Stock Purchase, Redemption and Contribution Agreement

Exhibit 10.1

Stock Purchase, Redemption and Contribution Agreement

by and among

Compass Group Diversified Holdings LLC, Norwest Mezzanine Partners I, LP
and the other shareholders party hereto
(collectively, the “Sellers”);

Compass Group Diversified Holdings LLC
(the “Sellers’ Representative”);

Crosman Acquisition Corporation
(“CAC”);

and

Crosman Group LLC
(the “Buyer”)

Dated as of January 5, 2007

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STOCK PURCHASE, REDEMPTION AND CONTRIBUTION AGREEMENT

     This Stock Purchase, Redemption and Contribution Agreement (this “ Agreement ”) is made as of January 5, 2007 by and among COMPASS GROUP DIVERSIFIED HOLDINGS LLC , a Delaware limited liability company (“ CODI ”), NORWEST MEZZANINE PARTNERS I, LP , a Minnesota limited partnership (“ Norwest ”), KENNETH R. D’ARCY (“ D’Arcy ”), ROBERT BECKWITH (“ Beckwith ”), STEVE UPHAM (“ Upham ”), DAN SCHULTZ (“ Schultz ”), ROBERT HAMPTON (“ Hampton ”) (CODI, Norwest, D’Arcy, Beckwith, Upham, Schultz, Hampton and the other individual shareholders party hereto, collectively referred to herein as the “ Sellers ”), CROSMAN ACQUISITION CORPORATION , a Delaware corporation (“ CAC ”), COMPASS GROUP DIVERSIFIED HOLDINGS LLC , as representative of the Sellers (in such capacity, the “ Sellers’ Representative ”), and CROSMAN GROUP LLC , a Delaware limited liability company (the “ Buyer ”).

RECITALS

     A. This Agreement provides for (a) the contribution of the Rollover Shares by the Rollover Shareholders to Buyer in exchange for $2,316,500 ( the “ Rollover Amount ”) worth of equity interests of Buyer in a transaction intended to qualify as a tax-free contribution pursuant to IRC §721, (b) the contribution of up to $35,683,500 to Buyer (the “ Equity Financing ”) by Wachovia Capital Partners 2006, LLC (“ WCP ”) and certain other Persons in exchange for equity interests of Buyer, (c) the acquisition by Buyer of the Purchased Shares with the proceeds of the Equity Financing, and (d) the redemption by CAC of the Redeemed Shares with a portion of proceeds of Debt Financing Proceeds.

     B. The Rollover Shares, Purchased Shares and Redeemed Shares constitute all of the issued and outstanding shares of capital stock (the “ Shares ”) of CAC.

     C. CAC is the sole shareholder of Crosman Corporation, a Delaware corporation (the “ Company ”).

AGREEMENT

     The parties, intending to be legally bound, agree as follows:

1. Definitions

     For purposes of this Agreement, the following terms have the meanings specified or referred to in this Section 1:

      “Accounts Receivable” shall have the meaning set forth in Section 3.8.

      “Adjusted Current Assets” means the aggregate amount of the current consolidated assets of the Companies shown on the Working Capital Closing Statement

as such current assets are calculated as of the close of business on the business day immediately preceding the Closing Date in accordance with the Working Capital Methodology, but including Cash and excluding, to the extent included in such current consolidated assets, (a) any deferred or current income tax assets, (b) any 2007 Tax Refund amount, (c) any interest accrued on or principal of the Promissory Notes, (d) any pre-paid fees or expenses in connection with the Management Services Agreement, and (e) any sums due to any of the Companies from any of the other Companies that appear as “current assets” on the Working Capital Closing Statement. For purposes of determining the Adjusted Current Assets, the assets of Diablo shall be excluded for all purposes, including any asset reflected on the books and records of any of the other Companies related to an investment in Diablo; provided, that, the Diablo Receivable shall be included in the Adjusted Current Assets. For this purpose the “Diablo Receivable” shall mean the amount payable as of the close of business on the business day immediately preceding the Closing Date by Diablo to the Company pursuant to the Diablo Membership Agreement with respect to the 5% commission payable to the Company for the provision of management and administrative services to Diablo.

      “Adjusted Current Liabilities” means the aggregate amount of the current consolidated liabilities of the Companies shown on the Working Capital Closing Statement as such current liabilities are calculated as of the close of business on the business day immediately preceding the Closing Date in accordance with the Working Capital Methodology, but excluding, to the extent included in such current consolidated liabilities, (a) any Indebtedness of the Companies, (b) any sums owed by any of the Companies to any of the other Companies that appear as “current liabilities” on the Working Capital Closing Statement, (c) any deferred or current income tax liabilities, (d) any 2007 Tax Obligation amount, (e) any of the Company Transaction Expenses and (f) any D’Arcy Interest Bonus. For purposes of determining the Adjusted Current Liabilities, the Liabilities of Diablo shall be excluded for all purposes. For the avoidance of doubt, the Adjusted Current Liabilities shall include, to the extent accrued in accordance with the Working Capital Methodology but not paid as of the Closing, (i) the 2007 Year End Bonuses and (ii) all employer paid payroll Taxes due or payable with respect to compensation payable on or prior to the Closing Date, including with respect to the D’Arcy Interest Bonus.

     “ Adjusted Equity Value ” means $140,000,000 increased or decreased, as the case may be, by the Adjustment Amount.

      “Adjusted Net Working Capital” means the amount (which amount may be positive or negative) equal to Adjusted Current Assets less Adjusted Current Liabilities.

      “Adjustment Amount” means the amount (which amount may be positive or negative) equal to the Adjusted Net Working Capital less the Reference Net Working Capital.

      “Amended and Restated LLC Agreement” shall have the meaning set forth in Section 2.4(b).

      “Applicable Contract” means any Contract (a) under which any of the Companies has or may acquire any rights, (b) under which any of the Companies has or may become subject to any obligation or liability, or (c) by which any of the Companies or any of the assets owned or used by any of them is or may become bound.

      “ Assumed Debt ” means the Indebtedness associated with the Capitalized Leases as of the Closing Date.

      “Balance Sheet” - as defined in Section 3.4.

      “Breach” means a “Breach” of a representation, warranty, covenant, obligation or other provision of this Agreement or any instrument delivered pursuant to this Agreement will be deemed to have occurred if there is or has been any inaccuracy in or breach of, or any failure to perform or comply with, such representation, warranty, covenant, obligation or other provision, and the term “Breach” means any such inaccuracy, breach, failure, claim, occurrence or circumstance.

      “Buyer” - as defined in the first paragraph of this Agreement.

      “Buyer Indemnified Persons” - as defined in Section 10.2.

      “Buyer’s Transaction Expenses” means all costs and expenses incurred by or on behalf of Buyer and its affiliates in connection with the preparation, execution and performance of this Agreement and the other Transaction Documents and the transactions contemplated hereby and thereby, including, without limitation, all fees and out of pocket expenses of such entities’ Representatives, and the fees and expenses due in connection with any debt or equity financing arranged by or for the benefit of Buyer.

      “CAC” - as defined in the first paragraph of this Agreement.

     “ CAC Options ” means the options to purchase 30,000 shares of Common Stock pursuant to that certain Stock Option Agreement dated February 10, 2004 by and between CAC and D’Arcy.

      “Capitalized Leases” means the capitalized leases of the Companies set forth on Schedule 1.1 .

      “Cash” means the cash and cash equivalents of the Companies as of the close of business on the business day immediately preceding the Closing Date as shown on the Working Capital Closing Statement calculated in accordance with GAAP. For the avoidance of doubt, Cash shall (i) be reduced by checks and drafts written by the Companies but not yet cleared, (ii) exclude any Cash of Diablo and (iii) exclude the Debt Financing Proceeds.

     “ Change of Control Payments ” means all change in control, stay-pay, bonus or other similar payments to any current or former employees, officers, directors or

managers of CAC or any of its Subsidiaries arising as a result of the transactions contemplated by this Agreement, (i) including, without limitation, any of the foregoing obligations of CAC or any of its Subsidiaries arising under any employment agreement or otherwise and (ii) excluding the D’Arcy Interest Bonus.

      “Claim” shall have the meaning set forth in Section 12.14.

      “Closing” - as defined in Section 2.4.

      “Closing Date” means the date on which the Closing actually takes place.

      “Closing Statement” has the meaning set forth in Section 2.3(h).

      “ CODI ” – as defined in the first paragraph to this Agreement.

      “Common Stock” means the common stock, par value of $0.01 per share, of CAC.

      “Companies” means CAC, the Company and the Company’s Subsidiaries, collectively.

      “Company” - as defined in the Recitals of this Agreement.

      “Company Transaction Expenses” means all costs and expenses incurred on or prior to the Closing by any of the Companies on behalf of the Companies or the Sellers in connection with the preparation, execution and performance of this Agreement and the other Transaction Documents and the Contemplated Transactions, including, without limitation, (i) the Harris Williams Fee Amount, (ii) all fees and out of pocket expenses of any of the Companies and their respective Representatives and (iii) the fees and expenses (in an amount not in excess of $16,000) of Stradling Yocca Carlson & Rauth, but specifically excluding Buyer’s Transaction Expenses.

      “Confidentiality Agreement” means that certain Confidentiality Agreement, dated as of August 11, 2006, between CODI and the Buyer, as the same may be amended, supplemented or otherwise modified from time to time.

      “Consent” means any approval, consent, ratification, license, permit, waiver or other authorization (including any Governmental Authorization).

      “Contemplated Transactions” means all of the transactions contemplated by this Agreement, including:

          (a) the contribution of the Rollover Shares to Buyer;

          (b) the purchase of the Purchased Shares by Buyer;

          (c) the redemption of the Redeemed Shares by CAC; and

          (d) the performance by Buyer, CAC and the Sellers of their respective covenants and obligations under this Agreement.

      “Contingent Securities” shall have the meaning set forth in Section 3.3.

      “Contract” means any agreement, contract, employment agreement, indenture, note, bond, loan, instrument, lease, conditional sales contract, mortgage, license, franchise agreement, commitment, obligation, promise, or undertaking, whether written or oral, that is legally binding, including all amendments thereto.

      “Credit Agreements” means (i) that certain Credit Agreement, dated as of the Closing Date, by and between the Company, as borrower, and Manufacturers and Traders Trust Company, as lender and (ii) that certain            Note Purchase Agreement by and among the Companies (other than Diablo), Blackstone Mezzanine Partners II L.P. and Blackstone Mezzanine Holdings II L.P.

      “Damages” - as defined in Section 10.2.

     “ D’Arcy Interest Bonus” shall mean the amount payable to D’Arcy pursuant to the last sentence of Section 2.02 of the Employment and Non-Competition Agreement by and between D’Arcy and the Company, which amount is $102,515.36 on the Closing Date.

      “Debt Financing Proceeds” means funds received by the Companies in connection with the closing of the transactions contemplated by the Credit Agreements.

      “Debt Payoff Amount” means the amount necessary to fully discharge the Debt to be Repaid on the Closing Date.

      “Debt to be Repaid” means all Indebtedness of the Companies (including any pre-payment or repayment fees, penalties and expenses) outstanding immediately prior to the Closing of the Companies including, without limitation, under (i) that certain Credit Agreement, dated as of May 16, 2006, by and between the Company, and CODI, as lender (as amended through the Closing Date), (ii) that certain Line of Credit Agreement dated as of June 7, 2006, by and between the Company and Manufacturers and Traders Trust Company, as lender (as amended through the Closing Date) (the “ Line of Credit ”) and (iii) any other Contract but specifically excluding any Assumed Debt.

      “Diablo” means Diablo Marketing LLC, a Delaware limited liability company

     “ Diablo Loan Agreements ” means (i) that certain Credit Facility Agreement between Diablo and Manufacturers and Traders Trust Company dated April 9, 2002 (as amended through November 17, 2003) and (ii) those certain Unlimited Guaranty and Indemnity Agreements dated as of April 9, 2002 by and between each of CAC and the Company and Manufacturers and Traders Trust Company as reaffirmed in those certain

Reaffirmations of Guaranty with Limitation dated November 17, 2003 by each of CAC and the Company in favor of Manufacturers and Traders Trust Company.

      “Disclosure Letter” means the disclosure letter delivered by Sellers to Buyer concurrently with the execution and delivery of this Agreement.

      “Employee Benefit Plan” – as defined in Section 3.11(a).

      “Encumbrance” means any charge, claim, community property interest, condition, equitable interest, lien, option, pledge, security interest, right of first refusal lease, license, easement, restrictive covenant, encumbrance, sublease or restriction of any kind, including any restriction on use, voting, transfer, receipt of income or exercise of any other attribute of ownership.

      “Environment” means soil, land surface or subsurface strata, surface waters (including navigable waters, ocean waters, streams, ponds, drainage basins and wetlands), groundwaters, drinking water supply, stream sediments, ambient air (including indoor air), plant and animal life and any other environmental medium or natural resource.

      “Environmental, Health and Safety Liabilities” means any obligations or Liabilities (including any claims, suits or other assertions of obligations or liabilities) that are:

     (a) related to environmental, health or safety issues (including on-site or off-site contamination by Hazardous Materials of surface or subsurface soil or water); and

     (b) based upon or related to (i) any Environmental Law or (ii) any Order imposed by any Governmental Body with respect to any Environmental Law.

      “Environmental Law” means any Legal Requirement that addresses, is related to or is otherwise concerned with environmental, health or safety issues, including any Legal Requirement relating to any emissions, releases or discharges of Hazardous Materials into the Environment, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport, handling, clean-up or control of Hazardous Materials.

      “Equity Financing” – as defined in the Recitals to this Agreement.

      “Equity Value” means an amount equal to $140,000,000, as further increased or decreased on a dollar-for-dollar basis for the cumulative net adjustments required by the following:

     (1) The amount shall be decreased by the Debt Payoff Amount;

     (2) The amount shall be decreased by the amount of the Assumed Debt as of the Closing Date;

     (3) The amount shall be increased by the amount, if any, of the Promissory Notes (including all accrued interest) to the extent remaining unpaid on the Closing Date;

     (4) The amount shall be increased or decreased, as the case may be, by the amount that is equal to the Estimated Adjustment Amount (increased where such amount is positive and decreased where such amount is negative);

     (5) The amount shall be increased by the amount, if any, of the 2007 Estimated Tax Refund;

     (7) The amount shall be decreased by the amount, if any, of the 2007 Estimated Tax Obligation;

     (8) The amount shall be decreased by the amount of the D’Arcy Interest Bonus;

     (9) The amount shall be deceased by the Option Termination Payment; and

     (10) The amount shall be decreased by the Company Transaction Expenses to the extent remaining unpaid at the Closing.

      “ERISA” means the Employee Retirement Income Security Act of 1974 or any successor law, and regulations and rules issued pursuant to that Act or any successor law, as may be amended from time to time.

      “ERISA Affiliate” — as defined in Section 3.11(d).

      “Estimated Adjustment Amount” – as defined in Section 2.3(b).

      “Estimated Working Capital Closing Statement” – as defined in Section 2.3(b).

      “Facilities” means any real property, leaseholds or other interests currently or formerly owned or operated by the Companies and any buildings, plants, structures or equipment (including motor vehicles, tank cars and rolling stock) currently or formerly owned or operated by the Companies.

      “Federal Tax Audit Amount” means $128,000, an estimate of the amount due to the IRS in respect of the federal Tax audit for the year ended June 30, 2004.

      “Financial Statements” – as defined in Section 3.4.

      “GAAP” means generally accepted United States accounting principles.

      “Governmental Authorization” means any Consent issued, granted, given or otherwise made available by or under the authority of any Governmental Body or pursuant to any Legal Requirement.

      “Governmental Body” means any:

     (a) nation, state, county, city, town, village, district or other jurisdiction of any nature;

     (b) federal, state, local, municipal, foreign or other government;

     (c) governmental or quasi-governmental authority of any nature (including any governmental agency, branch, department, official or entity and any court or other tribunal);

     (d) multi-national organization or body; or

     (e) body exercising, or entitled to exercise, any administrative, executive, judicial, legislative, police, regulatory or taxing authority or power of any nature.

      “Harris Williams Fee Amount” means the amount of the fees, expenses and other payments due and owing, or that may become due and owing, to Harris Williams LLC d/b/a Harris Williams & Co. pursuant to the engagement letter dated June 15, 2006 between CAC and Harris Williams & Co. or otherwise arising out of or in connection with the Contemplated Transactions.

      “Hazardous Activity” means the distribution, generation , handling, importing, management, manufacturing, processing, production, refinement, Release, storage, transfer, transportation, treatment or use (including any withdrawal or other use of groundwater) of Hazardous Materials in, on, under, about or from the Facilities or any part thereof into the Environment.

      “Hazardous Materials” means, without limitation, any combustible substances, ignitable substances, flammable substances, corrosive substances, reactive substances, explosives, radon, radioactive materials, asbestos, urea formaldehyde foam insulation, polychlorinated biphenyls, petroleum and petroleum based products, methane, and hazardous materials, hazardous chemicals, hazardous wastes, pollutants, hazardous or toxic substances, as defined in or regulated under the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended (42 U.S.C. Sections 9601, et. seq.), the Resource Conservation and Recover Act, as amended (42 U.S.C. Section 6901, et. seq.), the Toxic Substances Control Act, as amended (15 U.S.C. Sections 2601, et. seq.), the Federal Water Pollution Control Act, as amended (33 U.S. C. Sections 1251, 1321(b)(2)(A) and 1362(6)), or any other applicable Environmental Law, including any mixture or solution thereof, and specifically including petroleum and all derivatives thereof or synthetic substitutes therefor and asbestos or asbestos-containing materials.

      “HIPAA” means the Health Insurance Portability and Accountability Act of 1996.

      “Holdback Amount” means $50,000, together with all interest accrued thereon.

      “Holdback Percentages” means, with respect to each Seller (other than CODI and Norwest), the percentage set forth opposite such Seller’s name on Schedule 12.14 .

      “Indebtedness ” means, with respect to the Companies, (i) any indebtedness for borrowed money, whether short term or long term, (ii) any indebtedness arising under Capitalized Leases, conditional sales contracts and other similar title retention instruments, (iii) all Liabilities secured by any Encumbrance on any property owned by the Companies; (iv) all Liabilities under any interest rate protection agreement, interest rate future agreement, interest rate option agreement, interest rate swap agreement or other similar agreement designed to protect the Companies against fluctuations in interest rates, (v) all indebtedness for the deferred purchase price of property, or the deferred purchase price for services, (vi) all interest, fees, charges, prepayment premiums and penalties, and other expenses owed with respect to Indebtedness described in the foregoing clauses (i) through (v), and (vii) all Indebtedness referred to in the foregoing clauses (i) through (vi) which is directly or indirectly guaranteed by any of the Companies in any manner, including but not limited to, an agreement, contingent or otherwise, to supply funds to, or in any other manner invest in, the debtor, or to purchase Indebtedness, or to purchase and pay for property if not delivered or pay for services if not performed, primarily or exclusively, for the purpose of enabling the debtor to make payment of the Indebtedness or to insure the owners of the Indebtedness against loss. Notwithstanding the foregoing, (i) any obligations of the Companies under the Diablo Loan Agreements and (ii) any obligations of the Companies with respect to the letter of credit in the amount of $195,000 currently outstanding under the Line of Credit shall, in each case, not be considered Indebtedness for purposes of this Agreement.

      “Indemnification Basket” – as defined in Section 10.5(a).

      “Indemnification Cap” – as defined in Section 10.5(a).

      “Intellectual Property Assets” - as defined in Section 3.19(a).

      “Intellectual Property Rights” mean (a) all copyright rights under the copyright laws of the United States and all other countries for the full term thereof (and including all rights accruing by virtue of bilateral or international copyright treaties and conventions), including, but not limited to, all renewals, extensions, reversions or restorations of copyrights now or hereafter provided for by law and all rights to make applications for copyright registrations and recordations, regardless of the medium of fixation or means of expression; (b) all rights to and under all new and useful inventions, discoveries, designs, technology and art, including, but not limited to, all improvements thereof and all know-how related thereto, including all letters patent and patent applications in the United States and all other countries (and all letters patent that issue therefrom) and all reissues, reexaminations, extensions, renewals, divisions and continuations (including continuations-in-part and continuing prosecution applications) thereof, for the full term thereof; (c) all trademark and service mark applications and

registrations to issue therefrom under all trademark laws of the United States and all other countries for the full term thereof; (d) Internet domain names and applications therefore and URLs; (e) electronic or other databases, to the extent protected by intellectual property or other law in any jurisdiction; (f) all trade secrets; (g) all confidential information; (h) all know-how; and (i) all worldwide intellectual property rights, industrial property rights and proprietary rights not otherwise included in the foregoing, including, without limitation, all trade dress, algorithms, concepts, processes, methods and protocols.

      “Interim Balance Sheet” - as defined in Section 3.4.

      “IRC” means the Internal Revenue Code of 1986, as amended, or any successor law, and regulations issued by the IRS pursuant to the Internal Revenue Code or any successor law.

      “IRS” means the United States Internal Revenue Service or any successor agency and, to the extent relevant, the United States Department of the Treasury.

      “Knowledge” means regarding any matter in question (i) with respect to the Companies (or any of them), if any of D’Arcy, Upham, Beckwith or Schultz has actual knowledge of the matter in question after reasonable investigation and (ii) with respect to any other Person, if such Person has actual knowledge of the matter in question after reasonable investigation.

      “Labor Laws” shall have the meaning set forth in Section 3.18(d).

      “Legal Requirement” means any federal, state, local, municipal, foreign, international, multinational or other administrative order, constitution, law, ordinance, principle of common law, regulation, statute or treaty.

     “ Liability ” means all liabilities and obligations (whether known or unknown, whether asserted or unasserted, whether absolute or contingent, whether accrued or unaccrued, whether liquidated or unliquidated, and whether due or to become due).

     “ Management Services Agreement ” means that certain Management Services Agreement dated as of February 10, 2004 by and between the Company and Kilgore Consulting III LLC (as assigned to Compass Group Management LLC), as amended.

      “Material Adverse Effect” means any change or effect that, when taken individually or together with all other adverse changes or effects has or will have a material adverse effect on the assets, properties, business, results of operations or financial condition of the Companies, taken as a whole.

     “ Midwest Walnut Claim ” means the matter set forth as item 2 of Part 3.13(a) of the Disclosure Letter and any cause of action, suit, demand or claim (whether at law or equity), Proceeding, filed or to be filed in connection with such matter, and any Proceeding resulting from a remand, reversal or appeal related to such matter.

      “Minimum Funding Plan” – as defined in Section 3.11(a).

      “Multiemployer Plan” – as defined in Section 3.11(d).

      “Norwest” - as defined in the first paragraph of this Agreement.

      “Option Termination Payment” – as defined in Section 2.3(f).

      “Order” means any award, decision, injunction, judgment, order, ruling, subpoena or verdict entered, issued, made or rendered by any court, administrative agency or other Governmental Body or by any arbitrator.

      “Ordinary Course of Business” - an action taken by a Person will be deemed to have been taken in the “Ordinary Course of Business” only if:

     (a) such action is consistent with the past practices of such Person and is taken in the ordinary course of such Person’s normal operations and practices; and

     (b) such action is not required to be authorized by the board of directors of such Person (or by any Person or group of Persons exercising similar authority) and is not required to be specifically authorized by the parent company (if any) of such Person.

      “Organizational Documents” means, with respect to any corporation, its articles or certificate of incorporation and its bylaws and, with respect to any other Person, its charter or similar document adopted or filed in connection with its creation, formation or organization, in each case including any amendments thereto and as currently in effect.

      “Owned Real Property” shall have the meaning set forth in Section 3.6.

      “Pension Plan” has the meaning given in ERISA § 3(2)(A).

      “Permitted Encumbrances” means (i) liens securing current Taxes, assessments, fees or other governmental charges or levies not yet delinquent; (ii) minor imperfections of title, easements, encroachments, covenants, rights of way, minor defects, irregularities or Encumbrances that do not and would not, individually or in the aggregate, reasonably be expected to impair in any material respect the operations of the business of the Companies, taken as a whole; (iii) inchoate mechanics and materialmen’s liens for construction in progress; (iv) liens of warehousemen and carriers arising in the Ordinary Course of Business; (v) liens incurred or deposits made in the Ordinary Course of Business in connection with workers’ compensation, unemployment insurance, social security and other similar laws which are not material, individually or in the aggregate; (vi) Encumbrances securing equipment leases arising in the Ordinary Course of Business; and (vii) such other Encumbrances, if any, identified in that certain title insurance policy issued by Fidelity National Title Insurance Company on or about the Closing Date with commitment number 5506-25202.

      “Per Share Equity Value” means the quotient obtained by dividing (x) the Equity Value by (y) 577,232 (i.e. the number of Shares outstanding and expressly excluding the aggregate number of shares of Common Stock into which the CAC Options are exercisable, in each case, immediately prior to the Closing).

      “Person” means any individual, corporation (including any non-profit corporation), general or limited partnership, limited liability company, joint venture, estate, trust, association, organization, labor union or other entity or Governmental Body.

      “Personal Property” – as defined in Section 3.6(b).

      “Privacy Rules” means the privacy rules set forth in 45 Code of Federal Regulations Parts 160 and 164, as promulgated under the HIPAA.

      “Product Liability Claims” shall have the meaning set forth in Section 3.24(a).

      “Pro Rata Percentage” means, with respect to each Seller, the percentage expressed by the quotient obtained by dividing (x) the total number of Shares owned by such Seller immediately prior to the Closing by (y) 577,232 (i.e. the number of Shares outstanding immediately prior to the Closing). The Pro Rata Percentage of each Seller is set forth on Schedule 1.2 .

      “Proceeding” means any action, arbitration, audit, hearing, investigation, litigation or suit (whether civil, criminal, administrative, investigative or informal) commenced, brought, conducted or heard by or before, or otherwise involving, any Governmental Body or arbitrator.

      “Promissory Notes” means (i) that certain Promissory Note dated April 23, 2004 by Beckwith for the benefit of CAC in the principal amount of $149,987.34, (ii) that certain Amended and Restated Promissory Note dated February 10, 2004 by D’Arcy for the benefit of CAC in the principal amount of $504,763.82, (iii) that certain Promissory Note dated April 23, 2004 by Schultz for the benefit of CAC in the principal amount of $149,987.34, (iv) that certain Promissory Note dated April 23, 2004 by Upham for the benefit of CAC in the principal amount of $149,987.34, and (v) that certain Promissory Note dated November 22, 2005 by Hampton for the benefit of CAC in the principal amount of $150,000.

      “Proprietary Rights Agreement” – as defined in Section 3.18(b).

      “Purchased Shares” means, with respect to the Shares owned by CODI as set forth in Part 3.3 of the Disclosure Letter, the quotient obtained by dividing the amount of the Equity Financing by the Per Share Equity Value as determined on the Closing Date.

      “Qualified” means any representation, warranty, obligation, covenant or other agreement, as applicable, which is subject to a “materiality”, “material”, “Material Adverse Effect”, “in all material respects”, “significant” or similar qualification.

      “Qualified Plan” – as defined in Section 3.11(d).

      “Real Property Laws” shall have the meaning set forth in Section 3.6.

      “Redeemed Shares” means (i) with respect to CODI, that number of Shares owned by CODI as set forth in Part 3.3 of the Disclosure Letter less the number of Purchased Shares of CODI, (ii) with respect to a Rollover Shareholder, that number of Shares owned by such Rollover Shareholder as set forth in Part 3.3 of the Disclosure Letter less the number of Rollover Shares of such Rollover Shareholder and (iii) with respect to any Seller other than CODI and the Rollover Shareholders, that number of Shares owned by such Seller as set forth in Part 3.3 of the Disclosure Letter.

      “Reference Net Working Capital” means $27,500,000, which amount has been calculated in accordance with the Working Capital Methodology. A detailed calculation of the Reference Net Working Capital is included with the Working Capital Methodology on Schedule 1.3 .

      “Related Person” means with respect to a particular individual:

     (a) each other member of such individual’s Family;

     (b) any Person that is directly or indirectly controlled by such individual or one or more members of such individual’s Family;

     (c) any Person in which such individual or members of such individual’s Family hold (individually or in the aggregate) a Material Interest; and

     (d) any Person with respect to which such individual or one or more members of such individual’s Family serves as a director, officer, partner, executor or trustee (or in a similar capacity).

     With respect to a specified Person other than an individual:

     (a) any Person that directly or indirectly controls, or is directly or indirectly controlled by, such specified Person;

     (b) any Person that holds a Material Interest in such specified Person;

     (c) each Person that serves as a director, officer, partner, executor or trustee of such specified Person (or in a similar capacity);

     (d) any Person in which such specified Person holds a Material Interest;

     (e) any Person with respect to which such specified Person serves as a general partner or a trustee (or in a similar capacity); and

     (f) any Related Person of an individual described in clause (b) or (c).

     For purposes of this definition, (a) the “Family” of an individual includes (i) the individual, (ii) the individual’s spouse, (iii) a parent, child, sibling, nephew or niece of the individual or the individual’s spouse, and (iv) any other natural person who resides with such individual and (b) “Material Interest” means direct or indirect beneficial ownership (as defined in Rule 13d-3 under the Securities Exchange Act of 1934) of voting securities or other voting interests representing at least 20% of the outstanding voting power of a Person or equity securities or other equity interests representing at least 20% of the outstanding equity securities or equity interests in a Person.

      “Release” means any spilling , leaking, emitting, discharging, depositing, escaping, leaching, dumping or other releasing into the Environment, whether intentional or unintentional.

      “Releasee” or “Releasees” shall have the meaning set forth in Section 2.6.

      “Released Claims” shall have the meaning set forth in Section 2.6.

      “Relevant Period” – as defined in Section 3.11(a).

      “Representative” means, with respect to a particular Person, any director, officer, employee, agent, consultant, advisor or other representative of such Person, including legal counsel, accountants and financial advisors.

      “Rollover Amount” – as defined in the Recitals of this Agreement.

      “Rollover Shareholders” means D’Arcy, Beckwith, Upham, Schultz, Hampton, Ed Schultz, Danny Gainor, John Mooney, A. Wesley Bailey, Roy Stefanko, Athena Jamesson, Kathryn Chapman and John Goff.

      “Rollover Shares” means, with respect to Shares owned by each Rollover Shareholder as set forth on Part 3.3 of the Disclosure Letter, the quotient obtained by dividing (x) the amount set forth opposite such individual’s name on Schedule 2.1 by (y) the Per Share Equity Value as determined on the Closing Date.

      “Securities Act” means the Securities Act of 1933, as amended, or any successor law, and regulations and rules issued pursuant to that Act or any successor law.

      “Selected Accounting Firm” - as defined in Section 2.5(d).

      “Sellers” - as defined in the first paragraph of this Agreement.

      “Sellers’ Representative” - as defined in the first paragraph of this Agreement.

      “Shares” - as defined in the Recitals of this Agreement.

      “Subsidiary” means, with respect to any Person (the “Owner”), any corporation or other Person of which securities or other interests having the power to elect a majority of that corporation’s or other Person’s board of directors or similar governing body, or otherwise having the power to direct the business and policies of that corporation or other Person (other than securities or other interests having such power only upon the happening of a contingency that has not occurred) are held by the Owner or one or more of its Subsidiaries. Notwithstanding the foregoing, when used without reference to a particular Person, “Subsidiary” means a Subsidiary of CAC and, for purposes of this Agreement, the Subsidiaries of CAC shall include the Company, Crosman Pellets, LLC, a Delaware limited liability company, Crosman Manufacturing, LLC, a Delaware limited liability company, and Diablo.

      “Tax” or “Taxes” (and with correlative meaning, “Taxable” and “Taxing” ) means (i) any federal, state, provincial, local, foreign or other income, alternative, minimum, add-on minimum, accumulated earnings, personal holding company, franchise, capital stock, net worth, capital, profits, intangibles, windfall profits, gross receipts, value added, sales, use, goods and services, excise, customs duties, transfer, conveyance, mortgage, registration, stamp, documentary, recording, premium, severance, environmental (including taxes under Section 59A of the IRC), natural resources, real property, personal property, ad valorem, intangibles, rent, occupancy, license, occupational, employment, unemployment insurance, social security, disability, workers’ compensation, payroll, health care, withholding, estimated or other similar taxes, duty, levy or assessment or deficiencies thereof (including all interest and penalties thereon and additions thereto, whether disputed or not) and (ii) any transferee Liability in respect of any items described in clause (i) above.

      “Tax Return” means any return (including any information return), report, statement, schedule, notice, form or other document or information filed with or submitted to, or required to be filed with or submitted to, any Governmental Body in connection with the determination, assessment, collection or payment of any Tax or in connection with the administration, implementation or enforcement of or compliance with any Legal Requirement relating to any Tax.

      “Threat of Release” means a substantial likelihood of a Release that may require action in order to prevent or mitigate damage to the Environment that may result from such Release.

      “Threatened” - a claim, Proceeding, dispute, action or other matter will be deemed to have been “Threatened” if any demand or statement has been made orally or

in writing or any notice has been given orally or in writing, or if any other event has occurred or any other circumstances exist, that would lead a prudent Person to conclude that (i) such a claim, Proceeding, dispute, action or other matter is likely to be asserted, commenced, taken or otherwise pursued in the future, or (ii) if such a claim, Proceeding, dispute, action or other matter were asserted, commenced, taken or otherwise pursued, it could reasonably be expected to result in a Material Adverse Effect on the Companies.

      “Threshold” shall have the meaning set forth in Section 10.5(b).

      “Title IV Plans” – as defined in Section 3.11(d).

      “Transaction Documents” means this Agreement, Amendment No. 1 to the Employment and Non-Competition Agreement by and between D’Arcy and the Company, the Amended and Restated LLC Agreement, the Indemnification Agreements among CAC, the Company and each of Arthur C. Roselle and Stuart Christhilf, and any other agreements executed in connection with the Contemplated Transactions.

      “Wire Transfer Instruction Form” means the wire transfer instruction form attached hereto as Exhibit A .

      “Working Capital Closing Statement” - as defined in Section 2.5(a).

     “ Working Capital Methodology ” means the accounting principles, practices and policies used in the preparation of the 2006 Balance Sheet except as modified as described on Schedule 1.3 .

      “WCP” – as defined in the Recitals of this Agreement.

     “ 2006 Balance Sheet ” means the audited consolidated balance sheet of the CAC and its Subsidiaries as of June 30, 2006.

      “2007 Estimated Tax Obligation” – as defined in Section 2.3(c).

      “2007 Estimated Tax Refund” – as defined in Section 2.3(c).

      “2007 Tax Obligation” – as defined in Section 11.1(c).

      “2007 Tax Refund” – as defined in Section 11.1(c).

     “ 2007 Year End Bonuses ” means any performance bonus, whether or not discretionary, that would be payable to employees of the Companies based on individual performance or the performance of the Companies with respect to any period preceding the Closing.

2. Sale, Redemption and Contribution of Shares; Closing

      2.1 Contribution

     Subject to the terms and conditions of this Agreement, at the Closing, each of the Rollover Shareholders, severally and not jointly, shall contribute his Rollover Shares to Buyer in exchange for the issuance by Buyer to such Rollover Shareholder of the equity interests of Buyer set forth opposite such Rollover Shareholder’s name on the Information Exhibit attached as Exhibit B to the Amended and Restated LLC Agreement (the “ Rollover Equity ”). The parties hereto acknowledge and agree that the contribution of the Rollover Shares to Buyer in exchange for the Rollover Equity is intended to qualify as a tax-free contribution of property under IRC §721 and the treasury regulations promulgated thereunder. The Rollover Amount of each Rollover Shareholder is set forth opposite such Rollover Shareholder’s name on Schedule 2.1 .

      2.2 Sale of Purchased Shares and Redemption of Redeemed Shares

     Subject to the terms and conditions of this Agreement, at the Closing, (i) CODI shall sell to Buyer, and Buyer shall purchase from CODI, the Purchased Shares, and (ii) CAC shall redeem, and each Seller, severally and not jointly, shall sell to CAC, such Seller’s Redeemed Shares. The purchase price for each Purchased Share and each Redeemed Share shall equal the Per Share Equity Value.

      2.3 Certain Events Prior to the Closing

     In addition to such other actions as may be provided for herein, prior to Closing:

     (a) The Companies shall obtain payoff letters with respect to the Debt to be Repaid, which payoff letters shall evidence the Debt Payoff Amount, and provide Buyer with a schedule of the Assumed Debt setting forth the amount thereof as of the Closing Date, each in form and substance reasonably satisfactory to Buyer.

     (b) The Sellers shall cause the Company to determine, in good faith, and deliver to Buyer prior to the Closing, a statement evidencing Sellers’ estimation of Adjusted Net Working Capital (the “ Estimated Working Capital Closing Statement ”) and, based thereon, a written estimate of the Adjustment Amount (the “ Estimated Adjustment Amount ”). The final Adjustment Amount shall be determined and paid in accordance with the provisions of Section 2.5.

     (c) The Sellers shall cause the Company to determine, in good faith, and deliver to Buyer prior to the Closing, a statement evidencing Sellers’ estimation of 2007 Tax Refund (the “ 2007 Estimated Tax Refund ”) or 2007 Tax Obligation (the “ 2007 Estimated Tax Obligation ”), as the case may be. The actual 2007 Tax Refund or 2007 Tax Obligation, as the case may be, shall be determined and paid in accordance with the provisions of Section 11.1.

     (d) WCP and Blackstone Mezzanine Holdings II, L.P. and its Affiliates shall contribute to Buyer cash in an aggregate amount equal to the Equity Financing.

     (e) Each Seller shall deliver to Buyer a full and complete Wire Transfer Instruction Form.

     (f) Each CAC Option that is outstanding immediately prior to the Closing shall be canceled effective immediately prior to the Closing pursuant to the terms of this Agreement in exchange for the right to receive at Closing a cash payment in the amount of $1,973,640 net of applicable withholding taxes (the “ Option Termination Payment ”).

     (g) Immediately prior to the Closing, the Companies (other than Diablo) shall, in consultation with the Buyer, use the maximum amount of their available Cash to pay down the Indebtedness (other than the Assumed Debt) to the greatest extent possible; provided, that the failure to do so shall not result in any liability to the Sellers.

     (h) The Sellers shall cause the Company to determine, in good faith, and deliver to Buyer prior to the Closing, (i) the Company Transaction Expenses, (ii) the aggregate amount of principal and interest due and payable under the Promissory Notes computed as of the Closing Date, and (iii) a closing statement (the “ Closing Statement ”) setting forth the Sellers’ good faith estimated calculation of the Equity Value and Per Share Equity Value, which amounts shall be determined by taking into account all provisions establishing the basis for such calculation set forth in this Agreement, be based upon the estimates provided in this Section 2.3, and shall include each item in the definition of Equity Value as a separate line item. The Company shall provide Buyer with such supporting documentation used in calculating the amounts set forth in this Section 2.3 and such other documentation as Buyer may reasonably request. Buyer’s failure to object to any of the items set forth on the Closing Statement shall not limit or alter any of Buyer’s rights and remedies under this Agreement.

      2.4 Closing

     Subject to the provisions of Section 7 and Section 8, the purchase, sale, redemption and contribution of the Shares and other transactions provided for in this Agreement (the “ Closing ”) will take place at the offices of            Alston & Bird LLP, 90 Park Avenue, New York, New York 10016, at 10:00 A.M . (local time) on the Closing Date. At the Closing, in addition to such other actions as may be provided for herein:

     (a) Each Rollover Shareholder shall contribute his Rollover Shares to Buyer in accordance with Section 2.1 and in connection therewith shall deliver to Buyer any and all stock certificates representing the Rollover Shares, duly endorsed (or accompanied by appropriate stock powers) for transfer to Buyer.

     (b) WCP and each Rollover Shareholder shall enter into the Amended and Restated LLC Agreement of Buyer, substantially in the form attached hereto as Exhibit B (the “ Amended and Restated LLC Agreement ”) providing for the relative rights,

privileges and obligations of the holders of the equity interests of Buyer, including the Rollover Equity, following consummation of the Contemplated Transactions.

     (c) The Company and D’Arcy shall enter into the Amendment to Employment Agreement substantially in the form attached hereto as Exhibit C .

     (d) The Sellers and CAC shall deliver to Buyer the certificates required to be provided by them as set forth in Section 7.1, and Buyer shall deliver to the Sellers’ Representative the certificates provided for in Section 8.1.

     (e) Each Rollover Shareholder that is an obligor under a Promissory Note shall pay its Promissory Note in full (including all principal and interest accrued through the Closing Date) and, to the extent not repaid in full, the Companies shall have the right to offset at the Closing any amounts due such Rollover Shareholder pursuant to this Agreement by the amount of such Promissory Note (including all principal and accrued interest) of such Rollover Shareholder on the Closing Date.

     (f) The Buyer shall use the proceeds of the Equity Financing to acquire the Purchased Shares from CODI in accordance with Section 2.2 and CODI shall deliver a certificate or certificates representing the Purchased Shares, duly endorsed (or accompanied by duly executed stock powers) for transfer to Buyer. Buyer’s payment for the Purchased Shares shall be made by wire transfer of immediately available funds pursuant to wire transfer instructions as set forth on the Wire Transfer Instruction Form.

     (g) Buyer shall cause the Companies to borrow funds pursuant to the Credit Agreements.

     (h) Buyer shall cause the Companies to use a portion of the Debt Financing Proceeds to satisfy in full the Debt to be Repaid.

     (i) Buyer shall cause CAC to use a portion of the Debt Financing Proceeds to acquire the Redeemed Shares from the Sellers in accordance with Section 2.2 and each such Seller shall deliver a certificate or certificates representing such Seller’s Redeemed Shares, duly endorsed (or accompanied by duly executed stock powers) for transfer to CAC. The payment due from CAC to each Seller for such Seller’s Redeemed Shares shall equal to the sum of (A) the product obtained by multiplying (x) the Per Share Equity Value, by (y) the aggregate number of Redeemed Shares owned of record by such Seller as set forth in Part 3.3 of the Disclosure Letter, minus , (B) the product obtained by multiplying (x) such Seller’s (other than CODI and Norwest) Holdback Percentage by (y) the Holdback Amount. CAC’s payment for the Redeemed Shares shall be made by wire transfer of immediately available funds pursuant to wire transfer instructions set forth in the Wire Transfer Instruction Form.

     (j) Buyer shall cause the Company to use a portion of the Debt Financing Proceeds to pay the Holdback Amount to the Sellers’ Representative which amount shall be held in accordance with Section 12.14.

     (k) Buyer shall cause the Company to use a portion of the Debt Financing Proceeds to pay the Option Termination Payment to D’Arcy.

     (l) Buyer shall cause the Company to use a portion of the Debt Financing Proceeds to pay the Company Transaction Expenses to the extent such amounts reduce the Equity Value for purposes of determining the amount payable to the Sellers.

     (m) Buyer shall cause the Company to use a portion of the Debt Financing Proceeds to pay the Buyer’s Transaction Expenses.

     (n) Buyer shall cause the Company to pay the D’Arcy Interest Bonus.

     (o) CAC and the Company shall enter into an Indemnification Agreement substantially in the form attached hereto as Exhibit D with each of Arthur C. Roselle and Stuart Christhilf.

     (p) Each person (other than D’Arcy) serving as a director on the board of directors or similar governing body of any the Companies (other than Diablo) shall resign effective upon the Closing.

      2.5 Adjustment Procedure

     (a) Within sixty (60) days after the Closing Date, Buyer shall cause the Companies to prepare and deliver to Sellers’ Representative a statement evidencing its determination of actual Adjusted Net Working Capital (the “ Working Capital Closing Statement ”) and, based thereon, the Adjustment Amount, which Working Capital Closing Statement shall be prepared, and the Adjusted Net Working Capital determined, on a basis consistent with the preparation of the Estimated Working Capital Closing Statement and in accordance with the Working Capital Methodology. Sellers’ Representative may object to the determination by Buyer of the Adjustment Amount by delivery of a written statement of objections (stating the basis of the objections with reasonable specificity) to Buyer within thirty (30) days following delivery to Sellers’ Representative of such Working Capital Closing Statement but only on the basis that the amounts reflected therein were not arrived at in accordance with this Agreement or resulted from a mistake of fact or other inaccuracy. If Sellers’ Representative makes such objection, then Buyer and Sellers’ Representative shall seek in good faith to resolve all disagreements set forth in such written statement of objections within twenty (20) days following the delivery thereof to Buyer. If Sellers’ Representative does not make such objection within such 30-day period, such Working Capital Closing Statement and, based thereon, the Adjustment Amount shall be considered final and binding upon the parties.

     (b) If the Adjustment Amount as finally determined is:

     (i) less than the Estimated Adjustment Amount, then, within five (5) business days of final determination of the Adjustment Amount, each Seller shall pay or cause to be paid to Buyer such Seller’s Pro Rata Percentage of the amount

of such short fall, by wire transfer of immediately available funds to such bank account of Buyer as Buyer shall specify to Sellers’ Representative in writing; provided, however, that, to the extent Beckwith then retains any Holdback Amount, Beckwith shall, to the extent of the applicable funds, satisfy each such Seller’s (other than CODI and Norwest) allocable portion of such short fall therefrom; or

     (ii) greater than the Estimated Adjustment Amount, then, within five (5) business days of final determination of the Adjustment Amount, the Buyer shall pay to each Seller such Seller’s Pro Rata Percentage of the amount of such excess, in immediately available funds, by wire transfer to such bank account or accounts of such Seller as Sellers’ Representative shall specify to Buyer in writing.

     (c) After the Closing, Buyer shall permit Sellers’ Representative and its Representatives to have reasonable access to, and to examine and make copies of, the books and records of the Companies as Sellers’ Representative shall reasonably determine necessary for purposes of timely reviewing the Working Capital Closing Statement.

     (d) In the event Buyer and Sellers’ Representative are unable to agree on the final Adjustment Amount, either party may elect, by written notice to the other party, to have such disagreement resolved by an accounting firm of recognized national standing reasonably acceptable to both Buyer and Sellers’ Representative (the “ Selected Accounting Firm ”). The Selected Accounting Firm shall make a final and binding resolution of the Adjustment Amount. The Selected Accounting Firm shall be instructed that, in making its final and binding resolution, it must select either the Adjustment Amount either as proposed by Sellers’ Representative or Buyer. No appeal from such determination shall be permitted. The Selected Accounting Firm shall be further instructed to use every reasonable effort to perform its services within thirty (30) days after submission of the Working Capital Closing Statement to it, and in any case, as soon as practicable after such submission. The costs and expenses for the services of the Selected Accounting Firm shall be borne by the non-prevailing party. Judgment upon any award or decision by the Selected Accounting Firm may be enforced by any court having jurisdiction thereof.

     (e) The parties agree that the purpose of preparing the Working Capital Closing Statement and determining the final Adjustment Amount is to measure changes in the components taken into consideration in determining the Adjusted Net Working Capital, which components were used in the calculation of the Reference Net Working Capital attached to the Working Capital Methodology. Such process is not intended to permit the introduction of different components, judgments, accounting methods, policies, principles, practices, procedures, classifications or estimation methodologies for the purpose of preparing the Working Capital Closing Statement or determining the final Adjustment Amount from the judgments, accounting methods, policies, principles, practices, procedures, classifications or estimation methodologies described in the

Working Capital Methodology or used in determining the Reference Net Working Capital.

      2.6 Releases

     Effective as of the Closing, and subject to and in consideration of (i) the Buyer’s issuance of the Rollover Equity on the Closing Date and payment for the Purchased Shares and (ii) CAC’s payment for the Redeemed Shares, in each case, pursuant to this Agreement, each Seller for itself and (except in the case of Norwest) its affiliates and its Related Persons, as applicable, hereby releases and forever discharges the Buyer and the Companies, and each of the Buyer’s and the Companies’ respective individual, joint or mutual, past, present and future representatives, affiliates, principals, officers, employees, agents, attorneys, representatives, insurers, subrogors, subrogees, licensees, predecessors, members, directors, managers, stockholders, limited partners, controlling persons, subsidiaries, successors and assigns (individually a “ Releasee ” and collectively, the “ Releasees ”) from any and all claims, demands, Proceedings, causes of action (including those arising out of or in any way related to any federal, state or local law prohibiting discrimination on the basis of age, race, color, religion, disability, sex, national origin, citizenship or other protected classification, including, without limitation, claims under Title VII, the Age Discrimination in Employment Act, the Employee Retirement Income Security Act, and the Americans With Disabilities Act), suits, Orders, obligations, rights of indemnification, contribution or subrogation, contracts, agreements, debts and liabilities whatsoever, whether known or unknown, by statute, at law and in equity (the “ Released Claims ”) which such Seller (or, except in the case of Norwest, any of its affiliates, or Related Persons) now has, has ever had or may hereafter have against the respective Releasees (i) arising contemporaneously with or prior to the Closing or (ii) on account of or arising out of any matter, cause or event occurring contemporaneously with or prior to the Closing and, in either case, related to the ownership of the Shares, service as an officer or director of any of the Companies, or the business and affairs of any of the Companies, including, without limitation, all such Released Claims arising under or in connection with any financing, guaranty or other financial accommodation (and all subrogation rights that may arise in the future on account thereof), investment, advance, loan, lease, provision of goods or services, Contracts (including any Organizational Documents) or other undertaking or transaction entered into with or on behalf of the Companies by any such Seller (or, except in the case of Norwest, any of its affiliates or Related Persons); provided , however , that nothing contained herein shall operate to release any obligation (i) of the Companies or the Buyer arising pursuant to this Agreement or the other Transaction Documents, (ii) of any of the parties to the Related Person transactions described or disclosed in Part 3.A4 of the Disclosure Letter which are not being terminated hereunder at the Closing pursuant to Section 12.4, or (iii) pursuant to any employment arrangement (including the Employment and Non-Competition Agreement dated as of February 10, 2004 by and between D’Arcy and the Company, as amended) for events arising on or after the Closing or for accrued salary and benefits earned through the Closing and such employment arrangements shall remain in full force and effect pursuant to its respective terms following the Closing. Each Seller acknowledges that it may hereafter discover claims or facts in addition to or different from those which it now knows or believes to exist with respect to the subject matter of

this release and which, if known or suspected at the time of executing this release, may have materially affected its willingness to enter into this release. Nevertheless, each Seller hereby waives any right, claim, or cause of action that might arise as a result of such different or additional claims or facts.

3. Representations and Warranties of CAC

     CAC hereby represents and warrants to Buyer, as of the date of this Agreement, as follows:

      3.1 Organization and Good Standing

     (a)  Part 3.1 of the Disclosure Letter contains a complete and accurate list of the exact legal name of each of the Companies, together with their respective jurisdictions of incorporation or organization. Each of the Companies is duly organized, validly existing, and in good standing under the laws of its jurisdiction of incorporation or organization, with full corporate power and authority to conduct its business as it is now being conducted, to own or use the properties and assets that it purports to own or use, and to perform all its obligations under Applicable Contracts.

     (b)  Part 3.1 of the Disclosure Letter contains a complete and accurate list of the jurisdictions in which each of the Companies is authorized to do business as a foreign entity. Each of the Companies is duly qualified to do business as a foreign entity and is in good standing under the laws of each state or other jurisdiction in which either the ownership or use of the properties owned or used by it, or the nature of the activities conducted by it, requires such qualification, except where the failure to be so qualified or in good standing would not reasonably be expected to have a Material Adverse Effect.

     (c) Except for the Companies listed in Part 3.1 of the Disclosure Letter, neither CAC nor the Company has any Subsidiaries or ownership interest, directly or indirectly, in any other Person.

     (d) CAC has delivered or caused to be delivered or otherwise made available to Buyer true and correct copies of the Organizational Documents of each of the Companies as currently in effect and as in effect at the Closing.

      3.2 Authority; No Conflict

     (a) This Agreement constitutes the legal, valid and binding obligation of CAC, enforceable against it in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium and other laws affecting creditors’ rights generally and general principles of equity. CAC has the full power and authority to execute and deliver this Agreement and to perform its obligations hereunder. The execution and delivery by CAC of this Agreement and any related agreements to which it is a party and the consummation by it of the Contemplated Transactions and any transactions contemplated by such related agreements (to the extent applicable to it) have been duly authorized and approved and no other action with respect to CAC is necessary

in order to authorize this Agreement, such related agreements or the Contemplated Transactions.

     (b) Except as set forth in Part 3.2 of the Disclosure Letter, neither the execution and delivery of this Agreement nor the consummation or performance of any of the Contemplated Transactions will, directly or indirectly (with or without notice or lapse of time):

     (i) contravene, conflict with or result in a violation of (A) any provision of the Organizational Documents of any of the Companies, or (B) any resolution adopted by the board of directors, the stockholders or the members, as applicable, of any of the Companies;

     (ii) contravene, conflict with or result in a violation of, or give any Governmental Body or other Person the right to challenge any of the Contemplated Transactions or to exercise any remedy or obtain any relief under, any Legal Requirement or any Order to which any of the Companies, or any of the assets owned or used by any of them, may be subject;

     (iii) contravene, conflict with or result in a violation of any of the terms or requirements of, or give any Governmental Body the right to revoke, withdraw, suspend, cancel, terminate or modify, any Governmental Authorization that is held by any of the Companies or that otherwise relates to the business of, or any of the assets owned or used by any of the Companies;

     (iv) contravene, conflict with or result in a violation or breach of any provision of, or give any Person the right to declare a default or exercise any remedy under, or to accelerate the maturity or performance of, or to cancel, terminate or modify, any material Applicable Contract of the Companies; or

     (v) result in the imposition or creation of any Encumbrance (other than Permitted Encumbrances) upon or with respect to any of the assets owned or used by any of the Companies.

Except as set forth in Part 3.2 of the Disclosure Letter, none of the Companies is, or will be, required to give any notice to or obtain any Consent from any Person in connection with the execution and delivery of this Agreement or the consummation or performance of any of the Contemplated Transactions.

      3.3 Capitalization

      Part 3.3 of the Disclosure Letter contains a complete and accurate listing of the authorized, issued and outstanding equity securities, together with, where applicable, the par value thereof, of each of the Companies. CAC is and will be on the Closing Date immediately prior to the Closing the record and beneficial owner and holder of all the equity securities of the Company, and the Company is and will be on the Closing Date immediately prior to the Closing the record and beneficial owner and holder of all the equity securities of the Subsidiaries (other than Diablo), in each case, free and clear of all

Encumbrances on the Closing Date. The Company is and will be on the Closing Date immediately prior to the Closing the record and beneficial owner and holder of 50% of the membership interests of Diablo free and clear of all Encumbrances on the Closing Date. All of the equity securities of the Companies have been duly authorized and validly issued and are fully paid and nonassessable. Part 3.3 of the Disclosure Letter sets forth all options, warrants, calls, commitments, Contracts or other rights relating to the issuance, sale, or transfer of any securities of the Companies as are in effect immediately prior to the Closing (the “ Contingent Securities ”). Other than as set forth in Part 3.3 of the Disclosure Letter and other than as may be established or initiated by Buyer, after giving effect to the Contemplated Transactions, following the Closing Date there will be no Contingent Securities outstanding. None of the outstanding securities of the Companies were issued in violation of the Securities Act or of any applicable state securities or blue sky laws. Except as set forth in Part 3.3 of the Disclosure Letter, there are no Contracts relating to the issuance, sale or transfer of any equity securities of any of the Companies, and none of the Companies owns, or has any Contract to acquire, any equity securities of any Person or any direct or indirect equity or ownership interest in any other business.

      3.4 Financial Statements

     CAC has delivered, or has caused to be delivered, to Buyer: (a) audited consolidated balance sheets of the Companies as at each of June 30, 2006 (the “ Balance Sheet ”), June 30, 2005 and June 30, 2004 (including, in each case, the notes thereto), and the related audited consolidated statements of income, changes in stockholders’ equity, and cash flow for each of the fiscal years then ended, together with the report thereon of the independent certified public accountants (the “ Audited Financial Statements ”), and (b) unaudited consolidated balance sheet of the Companies as of December 3, 2006 (the “ Interim Balance Sheet ”) and the related unaudited consolidated statements of income and cash flow for the approximately five (5) fiscal months then ended, certified by the Company’s chief financial officer (collectively, the “ Unaudited Financial Statements ” and together with the Audited Financial Statements, the “ Financial Statements ”). Except as set forth on Part 3.4 of the Disclosure Letter, the Financial Statements fairly pres            ent in all material respects the financial condition and the results of operations, changes in shareholders’ equity, and cash flow of the Companies as at the respective dates thereof and for the periods referred to therein, and were prepared in accordance with GAAP, subject, in the case of the Unaudited Financial Statements, to normal recurring year-end adjustments (none of which would, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect) and the absence of notes. The Financial Statements reflect the consistent application of such accounting principles throughout the periods involved, except as disclosed in the notes thereto or in the Disclosure Letter.

      3.5 Books and Records

     The books of account, minute books and stock record books of the Companies, all of which have been made available to Buyer and its Representatives, are complete and correct in all material respects, and have been maintained in accordance with sound business practices. Except as set forth in Part 3.5 of the Disclosure Letter, the minute

books of the Companies contain accurate and complete records of all meetings held of, and corporate action taken by, the stockholders or members, the boards of directors or managers, and committees of such boards, and no meeting of any such stockholders, board of directors, or committee has been held for which minutes have not been prepared and are not contained in such minute books. At the Closing, all of such books and records will be in the possession of the Companies.

      3.6 Title to Properties; Encumbrances

     (a)  Real Property . Part 3.6 of the Disclosure Letter lists all the real property owned by the Companies (the “ Owned Real Property ”) and leased by the Companies. The Companies have good and valid title to the Owned Real Property, free and clear of all Encumbrances, except Permitted Encumbrances. The Real Property is in material compliance with all applicable building, zoning, subdivision, health and safety and other Legal Requirements (collectively, the “ Real Property Laws ”). None of the Companies has received any notice of violation of any Real Property Law and, to CAC’s Knowledge, there is no basis for the issuance of any such notice or the taking of any action for any such violation. All water, oil, gas, electrical, telecommunications, sewer, storm and waste water systems and other utility services or systems for the Real Property have been installed and are operational and sufficient for the operation of the business presently conducted, normal wear and tear and regularly scheduled maintenance excepted. CAC has delivered or otherwise made available to Buyer correct and complete copies of all leases (as amended or modified through the Closing Date) listed in Part 3.6 of the Disclosure Letter. Each such lease is legal, valid, binding and enforceable against the Companies and, to CAC’s Knowledge, against the other parties thereto and is in full force and effect, in each case subject to proper authorization and execution of such lease by the other party and the application of any bankruptcy or creditor’s rights laws or general principles of equity. Neither the Companies, nor, to CAC’s Knowledge, any other party to any lease, is in default, and to CAC’s Knowledge, no event has occurred or circumstance exists which, with the delivery of notice, the passage of time or both, would constitute such a breach or default, or permit the termination, modification or acceleration of rent under such lease.

     (b)  Personal Property . The Companies have good and valid title to, or a valid leasehold interest in, all of the personal properties and assets owned by each of them or used in its respective business, including, without limitation each item of equipment and other personal property, tangible, intangible or otherwise included as an asset in the Interim Balance Sheet (other than inventory and equipment disposed of in the Ordinary Course of Business since the date of the Interim Balance Sheet), and to each item of personal property, acquired since the date of the Interim Balance Sheet (collectively, the “ Personal Property ”), free and clear of any Encumbrances, except Permitted Encumbrances. With respect to each lease of Personal Property: (i) such lease is legal, valid, binding and enforceable against the Companies and, to CAC’s Knowledge, against the other parties thereto and is in full force and effect, in each case subject to proper authorization and execution of such lease by the other party and the application of any bankruptcy or creditor’s rights laws or general principles of equity, (ii) the Companies have delivered or made available to the Buyer or its Representatives true, complete and

accurate copies of each of the leases described in Part 3.6(b) of the Disclosure Letter, and none of the leases have been modified in any respect, except to the extent that such modifications are disclosed by the copies delivered or made available to the Buyer; and (iii) neither the Companies nor, to CAC’s Knowledge, any other party to such lease, is in default, and to CAC’s Knowledge, no event has occurred or circumstance exists which, with the delivery of notice, the passage of time or both, would constitute such a breach or default, or permit the termination, modification or acceleration of payment under such lease.

      3.7 Condition and Sufficiency of Assets

     The buildings, plants, structures, and equipment of the Companies are structurally sound, are in good operating condition and in a good state of maintenance and repair, ordinary wear and tear excepted, and are adequate for the uses to which they are being put, and none of such buildings, plants, structures, or equipment is in need of maintenance or repairs, except for ordinary, routine or non-material maintenance and repairs. Except as set forth in Part 3.7 of the Disclosure Letter, the building, plants, structures, equipment and other tangible assets, intangible assets and other assets of the Companies will be sufficient for the continued conduct of the business of the Companies after the Closing in substantially the same manner as conducted prior to the Closing.

      3.8 Accounts Receivable

     All accounts receivable of the Companies that are reflected on the Interim Balance Sheet or on the accounting records of the Companies as of the Closing Date (collectively, the “ Accounts Receivable ”) represent or will represent valid obligations of the respective account debtors arising from sale actually made or services actually performed in the Ordinary Course of Business. Unless paid prior to the Closing Date, the Accounts Receivable will be current and, to CAC’s Knowledge, collectible net of the respective reserves shown on the Balance Sheet or the Interim Balance Sheet or on the accounting records of the applicable Acquired Company as of the Closing Date (which reserves are adequate and calculated consistent with past practice in accordance with GAAP). There is no contest, claim, or right of set-off that is not reserved for under any Contract with any obligor of an Accounts Receivable relating to the amount or validity of such Accounts Receivable, as so reserved.

      3.9 Inventory

     All inventory of the Companies, consists of a quality and quantity usable and salable in the Ordinary Course of Business, except for obsolete items and items of below-standard quality, all of which have been written off or written down to net realizable value in the Interim Balance Sheet, on the accounting records of the Companies as of the Closing Date or pursuant to the Working Capital Methodology, as

the case may be. All inventories not written off have been priced at the lower of cost or market on a first in, first out basis.

      3.10 Taxes

     (a) The Companies have timely filed or caused to be filed all material Tax Returns that are or were required to be filed by or with respect to any of them, either separately or as a member of a group of corporations, pursuant to applicable Legal Requirements. Except as set forth in Part 3.10(a) of the Disclosure Letter, each of the Companies has paid, or made provision for the payment of, all Taxes that have or may have become due pursuant to such Tax Returns, or pursuant to any assessment received by any of the Companies, except such Taxes, if any, as are being contested in good faith. CAC has delivered or made available to Buyer copies of all such Tax Returns filed as of the date of this Agreement for the last two (2) fiscal years of the Companies.

     (b) Except as described in Part 3.10(b) of the Disclosure Letter, since February 10, 2004, none of the Companies:

     (i) is or has been the subject of a Tax audit or examination;

     (ii) has consented to extend the time, or is the beneficiary of any extension of time, in which any Tax may be assessed or collected by any taxing authority; or

     (iii) has received from any taxing authority any written notice of proposed adjustment, deficiency, underpayment of Taxes or any other such written notice which has not been satisfied by payment or been withdrawn.

     (c) The charges, accruals, and reserves with respect to Taxes on the respective books of the Companies are materially adequate (determined in accordance with GAAP) with respect to the Companies’ liability for Taxes. To CAC’s Knowledge, there exists no proposed material Tax assessment against the Companies except as disclosed in Part 3.10 of the Disclosure Letter. To CAC’s Knowledge, all material Taxes that the Companies are or were required by Legal Requirements to withhold or collect hav