale Transaction................................................................4.2(a)

Scheduled Contracts.............................................................2.20(a)

Selling Parties.................................................................7.9(d)(vi)

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Selling Parties' Representative.................................................7.9(d)(vii)

Series A Preferred Stock........................................................1.8(d)

Series B Preferred Stock........................................................1.8(d)

Series C Preferred Stock........................................................1.8(d)

Shareholder Notes...............................................................1.8(e)(xiii)

Shareholder Support Agreement...................................................Recitals

Special Assessments.............................................................1.8(e)(x)

Special Meeting.................................................................6.1(d)

Subsidiary......................................................................2.1(d)

Surviving Corporation...........................................................1.1

Tax, Taxes, Taxable.............................................................2.9(a)

Tax Equalization Payments.......................................................1.8(e)(xiv)

Tax Expiration Date.............................................................7.9(d)(viii)

Tax Returns.....................................................................2.9(a)

Terminating Company Breach......................................................6.2(a)

Terminating Parent Breach.......................................................6.3(a)

Third Party Claims..............................................................7.9(d)(ix)

to the knowledge of the Company.................................................8.3

Unpaid Consulting and Noncompetition Fees.......................................1.8(e)(xv)

Unpaid Management Fees..........................................................1.8(e)(xvi)

Violation.......................................................................2.4(b)

Voting Common Stock.............................................................1.8(c)

Warrant Agreement...............................................................1.9(b)

Warrant Consideration...........................................................1.9(b)

Warrants........................................................................1.9(b)

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AGREEMENT AND PLAN OF MERGER

THIS AGREEMENT AND PLAN OF MERGER, dated as of April 9, 2003 (this

"AGREEMENT"), is made and entered into by and among WII Holdings, Inc., a

Delaware corporation ("PARENT"), Woodcraft Acquisition Subsidiary, Inc., a

Minnesota corporation and a wholly owned subsidiary of Parent ("MERGER SUB"),

and Woodcraft Industries, Inc., a Minnesota corporation (the "COMPANY").

WHEREAS, Parent, Merger Sub and the Company intend to effect a merger of

Merger Sub with and into the Company (the "MERGER") in accordance with this

Agreement and the relevant provisions of the Minnesota Business Corporation Act

(the "MBCA"), and the surviving corporation of the Merger shall be the Company;

WHEREAS, as of the dated hereof, certain executives of the Company (the

"MANAGEMENT SHAREHOLDERS") will enter into a Purchase and Exchange Agreement

(the "PURCHASE AND EXCHANGE AGREEMENT") with Parent and other parties identified

therein;

WHEREAS, as of the date hereof, Marathon Fund Limited Partnership III will

enter into a Shareholder Support Agreement with Parent and Merger Sub (the

"SHAREHOLDER SUPPORT AGREEMENT");

WHEREAS, the respective Boards of Directors of Parent, Merger Sub and the

Company have approved this Agreement and the Merger.

NOW, THEREFORE, in consideration of the foregoing and the respective

representations, warranties, covenants and agreements set forth herein, and

intending to be legally bound hereby, the parties hereto agree as follows:

ARTICLE 1

THE MERGER

1.1. THE MERGER. Upon the terms and subject to the conditions set forth

in this Agreement, at the Effective Time (as defined in Section 1.4), Merger Sub

shall be merged 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 (the "SURVIVING CORPORATION").

1.2. EFFECTS OF THE MERGER. The Merger shall have the effects set forth

in this Agreement and in the applicable provisions of the MBCA. Without limiting

the generality of the foregoing, and subject thereto, at the Effective Time all

the property, rights, privileges, powers, immunities and franchises of Merger

Sub and the Company shall vest in the Surviving Corporation, and all debts,

liabilities, obligations and duties of Merger Sub and the Company shall become

the debts, liabilities, obligations and duties of the Surviving Corporation.

1.3. CLOSING. The closing of the Merger (the "CLOSING") will take place

as soon as practicable, but no later than the fourth business day, after

satisfaction or waiver (as permitted by this Agreement and applicable law) of

the conditions (excluding conditions that, by their terms, cannot be satisfied

until the Closing) set forth in Article 5 (the "CLOSING DATE"), unless another

time or date is agreed to in writing by the parties hereto. The Closing shall be

held at the offices of Goodwin

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Procter LLP, 599 Lexington Avenue, New York, New York, 10022, unless another

place is agreed to in writing by the parties hereto.

1.4. EFFECTIVE DATE AND TIME. Upon the Closing, the parties shall file

with the Secretary of State of the State of Minnesota appropriate articles of

merger (the "ARTICLES OF MERGER") executed in accordance with the relevant

provisions of the MBCA. The Merger shall become effective as of the date and

time of such filings or such other time after such filings as the parties hereto

shall agree to in the Articles of Merger (the "EFFECTIVE TIME"). The date on

which the Effective Time shall occur is referred to as the "EFFECTIVE DATE."

1.5. ARTICLES OF INCORPORATION. At the Effective Time, the articles of

incorporation of the Company (as amended and restated in substantially the form

set forth in EXHIBIT A hereto) shall be the articles of incorporation of the

Surviving Corporation, until thereafter amended as provided by the MBCA and the

provisions of such articles of incorporation.

1.6. BYLAWS. At the Effective Time, the bylaws of Merger Sub, as in

effect immediately prior to the Effective Time, shall become the bylaws of the

Surviving Corporation until thereafter amended as provided by the MBCA, the

provisions of the articles of incorporation of the Surviving Corporation and

such bylaws.

1.7. OFFICERS AND DIRECTORS OF SURVIVING CORPORATION. The officers of the

Company immediately prior to the Effective Time shall be, from and after the

Effective Time, the officers of the Surviving Corporation, until the earlier of

their resignation or removal or otherwise ceasing to be an officer. The

directors of Merger Sub immediately prior to the Effective Time shall be, from

and after the Effective Time, the directors of the Surviving Corporation, until

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

are duly elected and qualified, as the case may be.

1.8. EFFECT ON CAPITAL STOCK. As of the Effective Time, by virtue of the

Merger and without any action on the part of the Parent, Merger Sub or the

Company:

(a) CAPITAL STOCK OF MERGER SUB. Each share of capital stock of

Merger Sub issued and outstanding immediately prior to the Effective Time shall

be converted into and become one fully paid and nonassessable share of common

stock, par value $.01 per share, of the Surviving Corporation.

(b) CANCELLATION OF PARENT AND MERGER SUB-OWNED STOCK. Each share

of the capital stock of the Company (the "COMPANY STOCK") that is issued and

outstanding immediately prior to the Effective Time and owned by Parent or

Merger Sub or any other direct or indirect wholly owned subsidiary of Parent

shall be cancelled, extinguished and retired, and no payment of any

consideration shall be made with respect thereto.

Stock, $.01 par value per share (the "VOTING COMMON STOCK") and the Company's

Class A Non-Voting Common Stock, $.01 par value per share (the "NON-VOTING

COMMON STOCK" and together with the Voting Common Stock, the "COMMON STOCK")

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

shares to be cancelled in accordance with Section 1.8(b) and any Dissenting

Shares (as defined in Section 1.11)) will, by virtue of the Merger and without

any action on the part of the holder thereof, be converted into the right to

receive the Cash Consideration per Share (as defined below) and, subject to the

terms of Article 7, the Escrow Consideration per Share

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(as defined below) without any interest thereon. As of the Effective Time, all

such shares of Common Stock shall no longer be outstanding and shall

automatically be cancelled and retired and shall cease to exist, and each holder

of a stock certificate which immediately prior to the Effective Time represented

any such shares of Common Stock (a "COMMON STOCK CERTIFICATE") shall cease to

have any rights with respect thereto, except the right to receive, upon the

surrender of such Common Stock Certificate as provided in Section 1.10, the Cash

Consideration per Share and, subject to the terms of Article 7, the Escrow

Consideration per Share.

(d) COMPANY PREFERRED STOCK. Each share of the Company's Series A

Preferred Stock, par value $.01 per share (the "SERIES A PREFERRED STOCK"), the

Company's Series B Preferred Stock, par value $.01 per share (the "SERIES B

PREFERRED STOCK") and the Company's Series C Preferred Stock, par value $.01 per

share (the "SERIES C PREFERRED STOCK", and together with the Series A Preferred

Stock and the Series B Preferred Stock, the "PREFERRED STOCK") issued and

outstanding immediately prior to the Effective Time (other than shares to be

cancelled in accordance with Section 1.8(b) and any Dissenting Shares (as

defined in Section 1.11)) will, by virtue of the Merger and without any action

on the part of the holder thereof, be converted into the right to receive $8.00

per share plus all accumulated and unpaid dividends on such share in cash (the

"PREFERRED STOCK MERGER CONSIDERATION PER SHARE") without any interest thereon.

As of the Effective Time, all such shares of Preferred Stock shall no longer be

outstanding and shall automatically be cancelled and retired and shall cease to

exist, and each holder of a stock certificate which immediately prior to the

Effective Time represented any such shares of Preferred Stock (a "PREFERRED

STOCK CERTIFICATE" and, together with a Common Stock Certificate, a

"CERTIFICATE") shall cease to have any rights with respect thereto, except the

right to receive, upon the surrender of such Preferred Stock Certificate as

provided in Section 1.10, the Preferred Stock Merger Consideration per Share.

(e) CERTAIN DEFINITIONS. For purposes of this Agreement:

(i) "AGGREGATE MERGER CONSIDERATION" shall mean

$145,000,000.

(ii) "AGGREGATE OPTION AND WARRANT EXERCISE AMOUNT" shall

mean an amount, as certified by the Secretary of the Company to the reasonable

satisfaction of Parent, equal to the aggregate exercise price of all Options and

Warrants (each as defined in Section 1.9), vested or unvested, outstanding

immediately prior to the Effective Time.

(iii) "AGGREGATE PREFERRED STOCK MERGER CONSIDERATION" shall

mean an amount, as certified by the Secretary of the Company to the reasonable

satisfaction of Parent, equal to the aggregate of the Preferred Stock Merger

Consideration per Share payable in accordance with Section 1.8(d) with respect

to shares of Preferred Stock issued and outstanding immediately prior to the

Effective Time.

(iv) "AGGREGATE SHAREHOLDER NOTES PAYOFF AMOUNT" shall mean

an amount, as certified by the Chief Financial Officer of the Company to the

reasonable satisfaction of Parent, of the aggregate outstanding principal and

accrued and unpaid interest due to the Company under the Shareholder Notes.

(v) "CASH CONSIDERATION PER SHARE" shall mean an amount

equal to the Merger Consideration per Share minus the Escrow Consideration per

Share as determined pursuant to this Section 1.8.

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(vi) "COMPANY TRANSACTION EXPENSES" shall mean the sum, as

certified by the Chief Financial Officer of the Company to the reasonable

satisfaction of Parent, of all unpaid legal, financial advisory, accounting and

other fees and expenses incurred by the Company in connection with the Merger

and the other transactions contemplated by this Agreement.

(vii) "ESCROW CONSIDERATION PER SHARE" shall mean an interest

in the Escrow Funds, rounded to six decimal places, equal to (A) $8,250,000,

divided by (B) the amount, by which, (y) Fully Diluted Shares Outstanding,

exceeds (z) the aggregate number of shares of issued and outstanding Common

Stock owned by Parent or Merger Sub immediately prior to the Effective Time

cancelled, extinguished and retired pursuant to Section 1.8(b).

(viii) "ESCROW FUNDS" shall mean $8,250,000.

(ix) "FULLY DILUTED SHARES OUTSTANDING" shall mean the sum,

as certified by the Secretary of the Company to the reasonable satisfaction of

Parent, of (A) the number of shares of Common Stock issued and outstanding

immediately prior to the Effective Time, plus (B) the number of shares of Common

Stock issuable upon exercise of all Options and Warrants ( each as defined in

Section 1.9), vested or unvested, outstanding immediately prior to the Effective

Time.

(x) "INDEBTEDNESS FOR BORROWED MONEY" shall mean an amount

equal to the sum, without duplication, of:

(A) the outstanding principal and accrued and unpaid

interest (as well as prepayment, breakage and similar charges payable) under

that certain Second Amended and Restated Credit Agreement, as amended from time

to time, dated July 31, 2002, among the Company, PrimeWood, Inc. ("PRIMEWOOD"),

Brentwood Acquisition Corp. ("BRENTWOOD"), the Banks party thereto and U.S. Bank

National Association as a Bank and agent for the Banks and Antares Capital

Corporation, as a Bank and as co-agent for the Banks as set forth in payoff

letters from such institutions;

(B) the outstanding principal and accrued and unpaid

interest (as well as prepayment, breakage and similar charges payable) under

that certain Senior Subordinated Note, Preferred Stock and Warrant Purchase

Agreement, as amended from time to time, dated June 16, 1998 among the Company,

Primewood, Continental Illinois Venture Corporation, MIG Partners VII and

certain other parties as set forth in payoff letters from the holders of

indebtedness thereunder;

interest under that certain Subordinated Promissory Note, dated as of July 31,

2002, in the original principal amount of $2,150,000 made by Brentwood, as

maker, to Brent E. Gabriel, as payee, as set forth in a payoff letter from the

holder thereof;

(D) an amount equal to the outstanding principal of,

and accrued and unpaid interest on, the Industrial Development Revenue Bonds

(Woodcraft Industries, Inc. Project), Series 1995 issued by the City of Bowling

Green, Kentucky in the original principal amount of $6,900,000, as certified by

the Chief Financial Officer of the Company to the reasonable satisfaction of

Parent (the "BONDS");

(E) the amount of unpaid special real estate

assessments on the Company's property located at 522 Lincoln Ave. S.E., St.

Cloud, Minnesota, as certified by the Chief

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Financial Officer of the Company to the reasonable satisfaction of Parent (the

"SPECIAL ASSESSMENTS"); and

(F) any other indebtedness for money borrowed by the

Company or any Subsidiary of the Company, the carrying value of capital lease

obligations of the Company and its Subsidiaries set forth on the Latest Balance

Sheet as adjusted through the Closing Date, any indebtedness for money borrowed

that is secured by the assets of the Company or any Subsidiary of the Company,

indebtedness for borrowed money guaranteed in any manner by the Company or any

Subsidiary of the Company, and all accrued and unpaid interest or fees,

penalties or other amounts due with respect thereto.

(xi) "MERGER CONSIDERATION PER SHARE" shall mean an amount,

rounded to six decimal places, equal to Net Merger Consideration divided by

Fully Diluted Shares Outstanding. EXHIBIT B illustrates the calculation of

Merger Consideration per Share based on the capital structure of the Company as

of the date of this Agreement.

(xii) "NET MERGER CONSIDERATION" shall mean an amount equal

to (x) the sum of (A) Aggregate Merger Consideration, plus (B) Aggregate Option

and Warrant Exercise Amount, plus (C) the Aggregate Shareholder Notes Payoff

Amount minus (y) the sum of (A) Indebtedness for Borrowed Money immediately

prior to the Effective Time (after giving effect to any application of cash to

reduce such Indebtedness for Borrowed Money prior to the Effective Time), plus

(B) Company Transaction Expenses, plus (C) Unpaid Consulting and Noncompetition

Fees, plus (D) the Aggregate Preferred Stock Merger Consideration, plus (E)

Unpaid Management Fees, plus (F) the Tax Equalization Payments.

(xiii) "SHAREHOLDER NOTES" shall mean those certain four

Demand Promissory Notes, each dated February 28, 1996, made payable to the order

of WII Acquisition Corp., from each of Jerome A. Brannan, Stephen R. Jacobs, Jon

A. Knudson and Sheila M. Krogman in the original principal amounts of $50,000,

$25,000, $50,000 and $37,500, respectively.

(xiv) "TAX EQUALIZATION PAYMENTS" shall mean an amount, as

certified by the Chief Financial Officer of the Company to the reasonable

satisfaction of Parent, equal to the sum of the tax equalization payments to be

made to certain shareholders of the Company in connection with the consummation

of the transactions contemplated by the Agreement as set forth in such Chief

Financial Officer certification.

(xv) "UNPAID CONSULTING AND NONCOMPETITION FEES" shall mean

an amount (which for purposes of this Agreement shall not be considered

Indebtedness for Borrowed Money), as certified by the Chief Financial Officer of

the Company to the reasonable satisfaction of Parent, equal to the sum of (A)

amounts unpaid by the Company under that certain Noncompetition and Proprietary

Information Agreement, dated as of June 16, 1998, between the Company, Primewood

and Edward F. Shorma, plus (B) amounts unpaid by the Company under that certain

Consulting Agreement, dated as of June 16, 1998, between the Company and

PrimeBoard International, Inc.

(xvi) "UNPAID MANAGEMENT FEES" shall mean an amount, as

certified by the Chief Financial Officer of the Company to the reasonable

satisfaction of Parent, equal to fees unpaid by the Company under that certain

Management Services Agreement, dated as of February 28, 1996, as amended on May

10, 2002, between the Company and Goldner Hawn Johnson & Morrison Incorporated.

<Page>

1.9 OPTIONS AND WARRANTS.

(a) OPTIONS. At the Effective Time, each option to acquire Common

Stock outstanding immediately prior to the Effective Time under the Company's

1998 Stock Option Plan (the "OPTION PLAN"), whether vested or unvested (each, an

"OPTION," collectively, the "OPTIONS"), shall automatically become cancelled and

extinguished and each holder of an Option shall only have the right to receive

(A) from the Surviving Corporation a cash payment (less applicable federal,

state and local withholding taxes) in an aggregate amount, rounded to the

nearest penny, equal to the positive difference, if any, between (i) the Cash

Consideration per Share over (ii) the applicable exercise price per share of

Common Stock applicable to such Option for all shares of Common Stock covered by

such Option (the "OPTION CONSIDERATION") and (B) subject to the provisions of

Article 7, the Escrow Consideration per Share for all shares of Common Stock

covered by such Option if and when released pursuant to the terms of the Escrow

Agreement (as defined in Section 1.12). All payments with respect to the Option

Consideration shall be treated as compensation.

(b) WARRANTS. At the Effective Time, each warrant to acquire

Common Stock or any securities directly or indirectly convertible into or

exchangeable for Common Stock (the "WARRANTS") outstanding immediately prior to

the Effective Time under those certain warrant agreements described in SECTION

2.2(b) OF THE COMPANY DISCLOSURE SCHEDULE (each a "WARRANT AGREEMENT") shall

automatically become cancelled and extinguished and each holder thereof shall

only have the right to receive (A) from the Surviving Corporation a cash payment

(less applicable federal, state and local withholding taxes, if any) in an

aggregate amount, rounded to the nearest penny, equal to the difference, if any,

between (i) the Cash Consideration per Share and (ii) the applicable exercise

price per share of the Common Stock applicable to such Warrant for all shares of

Common Stock subject to the Warrant (the "WARRANT CONSIDERATION") and (B)

subject to the provisions of Article 7, the Escrow Consideration per Share for

all shares of Common Stock subject to the Warrant if and when released pursuant

to the terms of the Escrow Agreement (as defined in Section 1.12).

(including, without limitation, giving requisite notices to holders of Options

and Warrants advising them of such accelerated vesting and rights pursuant to

this Section 1.9) to fully advise holders of Options and Warrants of their

rights under this Agreement, the Options and the Warrants, to facilitate their

timely exercise of such rights and to effectuate the provisions of this Section

1.9. From and after the Effective Time, other than as expressly set forth in

this Section 1.9, no holder of an Option or a Warrant shall have any other

rights in respect thereof other than to receive payment for his, her or its

Options or Warrants as set forth in this Section 1.9, and the Company shall take

all necessary actions to terminate effective as of the Effective Time the

Company's Option Plan, stock option agreements and similar arrangements.

<Page>

1.10 PAYMENT OF CASH FOR COMPANY SECURITIES.

(a) At the Effective Time, each holder of a Certificate or

Certificates representing shares of Common Stock or Preferred Stock extinguished

at the Effective Time may surrender such Certificate or Certificates to the

Company, to effect the exchange of such Certificate or Certificates on such

holder's behalf. Until so surrendered and exchanged, each outstanding

Certificate shall be deemed to represent and evidence only the right to receive

the Merger Consideration per Share or the Preferred Stock Merger Consideration

per Share, as the case may be, to be paid as set forth in this Section 1.10 and

until such surrender and exchange, no cash shall be paid to the holder of such

outstanding Certificate in respect thereof.

(b) At the Effective Time and after surrender to the Company of

any Common Stock Certificate, the Company shall distribute to the person in

whose name the Certificate shall have been registered, a check or wire transfer

in an amount, rounded to the nearest penny, equal to (x) the Cash Consideration

per Share, multiplied by (y) the number of shares of Common Stock represented by

such Common Stock Certificate. The Company shall withhold from any distribution

hereunder to a maker of any of the Shareholder Notes the outstanding principal

balance and accrued and unpaid interest on such Shareholder Note. The holder of

such Common Stock Certificate shall, subject to the provisions of Article 7,

retain such person's right to receive the Escrow Consideration per Share if and

when released pursuant to the terms of the Escrow Agreement.

any Preferred Stock Certificate, the Company shall distribute to the person in

whose name the Certificate shall have been registered, a check or wire transfer

in an amount, rounded to the nearest penny, equal to (x) the Preferred Stock

Merger Consideration per Share, multiplied by (y) the number of shares of

Preferred Stock represented by such Preferred Stock Certificate.

(d) Promptly after the Effective Time, but in any event within 10

days of the Effective Date, the Company shall distribute to the person in whose

name an Option shall have been registered a check or wire transfer in an amount

equal to the Option Consideration, rounded to the nearest penny, attributable to

such Option. Payment of this aggregate Option Consideration and the fulfillment

of the obligations contained herein by the Surviving Corporation and the Company

shall be in full satisfaction of all other rights pertaining to such Option,

except to the right to receive, subject to the provisions of Article 7, the

Escrow Consideration per Share if and when released pursuant to the terms of the

Escrow Agreement.

(e) At the Effective Time, the Company shall distribute to the

person in whose name a Warrant shall have been registered a check or wire

transfer in an amount equal to the Warrant Consideration, rounded to the nearest

penny, attributable to such Warrant. Payment of this aggregate Warrant

Consideration and the fulfillment of the obligations contained herein by the

Surviving Corporation and the Company shall be in full satisfaction of all other

rights pertaining to such Warrant, except to the right to receive, subject to

the provisions of Article 7, the Escrow Consideration per Share if and when

released pursuant to the terms of the Escrow Agreement.

(f) If payment of cash is to be made to a person other than the

person in whose name the Certificate surrendered in exchange therefor is

registered, it shall be a condition to such payment that the Certificate so

surrendered shall be properly endorsed and otherwise in proper form for

transfer, and that the person requesting such payment shall pay to the Company

any transfer and

<Page>

other taxes required by reason of such payment to such other person or shall

have established to the satisfaction of the Company that such tax either has

been paid or is not payable.

(g) No interest shall accrue or be payable with respect to any

amounts which a holder of shares of Common Stock, Preferred Stock, Options or

Warrants shall be so entitled to receive. The Company shall be authorized to pay

the cash attributable to any Certificate previously issued which has been lost

or destroyed, upon receipt of satisfactory evidence of ownership of the shares

of the securities represented thereby and of appropriate indemnification.

(h) The Company shall have received an IRS W-9 (or other

applicable form) executed by the recipient of the cash to be so distributed by

the Company pursuant to this Section 1.10 prior to the making of any such

distribution and shall withhold from any distribution any applicable federal,

state or local withholding taxes required to be withheld from such distribution.

1.11 DISSENTING SHARES. Notwithstanding Section 1.8 hereof, shares of the

Common Stock and shares of the Preferred Stock issued and outstanding

immediately prior to the Effective Time and held by a holder who has not voted

in favor of the Merger or consented thereto in writing and who has properly

demanded and perfected such holder's right to dissent from the Merger and to be

paid the fair value of such shares in accordance with Sections 302A.471 and

302A.473 of the MBCA (and who has neither effectively withdrawn nor lost his

right to dissent) ("DISSENTING SHARES"), shall not be converted into a right to

receive the Merger Consideration per Share or the Preferred Stock Merger

Consideration per Share, as the case may be, pursuant to Section 1.8, and the

holder thereof shall be entitled to only such rights as are granted by the MBCA.

If after the Effective Time such holder fails to perfect or withdraws or

otherwise loses his right to dissent, such shares of Common Stock and Preferred

Stock shall be treated as if they had been converted as of the Effective Time

into the right to receive the Merger Consideration per Share or the Preferred

Stock Merger Consideration per Share, as the case may be, as provided in Section

1.8, without interest thereon. The Company shall give Parent reasonably prompt

notice of any demands for payment received by the Company under Sections

302A.471 and 302A.473 of the MBCA, and Parent shall have the right to

participate in all negotiations and proceedings with respect to such demands.

1.12 DEPOSIT TO ESCROW. At the Effective Time, Parent shall cause the

Escrow Funds to be deposited with an escrow agent reasonably acceptable to

Parent and the Selling Parties' Representative (the "ESCROW AGENT") under an

Escrow Agreement substantially in the form attached hereto as EXHIBIT C, but

including such changes as may be requested by the Escrow Agent relating to the

Escrow Agent's obligations, liabilities and responsibilities (the "ESCROW

AGREEMENT").

1.13 APPLICATION OF FUNDS. At the Effective Time, Parent shall pay or

cause the Company to pay in full (A) the Indebtedness for Borrowed Money of the

Company (other than with respect to the Bonds, the Special Assessments and the

capital lease obligations of the Company) in accordance with the written

instructions of the holders thereof, (B) the Tax Equalization Payments in

accordance with the written instruction of the Chief Financial Officer of the

Company, (C) the Unpaid Management Fees to Goldner Hawn Johnson & Morrison

Incorporated, and (D) the Company Transaction Expenses in accordance with the

written instructions of the Chief Financial Officer of the Company.

1.14 NO FURTHER RIGHTS OR TRANSFERS. At the Effective Time, all shares of

Company Stock issued and outstanding immediately prior to the Effective Time

shall be cancelled and cease to exist, and each holder of a Certificate or

Certificates that represented shares of Company Stock

<Page>

issued and outstanding immediately prior to the Effective Time shall cease to

have any rights as a shareholder with respect to the shares of Company Stock

represented by such Certificate or Certificates, except for the right to

surrender such Certificate or Certificates in exchange for the payment provided

pursuant to Section 1.8 hereof or to preserve and perfect such holder's right to

receive payment for such holder's shares pursuant to Sections 302A.471 and

302A.473 of the MBCA and Section 1.11 hereof if such holder has validly

exercised and not withdrawn or lost such right, and no transfer of shares of

Company Stock issued and outstanding immediately prior to the Effective Time

shall be made on the stock transfer books of the Surviving Corporation.

ARTICLE 2

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

The Company represents and warrants to Parent and Merger Sub that, except

as set forth in the disclosure schedule delivered by the Company to Parent on

the date hereof (the "COMPANY DISCLOSURE SCHEDULE"):

2.1 ORGANIZATION, STANDING AND POWER.

(a) The Company and each of its Subsidiaries is duly organized and

validly existing and in good standing under the laws of its jurisdiction of

organization and has all requisite corporate power and authority to own or lease

and operate its properties and assets, and to carry on its business as now

conducted. The Company and each of its Subsidiaries is duly qualified and in

good standing to do business in each jurisdiction in which the nature of its

business or the ownership or leasing of its properties makes such qualification

necessary except for such jurisdictions where the failure to be so qualified

would not reasonably be expected to have a Material Adverse Effect on the

Company.

(b) For purposes of this Agreement, "MATERIAL ADVERSE EFFECT"

means, with respect to any entity, any adverse change, circumstance or effect

that, individually or aggregated with other changes, circumstances and effects,

is materially adverse to the business, assets, liabilities, condition (financial

or otherwise), or results of operations of such entity and its Subsidiaries

taken as a whole; provided, however, that Material Adverse Effect shall not be

deemed to include, nor shall any of the following be considered when determining

if a Material Adverse Effect has occurred: (i) any change, circumstance or

effect relating to general economic or financial conditions or resulting from or

arising out of developments in credit, financial or securities markets,

including, without limitation, caused by acts of terrorism or war (whether or

not declared) (provided such change or effect does not affect the Company or the

Parent in a materially disproportionate manner to others in the industries in

which they respectively operate), (ii) any change, circumstance or effect

generally affecting the industries in which Parent or the Company, as the case

may be, operates, including, without limitation, caused by acts of terrorism or

war (whether or not declared) (provided such change or effect does not affect

the Company or the Parent in a materially disproportionate manner to others in

the industries in which they respectively operate), or (iii) any change,

circumstance or effect attributable to the announcement of this Agreement.

date, of the Company and each Company Subsidiary previously furnished by the

Company to Parent are complete and correct and such instruments, as so amended,

are in full force and effect as of the date

<Page>

hereof. For purposes of this Agreement, "ORGANIZATIONAL DOCUMENTS" means, with

respect to any entity, the certificate or articles of incorporation, bylaws

and/or other similar governing documents of such entity.

(d) For purposes of this Agreement, "SUBSIDIARY" when used with

respect to any party means any corporation or other organization, whether

incorporated or unincorporated, (i) of which such party or any other Subsidiary

of such party is a general partner (excluding partnerships, the general

partnership interests of which held by such party or any Subsidiary of such

party do not have a majority of the voting and economic interests in such

partnership) or (ii) at least a majority of the securities or other interests of

which having by their terms ordinary voting power to elect a majority of the

board of directors or others performing similar functions with respect to such

corporation or other organization is directly or indirectly owned or controlled

by such party or by any one or more of its Subsidiaries, or by such party and

one or more of its Subsidiaries.

2.2 CAPITAL STRUCTURE.

(a) The authorized capital stock of the Company consists of

14,986,875 shares comprised of the following:

(i) CLASSES OF COMPANY COMMON STOCK. The following classes

of Common Stock:

(1) 5,000,000 shares of Voting Common Stock, 979,500

of which are issued and outstanding, 803,125 of which are reserved for issuance

pursuant to outstanding Warrants and 14,250 of which are reserved for issuance

pursuant to outstanding Options described under SECTION 2.2(b) OF THE COMPANY

DISCLOSURE SCHEDULE as of the date of this Agreement;

(2) 600,000 shares of Non-Voting Common Stock,

85,348 of which are issued and outstanding and 472,542 of which are reserved for

issuance pursuant to outstanding Warrants described under SECTION 2.2(b) OF THE

COMPANY DISCLOSURE SCHEDULE as of the date of this Agreement;

(ii) SERIES OF COMPANY PREFERRED STOCK. The following

series of Preferred Stock:

(1) 750,000 shares of Series A Preferred Stock, all of

which are issued and outstanding as of the date of this Agreement;

(2) 803,125 shares of Series B Preferred Stock, all of

which are issued and outstanding as of the date of this Agreement;

(3) 1,000,000 shares of Series C Preferred Stock,

550,000 of which are issued and outstanding as of the date of this Agreement;

and

(4) 6,833,750 undesignated shares, none of which is

issued and outstanding.

As of the date of this Agreement, without giving effect to the transaction

contemplated by the Purchase and Exchange Agreement, the outstanding shares of

Company Stock are owned of record by the persons and in the amounts set forth in

SECTION 2.2(a) OF THE COMPANY DISCLOSURE SCHEDULE. All issued and outstanding

shares of the Company Stock are duly authorized, validly issued, fully paid and

nonassessable, and were not issued in violation of any preemptive rights or any

applicable

<Page>

federal or state securities laws. No shares of Company Stock are held in the

treasury of the Company or by any Company Subsidiary. There are no outstanding

options, warrants or other rights (including preemptive rights) relating to the

issuance by the Company of any shares of its capital stock, including any right

of conversion or exchange under any outstanding security or other instrument

except for Warrants to purchase up to 803,125 shares of Voting Common Stock,

Warrants to purchase up to 472,542 shares of Non-Voting Common Stock, Options to

purchase up to 14,250 shares of Voting Common Stock under the 1998 Stock Option

Plan and as set forth in that certain Amended and Restated Shareholder

Agreement, dated June 16, 1998, among the Company and various holders of the

Company's securities, as amended.

(b) SECTION 2.2(b) OF THE COMPANY DISCLOSURE SCHEDULE sets forth a

complete and accurate list, as of the date of this Agreement, of (i) the holder

of each outstanding Option, the number and class of shares of Common Stock

issuable upon exercise of each Option and the exercise price and expiration date

thereof and (ii) the holder of each outstanding Warrant, indicating with respect

to each Warrant the Warrant Agreement or other document under which it was

granted, the number of shares of the Company's capital stock, and the class or

series of such shares, subject to such Warrant, the exercise price, the date of

issuance and the expiration date thereof.

each Company Subsidiary are duly authorized, validly issued, fully paid and

nonassessable and are owned directly or indirectly by the Company and are free

and clear of any liens, claims, pledges, encumbrances, restrictions, preemptive

rights or any other claims of any third party ("LIENS").

(d) No bonds, debentures, notes or other indebtedness of the

Company having, or convertible into other securities having, the right to vote

on any matters on which shareholders may vote ("COMPANY VOTING DEBT") are issued

or outstanding.

(e) Except as set forth in SECTION 2.2(e) OF THE COMPANY

DISCLOSURE SCHEDULE, there are no securities, options, warrants, calls, rights,

commitments, agreements, arrangements or undertakings of any kind to which the

Company or any Company Subsidiary is a party or by which any of them is bound

obligating the Company or any Company Subsidiary to issue, deliver or sell, or

cause to be issued, delivered or sold, additional shares of capital stock or

other securities of the Company or any Company Subsidiary or obligating the

Company or any Company Subsidiary to issue, grant, extend or enter into any such

security, option, warrant, call, right, commitment, agreement, arrangement or

undertaking. There are no outstanding obligations of the Company or any Company

Subsidiary to repurchase, redeem or otherwise acquire any shares of capital

stock of the Company or its Subsidiaries. Except for the Shareholder Support

Agreement and as set forth in SECTION 2.2(e) OF THE COMPANY DISCLOSURE SCHEDULE,

there is no voting trust or other agreement or understanding to which the

Company or any Company Subsidiary is a party or is bound, or, to the knowledge

of the Company, to which any shareholder of such entity is a party or is bound,

with respect to the voting of the capital stock or other voting securities of

the Company or any Company Subsidiary. The Company has the ability to effect any

action requiring the approval of the shareholders of any of its Subsidiaries and

to designate all of the members of the board of directors of each of its

Subsidiaries.

2.3 SUBSIDIARIES.

(a) SECTION 2.3(a) OF THE COMPANY DISCLOSURE SCHEDULE lists all

the Company's Subsidiaries, the states in which such Subsidiaries are organized

and qualified to do business, the

<Page>

number and type of outstanding equity securities of each Company Subsidiary and

a list of the holders thereof.

(b) The copies of the Organizational Documents, as amended to

date, of all Subsidiaries of the Company previously furnished to Parent are true

and complete and such instruments, as so amended, are in full force and effect

as of the date hereof.

the Company, neither the Company nor any Company Subsidiary owns any stock,

partnership interest, joint venture interest or any other security issued by any

other corporation, organization or entity, except readily marketable securities

owned by the Company or a Company Subsidiary in the ordinary course of business.

2.4 AUTHORITY; NO CONFLICTS; CONSENTS AND APPROVALS.

(a) AUTHORITY. The Company has all requisite corporate power and

authority to execute and deliver this Agreement and any other agreement,

document or instrument to be executed by the Company in connection with the

Merger (the "COMPANY TRANSACTION DOCUMENTS") and, subject to obtaining the

necessary approval of its shareholders in accordance with the MBCA, to

consummate the transactions contemplated hereby and thereby. The execution and

delivery of this Agreement and the Company Transaction Documents by the Company

and the consummation by the Company of the transactions contemplated hereby and

thereby have been duly authorized by all necessary corporate action on the part

of the Company, subject in the case of the Merger to the approval and adoption

of this Agreement by the holders of a majority of the outstanding shares of

Voting Common Stock and Series B Preferred Stock in accordance with the MBCA.

This Agreement and the Company Transaction Documents have been duly executed and

delivered by the Company and constitute valid and binding obligations of the

Company, enforceable against it in accordance with their terms.

(b) NO CONFLICTS. The execution and delivery of this Agreement and

the Company Transaction Documents by the Company does not, and the consummation

by the Company of the transactions contemplated hereby and thereby and

compliance with the provisions hereof and thereof will not, conflict with, or

result in any violation of, or constitute a default (with or without notice or

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

amendment, cancellation or acceleration of any material obligation or the loss

of a material benefit under, or result in the creation of a Lien on any assets

or properties of the Company or any Company Subsidiary pursuant to (any such

conflict, violation, default, right of termination, amendment, cancellation or

acceleration, loss or creation, a "VIOLATION"): (i) any provision of the

Organizational Documents of the Company or any Company Subsidiary or (ii) except

as disclosed in SECTION 2.4(b)(ii) OF THE COMPANY DISCLOSURE SCHEDULE, any loan

or credit agreement, note, mortgage, bond, indenture, lease, benefit plan or

other material agreement, obligation, instrument, permit, concession, franchise

or license binding upon or held by the Company or any Company Subsidiary or any

judgment, order, decree, statute, law, ordinance, rule or regulation applicable

to the Company, its Subsidiaries or their respective properties or assets.

or authorization of, or registration, declaration, notice to or filing with, any

domestic (federal, state or local), foreign or supranational court, commission,

governmental body, regulatory agency, administrative agency or other

governmental or regulatory authority or agency (a "GOVERNMENTAL

<Page>

ENTITY") is required by or with respect to the Company or any Company Subsidiary

in connection with the execution and delivery of this Agreement and the Company

Transaction Documents by the Company or the consummation of the transactions

contemplated hereby or thereby except for (i) compliance with the provisions of

the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR

ACT"), (ii) the filing and recordation of the appropriate merger documents as

required by the MBCA and (iii) compliance with Sections 302A.471 and 302A.473 of

the MBCA regarding dissenters' rights.

2.5 FINANCIAL STATEMENTS. Attached to SECTION 2.5 OF THE COMPANY

DISCLOSURE SCHEDULE are true and correct copies of (i) the audited consolidated

balance sheets of the Company as of December 31, 2002, 2001 and 2000 and the

audited consolidated statements of operations and comprehensive income,

shareholders' deficit and cash flows of the Company for each of the years ended

December 31, 2002, 2001, 2000, and 1999 (collectively, the "ANNUAL FINANCIAL

STATEMENTS"); and (ii) an unaudited consolidated balance sheet of the Company as

of February 28, 2003 (the "LATEST BALANCE SHEET") and the unaudited statement of

operations and comprehensive income and cash flows for the two-month period then

ended (collectively with the Latest Balance Sheet, the "LATEST FINANCIAL

STATEMENTS"). The Latest Financial Statements and the Annual Financial

Statements are based upon information contained in the books and records of the

Company and fairly present, in all material respects, the consolidated financial

position and consolidated results of operations and cash flows of the Company

and its Subsidiaries as of the respective dates or for the respective periods

set forth therein, all in conformity with generally accepted accounting

principles ("GAAP") consistently applied throughout the periods indicated

subject, in the case of the Latest Financial Statements, to normal year-end

adjustments and the absence of notes (in either case which will be, individually

or in the aggregate, immaterial).

2.6 ABSENCE OF UNDISCLOSED MATERIAL LIABILITIES. None of the Company and

its Subsidiaries has any liability (whether accrued, absolute, contingent,

unliquidated or otherwise, whether due or to become due, whether known or

unknown, and regardless of when asserted) except for: (i) liabilities shown on

the Latest Balance Sheet, (ii) liabilities incurred since the date of the Latest

Balance Sheet (the "LATEST BALANCE SHEET DATE") in the Ordinary Course, (iii)

liabilities otherwise disclosed in the Company Disclosure Schedule, (iv)

liabilities to Parent and Merger Sub incurred pursuant to this Agreement or in

furtherance of the transactions contemplated under this Agreement, and (v)

liabilities that would not be required to be reflected or reserved against on a

balance sheet prepared in accordance with GAAP. For purposes of this Agreement,

"ORDINARY COURSE" means, with respect to any entity, any actions taken in the

regular and ordinary course of that entity's business, consistent in all

material respects with past practices.

2.7 COMPLIANCE WITH LAWS; PERMITS AND LICENSES. Except as set forth in

SECTION 2.7 OF THE COMPANY DISCLOSURE SCHEDULE, the Company and its Subsidiaries

hold all material permits, licenses, certificates, franchises, registrations,

variances, exemptions, orders and approvals of all Governmental Entities

("PERMITS") which are necessary to each of them to own, lease and operate its

properties or to carry on its business as now being conducted, and all such

Permits are in full force and effect. The Company and its Subsidiaries and the

Real Property (as defined in Section 2.12(a)) are in material compliance with

the terms of such Permits. Except as set forth in SECTION 2.7 OF THE COMPANY

DISCLOSURE SCHEDULE, the businesses of the Company and its Subsidiaries are not

being and have not been conducted in violation of any law, ordinance,

regulation, judgment, decree, injunction,

<Page>

rule or order of any Governmental Entity, except for violations which would not

reasonably be expected to have a Material Adverse Effect on the Company.

2.8 LITIGATION. Except as set forth in SECTION 2.8 OF THE COMPANY

DISCLOSURE SCHEDULE, as of the date of this Agreement there is (i) no material

litigation, arbitration, grievance, claim, suit, action, investigation or

proceeding pending or, to the knowledge of the Company, threatened, against or

affecting the Company or any of its Subsidiaries or any of their respective

assets and (ii) no judgment, award, decree, injunction, rule or order of any

Governmental Entity or arbitrator outstanding against the Company or any of its

Subsidiaries. There is no material litigation, arbitration, grievance, claim,

suit, action, investigation or proceeding pending or, to the knowledge of the

Company, threatened, against or adversely affecting the Company or any of its

Subsidiaries or any of their respective assets and no judgment, award, decree,

injunction, rule or order of any Governmental Entity or arbitrator outstanding

against the Company or any of its Subsidiaries.

2.9 TAX MATTERS.

Except as set forth in SECTION 2.9 OF THE COMPANY DISCLOSURE SCHEDULE:

(a) Each of (x) the Company and (y) any Company Subsidiary and (z)

any consolidated, combined or unitary group of which the Company or any Company

Subsidiary is or was a member (each, a "COMPANY TAX AFFILIATE" and,

collectively, the "COMPANY TAX AFFILIATES"), and any Company Employee Plan (as

defined in Section 2.14 hereof), as the case may be, has: (i) timely filed (or

has had timely filed on its behalf) all material returns, estimated returns,

declarations, reports, estimates, information returns, and statements, including

any schedules thereto or other information ("TAX RETURNS"), required to be filed

or sent by it in respect of any "TAXES" (as defined below) and such Tax Returns

are true, correct and complete in all material respects; (ii) timely and

properly paid (or has had paid on its behalf) all Taxes due and payable whether

or not shown on such Tax Returns; (iii) properly reserved for Taxes on the

Latest Balance Sheet in accordance with GAAP and unpaid Taxes with respect to

periods ending on or before the Closing Date will not exceed that reserve as

adjusted for operations and transactions through the Closing Date in accordance

with the past custom and practice of the Company and the Company Subsidiaries

and Company Tax Affiliates; and (iv) complied in all material respects with all

applicable laws, rules, and regulations relating to the withholding of Taxes and

the payment thereof (including, without limitation, withholding of Taxes under

Sections 1441 and 1442 of the Internal Revenue Code of 1986, as amended (the

"CODE") or similar provisions under any foreign laws), and timely and properly

withheld from individual employee wages or payments to any independent

contractor, creditor, shareholder or other third party and paid over to the

proper Governmental Entities all amounts required to be so withheld and paid

under all appl

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