ACQUISITION AGREEMENT

Exhibit 2.3

EXECUTION COPY

ACQUISITION AGREEMENT

among

NEVAMAR HOLDCO, LLC,

NEVAMAR COMPANY, LLC,

NEVAMAR TE S PREFERRED CORP.,

NEVAMAR TE COMMON CORP.,

NEVAMAR OFFSHORE S PREFERRED CORP.,

NEVAMAR OFFSHORE COMMON CORP.,

CERTAIN HOLDERS OF INTERESTS IN
NEVAMAR HOLDCO, LLC,

KOHLBERG MANAGEMENT IV, L.L.C., AS SELLERS’ REPRESENTATIVE

and

PANOLAM INDUSTRIES INTERNATIONAL, INC.

Dated as of January 18, 2006

TABLE OF CONTENTS

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EXHIBITS

SCHEDULES

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ACQUISITION AGREEMENT

This ACQUISITION AGREEMENT (this “ Agreement ”) is made as of the 18 ^th day of January, 2006, among (i) Nevamar Holdco, LLC, a Delaware limited liability company “ Holdco ”), (ii) Nevamar Company, LLC (the “ Company ”), (iii) Nevamar Offshore S Preferred Corp. (“ Offshore Preferred Blocker ”) Nevamar Offshore Common Corp. (“ Offshore Common Blocker ” and together with Offshore Preferred Blocker, the “ Offshore Blockers ”), Nevamar TE S Preferred Corp. (“ TE Preferred Blocker ”) and Nevamar TE Common Corp. (“ TE Common Blocker ” and together with TE Preferred Blocker, the “ TE Blockers ”), (iv) those holders of Units listed on Schedule 1 as holding Class A Units, Class B Units, Class C Units and Class S Preferred Units (the “ Taxable Sellers ” and, together with the TE Blockers and the Offshore Blockers, the “ Members ”), (v) the sole stockholders of each of the Offshore Blockers and the TE Blockers listed on Schedule 1 (the “ Blocker Sellers ” and, together with the Taxable Sellers, the “ Sellers ”), (vi) Kohlberg Management IV, L.L.C., not in an individual capacity but solely as representative for the Sellers as provided herein (the “ Sellers’ Representative ”), and (vii) Panolam Industries International, Inc., a Delaware corporation (the “ Buyer ”).

RECITALS

A.                             Each of the Members, respectively, owns the number of limited liability company interests in Holdco (the “ Units ”) set forth opposite such Member’s name on Schedule 1 hereto, which, together, constitute all of the outstanding Units in Holdco.

B.                               The Blocker Sellers own all of the outstanding Capital Stock of the TE Blockers and the Offshore Blockers (the “ Blocker Stock ”).

C.                               Each Taxable Seller desires to sell and transfer all of the Units owned by such Taxable Seller to the Buyer, each Blocker Seller desires to sell and transfer all of the Blocker Stock owned by such Blocker Seller to the Buyer, and the Buyer desires to acquire all of such Units and Blocker Stock (the “ Ownership Interests ”), all upon the terms and subject to the conditions set forth in this Agreement.

AGREEMENT

Therefore, in consideration of the foregoing and the mutual agreements and covenants set forth below, the parties hereto hereby agree as follows:

1.                              DEFINITIONS. For purposes of this Agreement:

1.1.                        Cross Reference Table. The following terms defined elsewhere in this Agreement in the Sections set forth below shall have the respective meaning therein defined:

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1.2.                   Certain Definitions . The following terms shall have the following meanings:

1.2.1.                   “ Aconcagua Earn-out ” shall mean all rights of the Company to receive or benefit from each Earn-Out Purchase Price Adjustment as such term is defined in the Asset Purchase Agreement dated as of April 28, 2004 between Aconcagua Timber Corp. and the Company.

1.2.2.                   “ Acquired Companies ” shall mean Holdco, the Company and each of their Subsidiaries.

1.2.3.                   “ Action ” shall mean any audit or investigation of which the Acquired Companies have Knowledge, or any judicial or administrative action, suit or proceeding, in either case, brought or conducted by a third-party or any Governmental Authority.

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1.2.4.                   “ Affiliate ” shall mean, as to each Acquired Company (or other specified Person), each Person directly or indirectly controlling or controlled by or under common control with such Acquired Company (or such specified Person). For purposes of this definition, the term “control” (including the terms “controlling,” “controlled by” and “under common control with”) means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting securities or otherwise.

1.2.5.                   “ Affiliated Group ” means any affiliated group within the meaning of Section 1504 of the Code or any comparable or analogous group under state, local or foreign law.

1.2.6.                   “ Aggregate Phantom Unit Payment ” shall mean the amount, as determined by Holdco prior to the Closing (and consistent with the terms of the Holdco Incentive Plan and its underlying agreements), necessary to satisfy all obligations of Holdco to the holders of Phantom Units in respect of such Phantom Units.

1.2.7.                   “ Allocation Schedule ” shall mean a schedule setting forth the portion of the Closing Date Payment payable to each party entitled to payment pursuant to Section 3.1 (iii)(a)-(e) immediately prior to the Closing.

1.2.8.                   “ Balance Sheet ” shall mean the audited consolidated balance sheet of the Acquired Companies as of December 31, 2004.

1.2.9.                   “ Balance Sheet Date ” shall mean December 31, 2004.

1.2.10.             “ Bank Debt ” shall mean all Debt (including all outstanding principal, prepayment premiums or penalties, if any, and accrued interest, fees and expenses related thereto and breakage costs) of the Acquired Companies for borrowed money, including under the Credit Agreement, dated as of December 10, 2003, by and among the Company, General Electric Capital Corporation and the other financial institutions party thereto.

1.2.11.             “ Bank Group ” shall mean any financial institution or group of financial institutions to which the Acquired Companies are indebted for Bank Debt.

1.2.12.             “ Business ” shall mean the business of the Acquired Companies as such business is currently conducted; provided , however , it shall not include the ownership or operation of the Installment Assets.

1.2.13.             “ Business Day ” shall mean any day other than a Saturday or Sunday or a day on which banking institutions in New York, New York are authorized or obligated by law or executive order to close.

1.2.14.             “ By-laws ” shall mean the corporate by-laws of a corporation, as from time to time in effect.

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1.2.15.             “ Capital Stock ” shall mean common stock, preferred stock, partnership interests, limited liability company interests or other equity or ownership interests, whether or not entitling the holder thereof to vote with respect to matters involving the issuer thereof.

1.2.16.             “ Charter ” shall mean the certificate or articles of incorporation, formation or organization or other charter or organizational documents of any Person (other than an individual), each as from time to time in effect.

1.2.17.             “ Class S Preferred Units ” shall mean the Class S Preferred Units of Holdco.

1.2.18.             “ Code ” shall mean the federal Internal Revenue Code of 1986, as amended and as in effect as of the date hereof.

1.2.19.             “ Common Units ” shall mean the Class A Units, Class B Units and Class C Units of Holdco.

1.2.20.             “ Compensation ” shall mean, as applied to any Person, all salaries, compensation, remuneration or bonuses, and all retirement, vacation, insurance or other benefits pursuant to Employee Plans, paid or provided, directly or indirectly, by the Acquired Companies to such Person or members of the immediate family of such Person.

1.2.21.             “ Consignment Equipment ” shall mean that particular Giben two pass book saw and its related control booth, transfer conveyors and stacking and unloading equipment located in Stuart, Virginia, which is currently held out for sale on consignment.

1.2.22.             “ Contractual Obligation ” shall mean, with respect to any Person, any contract, agreement, deed, mortgage, lease, license, indenture, note, bond, loan, insurance policy, sales order, purchase order or other document or instrument (including any document or instrument evidencing any indebtedness but excluding the Charter, By-laws or LLC Agreement of such Person) to which or by which such Person is legally bound.

1.2.23.             “ Debt ” of any Person means all obligations of such Person (i) for borrowed money, (ii) evidenced by notes, bonds, debentures or similar instruments, (iii) for the deferred purchase price of goods or services (other than trade payables, liabilities for Make and Hold Inventory, or accruals incurred in the Ordinary Course of Business), (iv) under capital leases, and (v) in the nature of Guarantees of the obligations described in clauses (i) through (iv) above of any other Person.

1.2.24.             “ Distribution ” shall mean, with respect to the Capital Stock of any Person, (i) the declaration or payment of any dividend on or in respect of any shares or units of any class of such Capital Stock, (ii) the purchase, redemption or other retirement of any shares or units of any class of such Capital Stock, directly, or indirectly through a Subsidiary or otherwise, and (iii) any other distribution on or in respect of any shares or units of any class of such Capital Stock or on or in respect of any stock appreciation or similar right.

1.2.25.             “ Employee Plan ” shall mean any (i) employee welfare benefit plan within the meaning of Section 3(1) of ERISA (a “ Welfare Plan ”), (ii) employee pension benefit plan

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within the meaning of Section 3(2) of ERISA (a “ Pension Plan ”), (iii) stock bonus, stock purchase, stock option, restricted stock, stock appreciation right or similar equity-based plan, agreement or arrangement or (iv) other change in control, severance, retention, deferred-compensation, retirement, welfare-benefit, bonus, incentive or material fringe-benefit plan, agreement or arrangement with respect to which any of the Acquired Companies has any liability, contingent or otherwise.

1.2.26.             “ Enforceable ” shall mean, with respect to any Contractual Obligation, that such Contractual Obligation is the legal, valid and binding obligation of the Person in question, enforceable by or against such Person, as applicable in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, other laws affecting creditors’ rights generally or general principles of equity (whether considered in a proceeding at law or in equity).

1.2.27.             “ Environmental Costs and Liabilities ” means, with respect to any Person, all liabilities, obligations, responsibilities, losses, damages, punitive damages, consequential damages, treble damages, costs and expenses (including all reasonable fees, disbursements and expenses of counsel, experts and consultants and costs of investigation and feasibility studies), fines, penalties, sanctions and interest incurred as a result of a violation of, or any liability or obligation under, any Environmental Law, whether based in contract, tort, implied or express warranty, strict liability, criminal or civil statute, including any thereof arising under any Environmental Law, Permit, order or agreement with any Governmental Authority or other Person in each case, which relates to any environmental condition or a Release or threatened Release, and results from the past operations of, or ownership of property by, such Person or any of its Subsidiaries.

1.2.28.             “ Environmental Laws ” shall mean any foreign, federal, state, local or municipal law, statute, regulation, ordinance or other legal requirement, including common law, license, consent, approval, permit or similar right granted by any Governmental Authority under any of the foregoing, imposing liability or establishing standards of conduct for protection of the environment, natural resources or human health and safety as it relates to environmental protection  or  Hazardous  Materials  (including  the  exposure  thereto),  including  the Comprehensive Environmental Response, Compensation and Liability Act (“ CERCLA ”), 42 U.S.C. § 9601 et seq., the Hazardous Materials Transportation Act, 49 U.S.C. § 1801 et seq., the Resource Conservation and Recovery Act (“ RCRA ”), 42 U.S.C. § 6901 et seq., the Clean Water Act, 33 U.S.C. § 1251 et seq., the Clean Air Act, 33 U.S.C. § 2601 et seq., the Toxic Substances Control Act, 15 U.S.C. § 2601 et seq., the Federal Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C. § 136 et seq., the Oil Pollution Act of 1990, 33 U.S.C § 2701 et seq., and the Occupational Safety and Health Act, 29 U.S.C. §650 et seq. (as it relates to exposure to Hazardous Materials) as such laws have been amended or supplemented, and the regulations promulgated pursuant thereto, and all analogous state or local statutes.

1.2.29.             “ ERISA ” shall mean the federal Employee Retirement Income Security Act of 1974 or any successor statute, as amended.

1.2.30.             “ GAAP ” shall mean generally accepted accounting principles in the United States as in effect from time to time.

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1.2.31.             “ Governmental Authority ” shall mean any domestic or foreign national, state, multi-state or municipal or other local government or any subdivision, agency, commission or authority or regulatory or administrative agency thereof or any non-governmental domestic or foreign self-regulatory agency, commission or authority or any arbitral tribunal.

1.2.32.             “ Governmental Order ” shall mean any ruling, award, decision, injunction, judgment, order, decree or subpoena entered, issued or made by any Governmental Authority.

1.2.33.             “ Guarantee ” shall mean (i) any guarantee of the payment or performance of any indebtedness or other obligation of any other Person, (ii) any other arrangement whereby credit is extended to one obligor on the basis of any Contractual Obligation of another Person (A) to pay the indebtedness of such obligor, (B) to purchase any obligation owed by such obligor, (C) to purchase or lease assets (other than inventory in the Ordinary Course of Business) under circumstances that would enable such obligor to discharge one or more of its obligations, or (D) to maintain the capital, working capital, solvency or general financial condition of such obligor, and (iii) any liability as a general partner of a partnership or as a venturer in a joint venture in respect of indebtedness or other obligations of such partnership or venture.

1.2.34.             “ HSR Act ” shall mean the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.

1.2.35.             “ Hampton Facility ” shall mean that certain facility located at One Nevamar Place, Hampton, South Carolina 29924.

1.2.36.             “Hazardous Materials ” means any material, substance or waste that is regulated, classified, or otherwise characterized under or pursuant to any Environmental Law as “hazardous,” “toxic,” “pollutant,” “contaminant,” “radioactive,” or words of similar meaning or effect, including petroleum and its by-products, or polychlorinated biphenyls, or asbestos or asbestos-containing materials.

1.2.37.             “ Installment Assets ” shall mean the Kansas Note, the Consignment Equipment, the Marsh Settlement and the Aconcagua Earn-out.

1.2.38.             “ Intangible ” shall mean any (i) patent and publicly available patent application, including all continuations, divisionals, and continuations-in-part thereof and patents issuing thereon, (ii) tradename, trademark, service mark, brand name, trade dress right, corporate name, trade style, logo and other source or business identifier, together with the goodwill associated with any of the foregoing, (iii) Internet domain name, (iv) copyright, works of authorship and moral right and all registrations, reversions, extensions and renewals thereof, and (v) trade secret and proprietary customer list.

1.2.39.             “ Kansas Note ” shall mean the promissory note in the initial principal amount of $365,000 issued to the Company by Pluswood Distributors of Kansas, Inc.

1.2.40.             “ Knowledge ” shall mean, with respect to a Person, the knowledge of the specified Person, after due inquiry. In the case of the Knowledge of the Acquired Companies,

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“Knowledge” shall mean the knowledge, after due inquiry, of each of James Tees, Pat Peyton, Kathy Clark, Robert Stevenson, Lance Rooney, Bob Buck, Jonathan Daley and Dick Schneider.

1.2.41.             “ Legal Requirement ” shall mean any federal, state, local, municipal, or foreign constitution, treaty, statute, law, ordinance, code, rule or regulation, or any Governmental Order, or any license, franchise, consent, approval, permit or similar right granted by any Governmental Authority under any of the foregoing.

1.2.42.             “ Lien ” shall mean any mortgage, pledge, lien, security interest, option, adverse charge, attachment or other similar encumbrance; provided , however , that the term “Lien” shall not include (i) statutory liens for Taxes to the extent that the payment thereof is not in arrears or otherwise due or contested in good faith in appropriate proceedings provided reserves have been established therefor on the Financial Statements in accordance with GAAP, (ii) encumbrances in the nature of zoning restrictions, easements, rights or restrictions of record on the use of real property if the same do not materially impair the continued use of such property in the Business in the manner in which it is currently used, (iii) liens to secure landlords, lessors or renters under leases or rental agreements, (iv) deposits or pledges made in connection with, or to secure payment of, worker’s compensation, unemployment insurance, old age pension programs mandated under applicable Legal Requirements or other social security regulations, (v) liens in favor of carriers, warehousemen, mechanics and materialmen arising in the Ordinary Course of Business.

1.2.43.             “ LLC Agreement ” shall mean the limited liability company agreement of any limited liability company, as from time to time in effect.

1.2.44.             “ Loss ” shall mean any and all losses, damages, deficiencies, awards, assessments, judgments, fines, penalties, costs and expenses; provided , however , that the amount of any such Losses for the purposes of indemnification hereunder shall be determined net of any amounts recovered by the Indemnitee under insurance policies with respect to such Loss (net of any expenses or Taxes with respect to such insurance recoveries) and any Tax Benefit actually realized by the Indemnitee, arising from the incurrence or payment of such Loss; provided further , that the amount of any such Loss shall be increased for any Tax Detriment actually realized by the Indemnitee, arising from the incurrence or payment of such Loss.

1.2.45.             “ Marsh Settlement ” shall mean any amount actually recovered by the Acquired Companies from Marsh & McLennan Companies, Inc. or its Affiliates in respect of the settlement agreement between Marsh & McLennan Companies, Inc., the Attorney General of the State of New York and the Superintendent of Insurance of the State of New York.

1.2.46.             “ Material Adverse Effect ” shall mean any change, effect or circumstance that is materially adverse to the Business, assets, financial condition, or results of operations of the Acquired Companies, taken as a whole, or that materially and adversely affects the ability of the Sellers to perform their obligations under this Agreement and consummate the transactions contemplated hereby; provided , however , that the term “Material Adverse Effect” shall not include the  impact of (i)  changes in laws or interpretations thereof by courts or any Governmental Authority, (ii) changes in GAAP, (iii) actions or omissions of one or more Sellers or the Acquired Companies taken with the consent of the Buyer in contemplation of the

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transactions contemplated hereby, (iv) general economic conditions and events or conditions generally affecting the decorative laminates, special laminates and thermofused melamine panel industries, so long as such conditions and events do not disproportionately affect the Acquired Companies (in comparison to the industry in general), or (v) this Agreement or the announcement hereof.

1.2.47.             “ Net Proceeds ” shall mean the difference, which shall not be less than zero, between (i) the sum of the total amount of cash received in respect of any Installment Asset, and (ii) all reasonable costs incurred by the Buyer, the Purchased Entities or any of their Affiliates or any of their successors or assigns to dispose of such Installment Asset and the Taxes, if any, incurred by Buyer, the Purchased Entities or any of their Affiliates or any of their successors or assigns as a result of the sale of an Installment Asset.

1.2.48.             “ Odenton Asset Schedule ” shall mean a schedule, prepared by the Buyer pursuant to Section 7.11, which sets forth a complete list of the Odenton Assets and the treatment of such assets following the Closing.

1.2.49.             “ Odenton Assets ” shall mean the equipment and other assets of the Company located at the Odenton Facility as of the date hereof.

1.2.50.             “ Odenton Facility ” shall mean the real property, buildings, improvements and fixtures at the Company’s manufacturing facility located at 8339 Telegraph Road, Odenton, Maryland 21113, but specifically excluding the equipment and other assets of the Company located at such facility.

1.2.51.             “ Ordinary Course of Business ” shall mean the ordinary course of the Business, consistent with past practices.

1.2.52.             “ Percentage ” shall mean, (i) as to each Taxable Seller (calculated as of the Closing Date), a percentage equal to (A) the number of Common Units owned by such Seller divided by (B) the total number of Common Units and (ii) as to each Blocker Seller (calculated as of the Closing Date), a percentage equal to (A) the number of Common Units owned by the Offshore Blockers or the TE Blockers, as applicable, divided by (B) the total number of Common Units.

1.2.53.             “ Person ” shall mean any individual, partnership, corporation, limited liability company, association, trust, joint venture, unincorporated organization, labor union or other entity other than any Governmental Authority.

1.2.54.             “ Phantom Units ” shall mean the Phantom Units issued by Holdco under the Holdco Executive Unit Incentive Plan (the “ Holdco Incentive Plan ”).

1.2.55.             “ Price Per Common Unit ” shall mean (i) the portion of the Closing Date Payment remaining after giving effect to the payments made by the Buyer pursuant to Sections 3.1(i), 3.1(ii) and 3.1(iii)(a)-(d)  divided by (ii) the number of Common Units outstanding as of the Closing Date.

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1.2.56.             “ Price Per Preferred S Unit ” shall mean an amount equal to the Preferred Unit Preference Amount (as defined in the Holdco LLC Agreement).

1.2.57.             “ Purchased Entities ” means the TE Blockers, the Offshore Blockers and the Acquired Companies.

1.2.58.             “ Release ” means any release, spill, emission, leaking, injection, deposit, disposal, discharge, dispersal, leaching or migration.

1.2.59.             “ Subsidiary ” shall mean any Person of which Holdco or the Company (or other specified Person) owns directly or indirectly, through a Subsidiary, a nominee arrangement or otherwise, at least a majority of the outstanding Capital Stock entitled to vote generally or otherwise has the power to elect a majority of the board of directors or similar governing body or act as the general partner or manager or has the legal power to direct the business or policies of such Person.

1.2.60.             “ Tax ” shall mean (i) any federal, state, local or foreign income, gross receipts, franchise, withholding, estimated, alternative minimum, add-on minimum, sales, use, transfer, registration, value added, ad valorem, excise, severance, stamp, occupation, premium, windfall profit, custom, duty, real property, personal property, capital stock, social security, employment, unemployment, disability, payroll, license, employee or other tax, including all interest, fines, penalties and additions with respect to any of the foregoing, and (ii) any liability in respect of any items described in clause (i) payable by reason of contract, assumption, transferee liability, operation of law, Treas. Reg. Section 1502-6(a) (or any predecessor or successor thereof) or any analogous or similar provision of state, local or foreign law, or otherwise.

1.2.61.             “ Tax Benefit ” shall mean any refund, credit or reduction in Tax realized or to be realized by any Person.

1.2.62.             “ Tax Detriment ” shall mean any increase in Tax (including, without limitation, any reduction in refund, credit or deduction) realized or to be realized by a Person.

1.2.63.             “ Tax Return ” shall mean any federal, state, local and foreign return, report, statement or form relating to any Tax and any claim for refund of Tax, and any declaration of estimated Tax, and any schedule or attachment to any of the foregoing or amendment thereto, including, where permitted or required, any consolidated, combined or unitary returns for any group of entities.

1.2.64.             “ Transaction Expenses ” shall mean all unpaid fees and expenses incurred by the Purchased Entities or the Blocker Sellers (at or prior to the Closing) in connection with the preparation of the Purchased Entities for sale and the negotiation and preparation of this Agreement, related agreements and the transactions contemplated hereby and thereby, including the fees and expenses of Kohlberg Management IV, L.L.C., Ropes & Gray LLP, Wilmer Cutler Pickering Hale and Dorr LLP and PricewaterhouseCoopers LLP and any amounts payable pursuant to any retention, success bonus or similar agreements as a result of the consummation of this Agreement and the transactions contemplated hereby (including, without limitation, those

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retention, success bonus or similar agreements listed on Schedule 5.10) . In no event shall Transaction Expenses include payments under any severance agreements, which shall be the sole responsibility of the Buyer.

1.2.65.             “ WARN ” shall mean the federal Worker Adjustment and Retraining Notification Act or any substantially similar state statute (or any successor statutes thereof).

1.2.66.             “ Working Capital ” shall mean the amount equal to (i) current assets of the Acquired Companies including cash minus (ii) current liabilities of the Acquired Companies less current maturity of long-term debt and less any Transaction Expenses or other liabilities to be paid pursuant to Section 3.1 that constitute current liabilities, calculated in accordance with GAAP, using the same policies, principles and methodology used in connection with the preparation of the Financial Statements and in accordance with the methodology set forth in Exhibit 3.4 attached hereto. To the extent of any inconsistency between the methodology described on Exhibit 3.4 and that used in the preparation of the Financial Statements, the terms of Exhibit 3.4 will govern.

1.3.                   Certain Matters of Construction . In addition to the definitions referred to or set forth in this Section 1:

1.3.1.                   The words “hereof”, “herein”, “hereunder” and words of similar import shall refer to this Agreement as a whole and not to any particular Section or provision of this Agreement, and reference to a particular Section of this Agreement shall include all subsections thereof.

1.3.2.                   The words “party” and “parties” shall refer to the Sellers, Holdco, the Company, the TE Blockers, the Offshore Blockers and the Buyer.

1.3.3.                   Definitions shall be equally applicable to both the singular and plural forms of the terms defined, and references to the masculine, feminine or neuter gender shall include each other gender.

1.3.4.                   Accounting terms used herein and not otherwise defined herein are used herein as defined by GAAP in effect as of the date hereof, consistently applied.

1.3.5.                   The word “including” shall mean including without limitation.

2.                              ACQUISITION.

Upon the terms and subject to the conditions contained herein, on the Closing Date, (i) each of the Taxable Sellers severally will sell, transfer and deliver to the Buyer, free and clear of any Liens, the number of each class of Units set forth opposite such Taxable Seller’s name on Schedule 1 , (ii) each Blocker Seller will sell, transfer and deliver to the Buyer, free and clear of any Liens, all of the Capital Stock of the TE Blockers and the Offshore Blockers, respectively, owned by such Blocker Seller, and (iii) the Buyer will pay the Enterprise Value (excluding any payment relating to the Installment Assets) as set forth herein and purchase and acquire from each Seller such Ownership Interests.

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3.                           PAYMENT AND CLOSING.

3.1.                        Enterprise Value . The aggregate amount to be paid by the Buyer in respect of the Ownership Interests shall be $80,000,000, as adjusted pursuant to Section 3.1.1, which amount shall be paid at the closing (the “ Closing Date Payment ”), plus the amounts to be paid to the Sellers in respect of the Installment Assets as determined in accordance with Section 3.1.2 (the “ Installment Payments ,” together with the Closing Date Payment, and as further adjusted pursuant to Section 3.5, the “ Enterprise Value ”). At the Closing, the Buyer shall pay the Closing Date Payment in the form of:

(i)                        $5,000,000 in initial aggregate principal amount of junior subordinated notes of the Buyer in the form attached hereto as Exhibit 3.1 (the “ Seller Notes ”) issued to the Sellers to be used to indemnify the Buyer, with any remainder to be paid to the Sellers in accordance with their respective Percentages upon the maturity of the Seller Notes;

(ii)                     $1,000,000 (the “ Escrow Amount ”) to be held in escrow to satisfy any adjustment to the Closing Date Payment pursuant to Section 3.5; and

(iii)                  pursuant to the Allocation Schedule that shall have been provided to the Buyer not less than five (5) Business Days prior to the Closing Date, the remainder of the Closing Date Payment by wire transfer of immediately available funds:

a.                           to such account or accounts as specified by each Bank Group in its pay-off letter with respect to the Bank Debt as contemplated by Section 8.9, an amount sufficient to prepay in full the Company’s outstanding Bank Debt;

b.                          to such account or accounts as the Company specifies, an amount sufficient to pay the Transaction Expenses;

c.                           to such account or accounts of the holders of Phantom Units as the Company specifies, an amount sufficient to pay the Aggregate Phantom Unit Payment;

d.                          to such account or accounts as each Seller (or the Sellers’ Representative) specifies, an amount equal to (1) the Price Per Preferred S Unit multiplied by (2) the number of Class S Preferred Units owned by such Seller (or, in the case of a Blocker Seller, the number of Class S Preferred Units owned by the TE Blockers and the Offshore Blockers, respectively) immediately prior to the Closing; and

e.                           to such account or accounts specified on the Allocation Schedule, an amount equal to (1) the Price Per Common Unit multiplied by (2) the number of Common Units owned by such Seller (or, in the case of a Blocker Seller, the number of Common Units owned by the TE Blockers and the Offshore Blockers, respectively) immediately prior to the Closing (the amount paid pursuant to this subsection (E) is referred to herein as the “ Common Purchase Price ” and shall be subject to further adjustment after the Closing in accordance with Section 3.5 below).

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3.1.1.                   Working Capital Adjustment . Not less than five (5) Business Days prior to the Closing Date, the Sellers’ Representative, on behalf of the Sellers, will prepare a good faith estimate (the “ Estimated Closing Working Capital Amount ”) of the Working Capital of the Acquired Companies as of 11:59 p.m. on the Business Day immediately preceding the Closing (the “ Balance Sheet Time ”), determined in accordance with Section 3.4.1, as if it were the actual Closing Working Capital Amount but based on the Sellers’ Representative’s review of financial information then reasonably available to the Sellers’ Representative and inquiries of personnel responsible for the preparation of the financial information of the Company in the ordinary course. Buyer will have an opportunity to review and challenge any aspect of the Estimated Closing Working Capital Amount prior to the Closing Date. The Closing Date Payment will be reduced or increased, as the case may be, by the amount by which the Estimated Closing Working Capital Amount is less than or more than $31,851,000.

3.1.2.                   Installment Assets Adjustment . Until the third anniversary of the Closing Date, whenever the Buyer, any of the Acquired Companies or any of their successors or assigns sells, disposes of or otherwise receives any payment or other consideration in respect of any of the Installment Assets, then the Buyer, the Acquired Companies or their successors or assigns, as the case may be, shall promptly, and in any event within three (3) Business Days, turn over and pay to the Sellers, in accordance with their respective Percentages, all of the Net Proceeds from such sale, disposition or payment.

3.2.                   Time and Place of Closing . The consummation of the transactions described above (the “ Closing ”) shall take place at the offices of Ropes & Gray LLP in Boston, Massachusetts, at 10:00 a.m. (local time) on February 28, 2006 or, if all conditions precedent to Closing set forth in Sections 8 and 9 hereof shall not have been satisfied at such date, two (2) Business Days after the satisfaction or waiver of all conditions precedent to Closing intended to be satisfied prior to Closing (the day on which the Closing takes place being referred to herein as the “ Closing Date ”).

3.3.                   Delivery . At the Closing: (i) each of the Taxable Sellers shall deliver to the Buyer any certificate or certificates evidencing all of the Units owned by such Seller, together with a duly executed transfer power; (ii) each of the Blocker Sellers shall deliver to the Buyer the certificate or certificates evidencing all of the Capital Stock of the TE Blockers and the Offshore Blockers, respectively, together with a duly executed stock power; and (iii) each party will deliver to the other such certificates and other documents as are contemplated hereby.

3.4.                   Post-Closing Adjustment Mechanics .

3.4.1.                   As soon as practicable (and in no event later than sixty (60) days after the Closing), the Buyer shall prepare or cause to be prepared (a) a consolidated balance sheet of the Acquired Companies as of the Balance Sheet Time (the “ Closing Balance Sheet ”) and (b) a statement of the Working Capital of the Acquired Companies reflected on the Closing Balance Sheet (the “ Closing Working Capital Amount ”). The Closing Balance Sheet and the Closing Working Capital Amount will be prepared and determined in accordance with GAAP, using the same policies, principles and methodology used in connection with the preparation of the Financial Statements and in accordance with the methodology set forth in Exhibit 3.4 attached hereto. To the extent of any inconsistency between the methodology described on Exhibit 3.4

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and that used in the preparation of the Financial Statements, the terms of Exhibit 3.4 will govern. Following such preparation, the Buyer shall deliver the Closing Balance Sheet and Closing Working Capital Amount to the Sellers’ Representative for review by the Sellers’ Representative; provided , however , that such delivery shall in no event be later than sixty (60) days after the Closing. In connection with the preparation and review of the Closing Balance Sheet and the Closing Working Capital Amount, the Buyer and the Sellers shall each provide the other party and their representatives with reasonable access to the personnel, books, records, documents and other information of the Acquired Companies. For thirty (30) days from the date of delivery of the Closing Balance Sheet and Closing Working Capital Amount, Buyer and Sellers’ Representative shall work in good faith to agree on the Closing Balance Sheet and the Closing Working Capital Amount.

3.4.2.                   If the Buyer and the Sellers’ Representative cannot agree on the final Closing Balance Sheet and the Closing Working Capital Amount within thirty (30) days from the date of delivery of the Closing Balance Sheet and Closing Working Capital Amount, the parties shall submit their final calculations of the items in dispute to an arbitrator (the “ Arbitrator ”) who shall be an independent certified public accountant (with significant public accounting experience, including in the context of business combinations) and be appointed by agreement of the Buyer and the Sellers’ Representative or, failing such agreement, by the American Arbitration Association (the “ AAA ”) in accordance with the Commercial Arbitration Rules (the “ Arbitration Rules ”) of the AAA. The Arbitrator shall review such final calculations and make a selection as to which of the final calculations presented to it is, by dollar value in the aggregate, more accurate. The decision of the Arbitrator shall be made in accordance with the Arbitration Rules and in accordance with the terms of this Agreement, including the procedures set forth on Exhibit 3.4 . The decision of the Arbitrator shall be made within thirty (30) days after being engaged, or as soon thereafter as reasonably practicable, and shall be final and binding on the parties. The costs and expenses of the Arbitrator shall be paid by the party whose proposed calculation is not selected by the Arbitrator. The Buyer and the Sellers shall make available to the Arbitrator all relevant books and records relating to the calculations submitted and all other information reasonably requested by the Arbitrator.

3.5.                   Adjustments to the Enterprise Value . Upon the final determination of the Closing Working Capital Amount, the Enterprise Value will be adjusted as follows:

3.5.1.                   If the Closing Working Capital Amount exceeds the Estimated Closing Working Capital Amount, then the Enterprise Value will be increased by, and the Buyer will pay each Seller its applicable Percentage of, the amount of such difference, provided that in no event shall the Enterprise Value be increased by more than $1,000,000 as a result of any such difference.

3.5.2.                   If the Closing Working Capital Amount is less than the Estimated Closing Working Capital Amount, then the Enterprise Value will be decreased by the amount of such difference, provided that in no event shall the Enterprise Value be decreased by more than $1,000,000 as a result of any such difference. Each Seller shall be severally liable for its respective Percentage of any amounts owed pursuant to this Section 3.5.2, and such amount shall be paid to the Buyer from the Escrow Amount by the Sellers’ Representative on behalf of the Sellers. The Escrow Amount shall be held and distributed pursuant to the terms of the Escrow

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Agreement in substantially the form attached hereto as Exhibit 3.5.2 (the “ Escrow Agreement ”), but shall terminate no later than five days after the final determination of the Closing Working Capital Amount.

Any payment in respect of the adjustment required to be made pursuant to this Section 3.5 will be made by the Buyer, by the Sellers or by the Sellers’ Representative on behalf of the Sellers, as applicable, in cash by wire transfer of immediately available funds to an account or accounts specified by the Buyer or the Sellers, as applicable, in writing, within five (5) Business Days after the final determination of the Closing Working Capital Amount.

3.6.                   Allocation of Purchase Price .

3.6.1.                   For purposes of determining Buyer’s initial tax basis in the Acquired Companies immediately following the Closing and the gain recognized by Sellers as a result of the transfer of the Acquired Companies to Buyer, the Parties agree that the amount of the Enterprise Value paid to the Sellers under Sections 3.1(iii)(d) and (e) (the “ Purchase Price ”) shall be allocated 2.86% to the Offshore Blockers, 37.60% to the TE Blockers and 59.54% to the Ownership Interests held by the Taxable Sellers. With respect to the portion of the Purchase Price that is allocable to the Ownership Interests held by the Taxable Sellers, Buyer will provide to the Sellers’ Representative within sixty (60) days after the Closing Date a schedule that sets forth Buyer’s proposed allocation of such amount for tax purposes among Holdco’s and the Company’s assets (the “ Allocation Statement ”). Within thirty (30) days after the receipt of such Allocation Statement, the Sellers’ Representative will propose to Buyer any changes that it believes should be made to the Allocation Statement (and in the event no such changes are proposed in writing to Buyer within such time period, the Sellers’ Representative will be deemed to have agreed to, and accepted, the Allocation Statement). Sellers’ Representative and Buyer will make a good faith attempt to resolve any differences with respect to the Allocation Statement within fifteen (15) days after Buyer’s receipt of written notice of objection from the Sellers’ Representative. If Buyer and the Sellers’ Representative are unable to resolve their differences with respect to the Allocation Statement within such fifteen (15) day period, then any remaining disputed matters will be conclusively determined by the Arbitrator and Buyer and the Sellers’ Representative shall each be responsible for 50% of the fees paid to the Arbitrator. The decision of the Arbitrator shall be made within thirty (30) days after being engaged, or as soon thereafter as reasonably practicable, and shall be final and binding on the parties.

3.6.2.                   The Parties agree to report the allocation of the total consideration among the Company’s assets in a manner consistent with the Allocation Statement and agree to act in accordance with the Allocation Statement in the preparation and filing of all Tax Returns and in the course of any Tax audit, Tax review or Tax litigation relating thereto; provided,   however, that neither Sellers nor Buyer will be obligated to appeal or litigate any challenge to such allocation of the Purchase Price by a Governmental Authority.

3.6.3.                   The Parties will promptly inform one another of any challenge by any Governmental Authority to any allocation made pursuant to this Section 3.6 and agree to consult and keep one another informed with respect to the status of, and any discussion, proposal or submission with respect to, such challenge.

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4.                              REPRESENTATIONS AND WARRANTIES OF THE SELLERS. Each Seller, solely as to itself, and, with respect to Section 4.7, the sole stockholders of the TE Blockers and the Offshore Blockers, respectively, severally represents and warrants that:

4.1.                        Organization and Authority . In the case of a Seller that is not an individual, such Seller is an entity duly formed, validly existing and in good standing under the laws of the jurisdiction of its organization. Such Seller has full power and authority to enter into this Agreement and to perform its obligations hereunder and to consummate the transactions contemplated hereby.

4.2.                        Authorization and Enforceability . This Agreement has been duly authorized, executed and delivered by such Seller and, assuming the due authorization, execution and delivery by the other parties hereto, is Enforceable against such Seller.

4.3.                        Non-Contravention, Consents of Third Parties . Except as set forth in Schedule 4.3 , the execution and delivery of this Agreement by such Seller and the consummation by such Seller of the Closing hereunder in accordance with the terms and conditions of this Agreement do not and will not conflict with or result in the breach of any of the terms or provisions of, or constitute a default under, any applicable Charter or By-laws of such Seller, any Contractual Obligation to which such Seller is a party or by which such Seller is, or the Ownership Interests to be sold by such Seller hereunder are, bound or any Legal Requirement applicable to such Seller or to the Ownership Interests to be sold by such Seller. Assuming expiration or termination of all applicable waiting periods under the HSR Act, no consent or approval is required to be obtained by such Seller in connection with the execution, delivery and performance of this Agreement by such Seller or the sale of the Ownership Interests to be sold by such Seller as contemplated hereby, except as set forth in Schedule 4.3 , and other than any consent where the failure of such Seller to obtain such consent would not adversely affect the Seller’s ability to consummate the Closing hereunder in accordance with the terms and conditions of this Agreement.

4.4.                        Title to Securities . Except as set forth on Schedule 4.4 , such Seller is the record and beneficial owner of and has good and valid title to the Ownership Interests set forth opposite such Seller’s name on Schedule 1 , free and clear of any Liens.

4.5.                        Voting Trusts, etc . Except for the LLC Agreement of Holdco and except as set forth on Schedule 4.5 , there are no voting trusts, shareholder agreements, commitments, undertakings, understandings, proxies or other restrictions to which such Seller is a party which directly or indirectly restrict or limit in any manner, or otherwise relate to, the voting, sale or other disposition of any shares of Capital Stock of the Acquired Companies.

4.6.                        Brokers . Each Seller other than the Bank Member represents that no broker, finder, investment bank or similar agent is entitled to any brokerage or finder’s fee from any of the Purchased Entities or such Seller (other than the Bank Member) in connection with the transactions contemplated by this Agreement based upon agreements or arrangements made by or on behalf of any of the Purchased Entities or such Seller (other than the Bank Member) or their respective Affiliates. The Bank Member represents that no broker, finder, investment bank or similar agent is entitled to any brokerage or finder’s fee from any of the Purchased Entities or

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the Bank Member in connection with the transactions contemplated by this Agreement based upon agreements or arrangements made by the Bank Member or its Affiliates..

4.7.                   Blocker Seller Matters .

4.7.1.                   Organization of the TE Blockers . The sole stockholder of each of the TE Blockers severally represents and warrants that each TE Blocker (i) is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Delaware, (ii) is qualified to do business in every jurisdiction in which it owns or leases real property and each other jurisdiction in which the conduct of its business or the ownership of its properties requires such qualification or authorization, and (iii) has the corporate power and authority to own, operate or lease its properties and to carry on its business in all material respects as currently conducted and to carry out the transactions contemplated by this Agreement.

4.7.2.                   Title to the TE Blockers Stock . The sole stockholder of each of the TE Blockers severally represents and warrants that the entire authorized Capital Stock of each TE Blocker consists of 1,000 shares of common stock, of which 100 shares are issued and outstanding. The shares listed on Schedule 4.7 constitute all of the issued and outstanding shares of each TE Blocker, and such shares are duly authorized, validly issued and are fully paid and non-assessable. Except for the rights of the Buyer under this Agreement and as set forth on Schedule 4.7 , there is no unexercised option, warrant, subscription right, conversion right, exchange right or other right of any Person to acquire Capital Stock of the TE Blockers.

4.7.3.                   TE Blockers Assets and Liabilities; Business . The sole stockholder of each of the TE Blockers severally represents and warrants that each TE Blocker has no assets or liabilities other than its Units and liabilities for Taxes resulting therefrom, and has never conducted any business other than owning the Units.

4.7.4.                   Organization of the Offshore Blockers . The sole stockholder of each of the Offshore Blockers severally represents and warrants that each Offshore Blocker (i) is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Delaware, (ii) is qualified to do business in every jurisdiction in which it owns or leases real property and each other jurisdiction in which the conduct of its business or the ownership of its properties requires such qualification or authorization, and (iii) has the corporate power and authority to own, operate or lease its properties and to carry on its business in all material respects as currently conducted and to carry out the transactions contemplated by this Agreement.

4.7.5.                   Title to the Offshore Blockers Stock . The sole stockholder of each of the Offshore Blockers severally represents and warrants that the entire authorized Capital Stock of each Offshore Blocker consists of 1,000 shares of common stock, of which 100 shares are issued and outstanding. The shares listed on Schedule 4.7 constitute all of the issued and outstanding shares of each Offshore Blocker, and such shares are duly authorized, validly issued and are fully paid and non-assessable. Except for the rights of the Buyer under this Agreement and as set forth on Schedule 4.7 , there is no unexercised option, warrant, subscription right, conversion right, exchange right or other right of any Person to acquire Capital Stock of the Offshore Blockers.

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4.7.6.                   Offshore Blockers Assets and Liabilities; Business . The sole stockholder of each of the Offshore Blockers severally represents and warrants that each Offshore Blocker has no assets or liabilities other than its Units and liabilities for Taxes resulting therefrom, and has never conducted any business other than owning the Units.

4.8.                   Purchase for Investment . Each Seller is acquiring its respective Seller Note for investment in its own account and not with a view to the public resale of all or any part thereof in any transaction which would constitute a “distribution” within the meaning of the Securities Act of 1933, as amended (the “ Securities Act ”).

4.9.                   Seller Qualifications . Each Seller (i) is able to bear the complete loss of its investment in its Seller Note, (ii) has such knowledge and experience in financial or business matters that it is capable of evaluating the merits and risks of its investment in the Seller Note and (iii) acknowledges that its Seller Note has not been registered under the Securities Act. Each Seller listed as a Kohlberg Member or a Bank Member on Schedule 1 is an “accredited investor” (as defined in Regulation D promulgated under the Securities Act).

5.                              REPRESENTATIONS AND WARRANTIES RELATING TO THE ACQUIRED COMPANIES. The Company and Holdco represent and warrant that except as disclosed on the Disclosure Schedules:

5.1.                   Organization, Power, Standing and Authority . Each of the Acquired Companies is a limited liability company, duly organized, validly existing and in good standing under the laws of the State of Delaware, and has all requisite power and authority to execute, deliver and perform this Agreement, to own its property (in the case of the Company), to carry on the Business as currently conducted and to consummate the transactions contemplated hereby. The Acquired Companies have heretofore made available to the Buyer a true and complete copy of each such entity’s (i) Charter and LLC Agreement, (ii) minute books, and (iii) stock ledger (or equivalent document), each of which is accurate and complete through the date hereof. Each of the Acquired Companies is duly qualified or licensed to do business as a foreign corporation, and is in good standing as such, in each jurisdiction where the failure to be so qualified or licensed and in good standing would reasonably be expected to have a Material Adverse Effect. The execution, delivery and performance of this Agreement by the Company and Holdco have been duly authorized by all necessary limited liability company, corporate or other action of the Acquired Companies. This Agreement has been duly executed and delivered by the Company and Holdco and, assuming the due authorization, execution and delivery by the other parties hereto, is the legal, valid and binding obligation of the Company and Holdco, Enforceable against the Company and Holdco in accordance with its terms.

5.2.                   Capitalization and Subsidiaries .

5.2.1.                   As of the date hereof, the total Capital Stock issued and outstanding of the Company (including a list of the record holders of the membership interests of the Company and the number of units held) is set forth on Schedule 1 . All of such outstanding Capital Stock of the Company is duly authorized, validly issued, fully paid and nonassessable.

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5.2.2.                   As of the date hereof, the total Capital Stock issued and outstanding of Holdco (including a list of the record holders of the membership interests of Holdco and the number of units held) is set forth on Schedule 1 . All of such outstanding Capital Stock of Holdco is duly authorized, validly issued, fully paid and nonassessable.

5.2.3.                   Except as set forth on Schedule 5.2 , there is no Contractual Obligation or LLC Agreement provision which obligates the Acquired Companies to issue, purchase or redeem, or make any payment in respect of, any Capital Stock or other securities convertible into or exchangeable for Capital Stock or which provides for any membership unit appreciation or similar right or grants any right to share in the equity, income, revenues or cash flow of the Acquired Companies.

5.2.4.                   Except as set forth on Schedule 5.2 , there are no voting trusts, shareholder agreements, commitments, undertakings, understandings, proxies or other restrictions to which any Acquired Company is a party which directly or indirectly restrict or limit in any manner, or otherwise relate to, the voting, sale or other disposition of any Capital Stock of any Company.

5.2.5.                   Except as set forth on Schedule 5.2 , none of the Acquired Companies has any Subsidiary.

5.3.                   Financial Statements, etc .

5.3.1.                   Financial Information . The Company has heretofore delivered to the Buyer true and complete copies of each of the following:

5.3.1.1.                     The audited consolidated balance sheets of the Acquired Companies as of December 31, 2003 and 2004, and the statements of operations, of members’ equity (deficiency), and of cash flow for the respective fiscal years ended December 31, 2003 and 2004, together with the notes thereto, each accompanied by the audit report of PricewaterhouseCoopers LLP (the “ Year End Financials ”).

5.3.1.2.                     An unaudited consolidated financial statement of the Acquired Companies, consisting of a consolidated balance sheet as of November 30, 2005, and the related statement of operations for the eleven month period ending on that date (the “ Interim Financials ” and together with the Year End Financials, the “ Financial Statements ”).

5.3.2.                   Character of Financial Information . Except as set forth on Schedule 5.3 , the Financial Statements (including the notes thereto) were prepared in accordance with GAAP consistently applied throughout the periods specified therein, and present fairly, in all material respects, the financial position and results of operations of the Acquired Companies for the periods specified therein, subject in the case of the Interim Financials to the absence of notes and normal year-end adjustments.

5.3.3.                   No Undisclosed Liabilities . The Company has no indebtedness, obligations or liabilities of any kind (whether accrued, absolute, contingent or otherwise, and whether due or to become due) that would have been required by GAAP to be reflected in,

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reserved against or otherwise described in the Financial Statements or in the notes thereto other than those that were reflected in, reserved against or otherwise described in the Financial Statements or the notes thereto or were incurred after November 30, 2005 in the Ordinary Course of Business.

5.4.                        Title to Assets . The Acquired Companies have good and marketable title to or, in the case of property held under lease or any other Contract, a valid and Enforceable right to use, all of the properties, rights and assets reflected on the Balance Sheet (collectively, the “ Assets ”), except for Assets which have been sold or otherwise disposed of since the Balance Sheet Date as described under Section 5.11 hereof or in the Ordinary Course of Business. The Assets are not subject to any Lien other than Liens described on Schedule 5.4. To the Knowledge of the Company the tangible Assets are, in all material respects, in good working order, operating condition and state of repair, ordinary wear and tear excepted. Holdco does not hold any assets other than the Capital Stock in the Company.

5.5.                        Licenses, Permits, Compliance with Laws . The Acquired Companies hold all licenses, permits, franchises and other authorizations (the “ Permits ”) under any Legal Requirement necessary for the conduct of the Business as currently conducted, except Permits, the failure of which to have been obtained has not had and would not reasonably be excepted to have a Material Adverse Effect The operations of the Business as heretofore and currently conducted were not and are not in violation of, nor is any Acquired Company in default or violation under, any Legal Requirement, Charter or LLC Agreement, as applicable except for such violations or defaults as have not had and would not reasonably be expected to have a Material Adverse Effect. The Acquired Companies have not received any written or other notice or been charged with the material violation of any Legal Requirement. To the Knowledge of the Acquired Companies, none of the Acquired Companies are under investigation with respect to the violation of any Legal Requirement and, to the Knowledge of the Acquired Companies, there are no facts or circumstances which could form the basis for any such violation. This Section does not relate to tax matters, employee benefits matters or environmental matters, which are specifically provided for in other Sections of this Agreement.

5.6.                        Non-Contravention, Consents of Third Parties . The execution, delivery and performance of this Agreement by the Acquired Companies and the consummation by the Acquired Companies of the Closing hereunder in accordance with the terms and conditions of this Agreement do not and will not result in or give rise to (i) a breach of or a default or violation under any provision of such entity’s LLC Agreement or Charter or under any Legal Requirement or (ii) except as set forth on Schedule 5.6 or as would not reasonably be expected to have a Material Adverse Effect, (A) a breach or violation under any provision of any Contract of any Acquired Company, (B) the acceleration of the time for performance of any obligation under any such Contract, (C) the imposition of any Lien upon or the forfeiture of any asset of any Acquired Company (including any such asset held under a lease or license) or (D) a requirement that any consent under, or waiver of, any such Contract or LLC Agreement provision be obtained.

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5.7.                   Real Property .

5.7.1.                   Schedule 5.7 sets forth a list of the addresses of each location at which any furniture, fixtures, equipment or inventory is located or where any Acquired Company has an office or other place of business.

5.7.2.                   Schedule 5.7 sets forth a list of all the real property owned by the Acquired Companies. In addition:

5.7.2.1.                     each Acquired Company has good and marketable title to all real property owned by it, free and clear of all Liens except as set forth on Schedule 5.7 ;

5.7.2.2.                     no Acquired Company is in violation of any zoning, building or safety ordinance, regulation or requirement applicable to the operation of the property owned by it; and

5.7.2.3.                     each Acquired Company has received all approvals of governmental authorities (including licenses and permits) required in connection with its operations at the real property owned by it.

5.7.3.                   Schedule 5.7 lists all contracts for the lease or sublease of real property by the Acquired Companies currently in effect (the “ Leases ”). The Acquired Companies have made available to the Buyer correct and complete copies of the Leases (as amended to date). With respect to each Lease:

5.7.3.1.                     the Lease is Enforceable;

5.7.3.2.                     except as set forth on Schedule 5.7 , neither the Acquired Companies nor any other party to the lease or sublease is in material breach or default, and no event has occurred (including the failure to obtain any consent) which, with notice or lapse of time or both, would constitute a material breach or default or permit termination, modification, or acceleration thereunder or impair any right of the Acquired Companies to exercise and obtain the benefit of any options contained in such Lease;

5.7.3.3.                     with respect to each Lease that is a sublease, the representations and warranties set forth in subsections 5.7.3.1 through 5.7.3.2 above are true and correct with respect to the underlying Lease; and

5.7.3.4.                     all facilities leased or subleased thereunder have received all approvals of governmental authorities (including licenses and permits) required in connection with the operation thereof and have been operated and maintained in accordance with applicable laws, rules, and regulations.

5.7.4.                   Schedule 5.7 sets forth a list of all the real property previously owned by the Acquired Companies since July 1, 2002.

5.8.                   Litigation . Except as set forth on Schedule 5.8 , (i) there is no Action pending or threatened in writing against the Acquired Companies or any property or assets of the Acquired Companies and (ii) none of the Acquired Companies are subject to any judgment, decree, writ,

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injunction or order of any Governmental Authority, nor is an Acquired Company subject to any settlement agreement or stipulation.

5.9.                   Intellectual Property Rights .

5.9.1.                   Owned Intangibles . Schedule 5.9.1 lists all material Intangibles that are owned by the Acquired Companies in connection with the Business (the “ Owned Intangibles ”). Schedule 5.9.1 further sets forth (i) the record owner of each Owned Intangible, (ii) the jurisdiction in which each Owned Intangible has been issued, registered or in which any such application for such issuance and registration has been filed, and (iii) the registration or application date, as applicable. Except as disclosed on Schedule 5.9.1 , (i) the Acquired Companies possess all right, title and interest in and to each Owned Intangible, free and clear of any Lien, (ii) to the Knowledge of the Acquired Companies, the ownership and uses, as the case may be, by the Acquired Companies of any Owned Intangibles do not infringe, misappropriate, or violate any Intangibles of any third party, (iii) the Owned Intangibles are not subject to any outstanding injunction, charge, judgment, order, decree, ruling or stipulation, (iv) no Action is pending or, to the Knowledge of the Acquired Companies, threatened which challenges the legality, validity, enforceability, use or ownership of the Owned Intangibles, (v) there is no license or other Contractual Obligation under which any Acquired Company is a licensor with respect to any Owned Intangible and (vi) to the Knowledge of the Acquired Companies, no activity of any third party infringes upon or is a misappropriation of the rights of the Acquired Companies with respect to any Owned Intangible.

5.9.2.                   Licensed Intangibles . Schedule 5.9.2 lists all material Intangibles not owned by the Acquired Companies which are used in the Business, other than commercially available computer software programs licensed under “shrink wrap” or other comparable standard form licenses (the “ Licensed Intangibles ”), and lists each license or other Contractual Obligation under which any Licensed Intangible is used by the Acquired Companies (collectively, the “ Licenses ”). The Acquired Companies have valid rights to use the Licensed Intangibles. Except for such exceptions as have not had and would not reasonably be expected to have a Material Adverse Effect, to the Knowledge of the Acquired Companies, (i) the use by the Acquired Companies of the Licensed Intangibles does not infringe upon or misappropriate any rights of any third party, (ii) each License is legal, valid, binding, Enforceable and in full force and effect, (iii) no party to a License is in breach or default thereof, (iv) the Intangibles underlying each License are not subject to any outstanding injunction, charge, judgment, order, decree, ruling or stipulation and (v) no activity of any third party infringes upon or is a misappropriation of the rights of the Acquired Companies with respect to any of the Licenses.

5.9.3.                   Miscellaneous . The Owned Intangibles and the Licensed Intangibles include all of the Intangibles necessary to enable the Acquired Companies to conduct the Business in the manner in which it is currently being conducted. The Acquired Companies have taken reasonable security measures to protect the secrecy and confidentiality of all trade secrets of the Acquired Companies and any other confidential information, which measures are reasonable in the industry in which the Acquired Companies operate. There are no orders or settlement agreements to which any of the Acquired Companies is a party or by which any Acquired Company is bound that restricts any of the Acquired Companies’ rights to use any

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Owned Intangibles or Licensed Intangibles used by the Acquired Companies in the operation of the Business as currently conducted.

5.10.             Contracts, etc . Set forth on Schedule 5.10 hereto is a true and complete list of all of the following Contractual Obligations of the Acquired Companies (collectively, the “ Contracts ”):

5.10.1.             all Contractual Obligations involving collective bargaining agreements and other labor agreements, all employment or consulting agreements, and all other plans, agreements, arrangements, practices or other Contractual Obligations (other than any Employee Plan) which constitute Compensation or benefits, including post retirement benefits, to any of the officers or employees or former officers or employees of the Acquired Companies, except, in each case, for obligations arising generally in connection with employment-at-will employment relationships;

5.10.2.             all Contractual Obligations under which the Acquired Companies are or may become obligated to pay any brokerage, finder’s or similar fees in connection with, or has incurred any severance pay or special Compensation obligations which would become payable by reason of, this Agreement or consummation of the transactions contemplated hereby;

5.10.3.             all Contractual Obligations to sell or otherwise dispose of any assets other than in the Ordinary Course of Business;

5.10.4.             all Contractual Obligations under which the Acquired Companies will have after the Closing any liability or obligation to any Seller or any Affiliate of any Seller;

5.10.5.             all Contractual Obligations (other than Leases) under which the Acquired Companies have any liability or obligation for any Debt, or which constitute a Guarantee of any liability or obligation of any Person having a value of at least $25,000 in any year or $250,000 in the aggregate;

5.10.6.             all Contractual Obligations under which the Acquired Companies are or may become obligated to pay any amount in respect of deferred or conditional purchase price (other than ordinary trade terms), indemnification obligations, purchase price adjustment or otherwise in connection with any (i) acquisition or disposition of all or substantially all of the assets or securities constituting a line of business of any Person, (ii) merger, consolidation or other business combination, or (iii) series or group of related transactions or events of a type specified in subclauses (i) and (ii);

5.10.7.             all Contractual Obligations for the sale or purchase of finished products or raw materials or the provision of services by or to the Acquired Companies (other than ordinary course purchase orders or sales orders) (i) that involve finished products, raw materials or services having a value of at least $25,000 in any year or $250,000 in the aggregate, (ii) have a term extending more than one year after the Closing Date, or (iii) to which a Governmental Authority is a party;

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5.10.8.             all Contractual Obligations having a value of at least $25,000 in any year or $250,000 in the aggregate under which any tangible personal property is held or used by the Acquired Companies;

5.10.9.             all Contractual Obligations having a value of at least $25,000 in any year or $250,000 in the aggregate under which the Acquired Companies are liable as lessor with respect to any tangible personal property;

5.10.10.       all Contractual Obligations under which the Acquired Companies are prohibited or restricted from competing (i) in any business, (ii) in any geographic area and/or (iii) for any current or potential customers anywhere in the world; and

5.10.11.       all Contractual Obligations under which the Acquired Companies have granted an exclusive territory or business relationship.

The Acquired Companies have heretofore made available to the Buyer a true and complete copy of each of the Contracts. Each Contract is Enforceable by the Acquired Companies. No breach or default by the Acquired Companies under any Contract has occurred and is continuing, and no event has occurred which with notice or lapse of time would constitute such a breach or default, other than such breaches and defaults as have not had and would not reasonably be expected to have a Material Adverse Effect. To the Knowledge of the Acquired Companies, except as set forth on Schedule 5.10 hereto, no breach or default by any other Person under any Contract has occurred and is continuing, and no event has occurred which with notice or lapse of time would constitute such a breach or default, other than breaches and defaults which have not had and would not reasonably be expected to have a Material Adverse Effect.

5.11.             Change in Condition . From and after the Balance Sheet Date to and including the date hereof, the Acquired Companies have conducted the Business only in the Ordinary Course of Business and, except as set forth on Schedule 5.11 , have maintained their relationships with customers, distributors, suppliers, vendors, employees, agents and others. Without limiting the generality of the foregoing, except as set forth on Schedule 5.11 , since the Balance Sheet Date no Acquired Company has:

5.11.1.             (i) entered into any transaction otherwise than on an arms’ length basis and in the Ordinary Course of Business or (ii) entered into any transaction with or made any Distributions or any other payments or transfers of assets to any shareholder or Affiliate of the Acquired Companies other than Compensation paid in the Ordinary Course of Business;

5.11.2.             incurred or otherwise become liable in respect of any Debt (other than Bank Debt), except for borrowings and deferred purchase payments in the Ordinary Course of Business that do not exceed $250,000 in the aggregate;

5.11.3.             created or suffered the imposition of any Lien upon any assets, whether tangible or intangible, of the Acquired Companies;

5.11.4.             (i) sold, leased to others or otherwise disposed of any of its assets other than in the Ordinary Course of Business, (ii) entered into any Contractual Obligation relating to

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(A) the purchase of any Capital Stock of or interest in any Person, (B) the purchase of assets constituting a business or (C) any merger, consolidation or other business combination, (iii) canceled or compromised any Debt or claim (other than compromises of accounts receivable in the Ordinary Course of Business), (iv) waived or released any right of material value or (v) instituted, settled or agreed to settle any material Action;

5.11.5.             (i) made any changes in the Compensation of any director, officer, employee, or consultant to, or agent of the Acquired Companies, except for changes in the Ordinary Course of Business, or (ii) paid or agreed to pay any Compensation in connection with the transactions contemplated hereby;

5.11.6.             suffered any material damage, destruction or loss (whether or not covered by insurance) to any of its assets, whether tangible or intangible;

5.11.7.             made any change in its customary methods of accounting or accounting practices, or payment or credit practices, or granted any extensions of credit other than in the Ordinary Course of Business;

5.11.8.             made any change in the Acquired Companies’ cash management, including with respect to payment of Debt, collection of receivables, payment of payables or main