CLASS B COMMON STOCK AND WARRANT PURCHASE AGREEMENT

EXHIBIT 10.17

CLASS B COMMON STOCK AND WARRANT PURCHASE AGREEMENT

by and among

RAYMOND KARSAN HOLDINGS, INC.

and

PARTHENON INVESTORS, L.P.

PCIP INVESTORS

JMH PARTNERS CORP.

SHAD RUN INVESTMENTS, L.P.

TSG CO-INVESTORS, LLC

THE SHATTAN GROUP, LLC

THOMAS S. SHATTAN

GREGORY E. MENDEL

G. KEVIN FECHTMEYER

Dated as of December 16, 1999

CLASS B COMMON STOCK AND WARRANT PURCHASE AGREEMENT

This Class B Common Stock and Warrant Purchase Agreement (the “Agreement”) dated as of December 16, 1999 by and among Raymond Karsan Holdings, Inc., a Pennsylvania corporation (“RK Holdings” and together with its subsidiaries, the “Company”), Parthenon Investors, L.P., a Delaware limited partnership (the “Parthenon Investors”), PCIP Investors, a Delaware general partnership (“PCIP”), JMH Partners Corp., a Delaware corporation (together with Parthenon Investors and PCIP, “Parthenon”), Shad Run Investments, L.P., a Delaware limited partnership (“Shad Run”), TSG Co-Investors, LLC, a Delaware limited liability company (“TSG”), The Shattan Group, LLC, a Delaware limited liability company, Thomas S. Shattan, Gregory E. Mendel, and G. Kevin Fechtmeyer (together with The Shattan Group, LLC, Thomas S. Shattan and Gregory E. Mendel, “Shattan”) (Shattan, Parthenon, Shad Run and TSG are referred to herein collectively as the “Investors”) provides for the issuance and sale of certain shares of Class B common stock and warrants for the purchase of Class A common stock of the Company. To the extent an Investor assigns certain of its rights under this Agreement to any co-investment fund or Affiliate, such entities, together with the Investors, will be referred to as the “Investors.”

Recitals

WHEREAS, the Company recently effected a reorganization (the “Reorganization”), whereby International Holding Company, Inc., a Pennsylvania corporation (“IHC”) and Insurance Services, Inc., a Pennsylvania corporation (“ISI”) were merged with and into Raymond Karsan Associates, Inc. (“RKA”), a wholly owned subsidiary of RK Holdings;

WHEREAS, RK Holdings wishes to issue and sell to Parthenon, Shad Run and TSG and Parthenon, Shad Run and TSG wish to purchase from RK Holdings 98,948 shares of Class B Common Stock, $.01 par value (“Class B Common Stock”), of RK Holdings, Warrants for the purchase of 9,905 shares of Class A Common Stock, $.01 par value, of RK Holdings (“Class A Common Stock”) at an exercise price of $0.01 per share, in the form of Exhibits A-1 and A-2 hereto (the “Class A-1 Warrants” and “Class A-2 Warrants”), Warrants for the purchase of 17,888 shares of Class A Common Stock of RK Holdings at an exercise price of $835.00 per share, in the form of Exhibit B hereto (the “Class B Warrants” and, collectively with the Class A-1 and A-2 Warrants, the “Cash Warrants”), and certain rights to require the Company to repurchase certain shares of Class B Common Stock and Warrants pursuant to the Investor Put Agreements between RK Holdings and each of such Investors (the “Put Rights”). The Class B Common Stock, the Cash Warrants, and the Put Rights are referred to herein collectively as the “Purchased Securities”. The terms of the Class B Common Stock are set forth in the Amended and Restated Articles of Incorporation of RK Holdings, a copy of which is set forth as Exhibit F hereto, which has been filed by RK Holdings with the Pennsylvania Secretary of State’s office immediately prior to the Closing hereunder.

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WHEREAS, RK Holdings wishes to issue and sell to Shattan, and Shattan wishes to purchase from RK Holdings, Warrants for the purchase of 3,962 shares of Class A Common Stock, at an exercise price of $167 per share, in the form of Exhibit D hereto (the “Class D Warrants”) and Warrants for the purchase of 328 shares of Class A Common Stock of RK Holdings, at an exercise price of $835 per share, in the form of Exhibit E hereto (the “Class E Warrants”, and together with the Class D Warrants, the “Shattan Warrants”). The Cash Warrants and the Shattan Warrants are referred to collectively herein as the “Investor Warrants”;

WHEREAS, the Company will redeem at Closing, on terms which shall be reasonably satisfactory to the Investors, all of its capital stock owned by each of Barry Raymond and Jerry Connolly for an aggregate price of $7,338,564.00 (the “Raymond Redemption Agreement” and the “Connolly Redemption Agreement”, respectively);

WHEREAS, the Company will issue Class C-1 Warrants and Class C-2 Warrants for the purchase, in the aggregate, of 9,905 shares of Class A Common Stock to Existing Stockholders as a dividend on the Closing Date;

WHEREAS, the Board of Directors of RK Holdings has approved and deems it advisable and in the best interest of RK Holdings to complete the transactions hereinabove described upon the terms and subject to the conditions set forth herein; and

WHEREAS, in furtherance of such transactions, the Board of Directors of each of RK Holdings, ISI and IHC have unanimously approved and the stockholders of both ISI and IHC have each by majority vote approved 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:

Certain capitalized terms are used in this Agreement as specifically defined herein. These definitions are set forth or referred to in Section 10 hereof.

2.1 The Issuance and Sale . On the Closing Date (as defined in Section 3.1 below), subject to the terms and conditions set forth in this Agreement, Parthenon, Shad Run and TSG will purchase and RK Holdings will sell and issue: (a) 98,948 shares of RK Holdings’ Class B Common Stock, (b) the Class A-1, Class A-2 and Class B Warrants for the purchase of shares of RK Holdings’ Class A Common Stock, and (c) the Put Rights requiring RK Holdings to

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repurchase from Parthenon, Shad Run and TSG certain shares of Class B Common Stock and Warrants for $22,000,000 (the “Cash Investment”).

2.2 The Seller Warrants . On the Closing Date (as defined in Section 3.1 below), RK Holdings will issue to the Existing Stockholders as a dividend Class C-1 and Class C-2 Warrants for the purchase, in the aggregate, of 9,905 shares of RK Holdings’ Class A Common Stock, in the form of Exhibit C-1 and Exhibit C-2 hereto (the “Seller Warrants”).

2.3 The Shattan Warrants . On the Closing Date (as defined in Section 3.1 below), subject to the terms and conditions set forth in this Agreement, RK Holdings will issue to Shattan (a) the Class D Warrants for the purchase of 3,962 shares of RK Holdings’ Class A Common Stock and (b) the Class E Warrants for the purchase of 328 shares of RK Holdings’ Class A Common Stock.

2.4 Purchase Price Adjustments .

2.4.1 In the event that the Company recognizes a Tax Liability at any time after the Closing, the aggregate amount paid for the Purchased Securities shall be adjusted and shall require either (a) a return of cash to the Investor equal to 47% of the total Tax Liability (the “Cash Adjustment”) or (b) a distribution of additional shares of Class B Common Stock equal to the amount of the Cash Adjustment divided by $167. RK Holdings shall make the foregoing adjustment in accordance with clause (b) above if the Board of Directors (including at least one Investor Director) determines that making the adjustment pursuant to clause (a) above would (i) constitute, result in or give rise to any breach or violation of, or any default or right or cause of action under, any agreement to which the Company is, from time to time, a party or (ii) leave the Company with less cash than, in the good faith judgment of the Board of Directors, is necessary to operate the business of the Company and its subsidiaries in the ordinary course or business.

2.4.2 After the Closing, the number of outstanding Investor Securities and Seller Warrants shall be adjusted (the “ Adjustment ”) as follows:

(a) the Company shall issue (i) to each Investor a number of additional shares of Class B Common Stock equal to such Investor’s Class B Common Adjustment, if any, (ii) to each Investor, additional Class A Warrants exercisable for a number of shares of Class A Common Stock equal to such Investor’s Class A Warrant Adjustment, (iii) to each Parthenon Investor additional Class B Warrants exercisable for a number of shares of Class A Common Stock equal to its Class B Warrant Adjustment, if any, (iv) to each holder, additional Class C Warrants exercisable for a number of shares of Class A Common Stock equal to

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such holder’s Class C Warrant Adjustment, (v) additional Class D Warrants exercisable for a number of shares of Class A common Stock equal to the Class D Warrant Adjustment, if any, and (vi) additional Class E Warrants exercisable for a number of shares of Class A common Stock equal to the Class E Warrant Adjustment, if any.

(b) each Call Right Agreement and each Investor Put Agreement shall be automatically amended to increase the number of shares subject to the Class B Call Right and the Primary Put Right by the relevant Call Right Adjustment, if any, and to increase the number of shares subject to the Secondary Put Right by the relevant Put Right Adjustment, if any.

2.4.3 As soon as practicable, and in any event within 120 days, after the Closing Date, the Company shall cause Deloitte & Touche LLP (or other independent certified public accountants of recognized national standing selected by Company) to prepare and deliver to Parthenon an audited consolidated balanced sheet as of December 31, 1999 and related statement of earnings of the Company for the year ended December 31, 1999 (the “ 1999 Statement of Earnings ”). The 1999 Statement of Earnings shall be prepared in accordance with GAAP in a manner consistent with the preparation of the Company’s most recent audited financial statements delivered to Parthenon prior to the date of this Agreement. The Company shall prepare and deliver to Parthenon, simultaneously with the delivery of the 1999 Statement of Earnings, a statement (the “ Statement ”) setting forth in reasonable detail the Company’s calculation of its Adjusted EBITDA, and its calculation of the Adjustment, if any.

2.4.4 Parthenon’s accountants shall, at the Company’s expense, have 45 days after the delivery of the 1999 Statement of Earnings and the Statement to dispute any portion of the Company’s calculation of the 1999 Statement of Earnings or the Adjustment (a “Dispute”). The Company shall cause its accountants to make their work papers available to Parthenon’s accountants. In the event of a Dispute, Parthenon or its accountants may deliver a notice of the Dispute to the Company (the “ Disagreement Notice ”), specifying, in reasonable detail, those items or amounts in the 1999 Statement of Earnings as to which Parthenon disagrees. If Parthenon does not deliver a Disagreement Notice to the Company within such 45-day period, the 1999 Statement of Earnings and the Statement shall become final, conclusive and binding on all of the parties hereto for all purposes of calculating the Adjustment and shall not be subject to appeal of any kind.

2.4.5 If Parthenon or its accountants delivers a Disagreement Notice to the Company pursuant to Section 2.4.4, Parthenon and its accountants and the Company and its accountants shall use their reasonable efforts to reach agreement

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on the disputed items or amounts in order to determine the Adjustment. If both parties do not resolve all disputed items or amounts within 30 days after delivery of the Disagreement Notice, this Agreement and the disputed items and amounts will be submitted to an independent nationally recognized accounting firm mutually acceptable to both Parthenon and the Company (the “ Independent Accountants ”) for determination of the appropriate Adjustment pursuant to this Section 2.4. The written report of the Independent Accountants (the “ Report ”) shall be delivered to each of the Company and Parthenon promptly, and shall be final, conclusive and binding upon each of the Sellers and the Buyer. The procedures for resolution of disputes concerning the 1999 Statement of Earnings and the Statement set forth in Section 2.4.4 hereof and this Section 2.4.5 shall be final, conclusive and binding on all of the parties hereto for all purposes of calculating the Adjustment, and shall not be subject to appeal of any kind. The fees and expenses of the Independent Accountants shall be borne equally by the Company, on the one hand, and the Investors, on the other hand, and each of the Company and the Investors agree to execute a reasonably acceptable engagement letter, if requested to do so by the Independent Accountants.

2.4.6 From the Closing Date until the final determination of the Adjustment, the Company shall give Parthenon, its accountants and the Independent Accountants, if any, reasonable access to the Company’s books and records and their respective employees who are responsible for financial matters.

2.4.7 The Adjustment, if any, shall be computed as follows:

(a) calculate the excess of $7.5 million over the Adjusted EBITDA (the “Deficit”),

(b) multiply the Deficit by 6, and divide by $45 million (the “Interim Adjustment Percentage”),

2.4.8 Calculation of adjusted total capitalization

(a) Management Share and Option Percentage (the “MSOP”) = TSOP-Interim Adjustment Percentage

(i) TSOP = total equity percentage prior to the Adjustment represented by shares held by stockholders other than Investors and by options outstanding or authorized for issuance pursuant to Section 6.9 (assuming the exercise of all options and the Class A and Class D Warrants)

(b) Total Outstanding Initial Adjusted (“TOIA”) = MSO/MSOP

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(i) MSO = total number of shares outstanding held by stockholders who are not investors and total shares of Class A Common Stock issuable in respect of options outstanding or authorized for issuance pursuant to Section 6.9

(c) Investor Percentage = with respect to any security in question, number of Class A shares represented by the amount of such security held by such holder/Investor prior to the Adjustment / total number of Class A shares represented by the total outstanding amount of such security prior to the Adjustment

2.4.9 Class A-1 Warrant Adjustments

(a) Adjusted Class A-1 Warrant (“ACAW”) = TOIA * CAWP * Investor Percentage

(i) CAWP = 2.5% + (.5 * Interim Adjusted Percentage)

(b) Class A Warrant Adjustment = ACAW - CAW

(i) CAW = total number of shares of Class A Common Stock issuable to such Investor upon the exercise of the Class A Warrant prior to the Adjustment

2.4.10 Class C-1 Warrant Adjustments

(a) Adjusted Class C Warrant (“ACCW”) = TOIA * CCWP * Investor Percentage

(i) CCWP = 2.5% + (.5 * Interim Adjusted Percentage)

(b) Class C Warrant Adjustment = ACCW - CCW

(i) CCW = total number of shares of Class A Common Stock issuable to such holder upon the exercise of the Class C Warrant prior to the Adjustment

2.4.11 Class D Warrant Adjustments

(a) Adjusted Class D Warrant (“ACDW”) = TOIA * 1.8%* Investor Percentage

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(b) Class D Warrant Adjustment = ACDW - CDW

(i) CDW = total number of shares of Class A Common Stock issuable to such Investor upon the exercise of the Class D Warrant prior to the Adjustment

2.4.12 Class B Warrant Adjustments

(a) Adjusted Class B Warrants (“ACBW”) = TOFD * 7.5% * Investor Percentage

(i) TOFD = MSO / DMSOP

(ii) DMSOP = MSOP * 92.36%

(b) Class B Warrant Adjustment = ACBW - CBW

(i) CBW = total number of shares of Class A Common Stock issuable to such Investor upon the exercise of the Class B Warrant prior to the Adjustment

2.4.13 Class E Warrant Adjustments

(a) Adjusted Class E Warrant (“ACEW”) = TOFD * 1.8% * Investor Percentage

(b) Class E Warrant Adjustment = ACEW - CEW

(i) CEW = total number of shares of Class A Common Stock issuable to such Investor upon the exercise of the Class E Warrant

2.4.14 Class B Common Stock Adjustments

(a) Investor Class B Common Initial Adjusted (“CBCIA”) = TOIA * CBP * Investor Percentage

(i) CBP = 27.5% + (.5 * Interim Adjustment Percentage)

(b) Investor Initial Adjusted Percentage (“IIAP”) = Investor Holdings / Adjusted Outstanding

(i) Investor Holdings = the sum of such Investor’s CBCIA, ACAW, ACBW, ACDW.

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(ii) Adjusted Outstanding = the sum of the CBCIA for all Investors + all outstanding Class A Common Stock + such Investor’s ACAW, ACBW and ACDW.

(c) Investor Final Adjustment Percentage (“IFAP”) = IIAP / 80%

(d) Investor Final Adjustment (“IFA”) = ((IFAP * Adjusted Outstanding) - Investor Holdings / (1 - IFAP))

(e) Class B Common Adjustment for each Investor = CBCIA + IFA + 5 - Class B Common Stock held by such Investor prior to the Adjustment

2.4.15 Call Right Adjustments

(a) Call Right Adjustment for each Investor = IFA + 5 - CRS

(i) CRS = number of shares of Class B Common Stock subject to the Class B Call Right in such Investor’s Call Right Agreement prior to the Adjustment.

2.4.16 Put Right Adjustments

(a) Put Right Adjustment for each Investor = CBCIA - PRS

(i) PRS = number of shares of Class B Common Stock subject to the Secondary Put Right in such Investor’s Investor Put Agreement prior to the Adjustment.

3.1 Time and Place of Closing . The closing of the purchase and sale of the Purchased Securities and the other transactions contemplated by this Agreement (the “Closing”) shall take place at the offices of Ropes & Gray, One International Place, Boston, or such other location as the parties may agree, at 10:00 a.m. (Boston time) on December 16, 1999 or if the conditions to Closing set forth in Sections 8 and 9 hereof shall not have been satisfied at such date, at such later time or date prior to termination of this Agreement as the Investors may specify by not fewer than three (3) business days prior written notice to the Company (such date being referred to herein as the “Closing Date”).

3.2 Closing Date Transfers . At the Closing:

3.2.1 Parthenon, Shad Run and TSG will deliver the Cash Investment to the Company by wire transfer of immediately available federal funds as directed by the Company; and

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3.2.2 the Company will issue to the Investors certificates and warrants representing the Purchased Securities and the Shattan Warrants.

In order to induce the Investors to enter into and perform this Agreement and to consummate the transactions contemplated hereby, the Company represents and warrants to the Investor as follows:

4.1 Organization, Power and Standing . RK Holdings and each of its Subsidiaries is a corporation duly organized or formed, validly existing and in good standing under the laws of the jurisdiction of its incorporation or formation, has all requisite corporate power and authority to execute, deliver and perform each of the Transaction Agreements to which it is a party, to carry on the Business as currently conducted and to consummate the transactions contemplated hereby. The Company has heretofore delivered to the Investors a true and complete copy of (a) the Charter and By-laws of the Company and each of its Subsidiaries (including the charter and By-laws of ISI and IHC in effect prior to the Reorganization), (b) the minute books of the Company and each of its Subsidiaries and (c) the stock or other ownership interest ledger of the Company and each of its Subsidiaries, each of which is accurate and complete through the date hereof. The Company is duly qualified or licensed to do business as a foreign corporation, and is in good standing as such, in each jurisdiction listed on Schedule 4.1, and the jurisdictions so listed are the only jurisdictions where the failure to be so qualified or licensed and in good standing would have a Material Adverse Effect.

4.2 Capitalization and Investments .

4.2.1 The total capital stock authorized and the capitalization of RK Holdings is set forth on Schedule 4.2.1. All of the Class A Common Stock will be owned of record by the Existing Stockholders on the Closing Date in the amounts set forth with respect to such stockholders under the heading “Class A Stock Ownership” on Schedule 4.2.1 hereto. All of the outstanding shares of capital stock of RK Holdings are duly authorized and validly issued, fully paid and nonassessable.

4.2.2 Except as set forth on Schedule 4.2.2, there is no Contractual Obligation or Charter or By-law provision which obligates the Company to issue, purchase or redeem, or make any payment in respect of, any shares of capital stock or other securities convertible into or exchangeable for shares of capital

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stock or which provides for any stock appreciation or similar right or grants any right to share in the equity, income, revenues or cash flow of the Company.

4.2.3 Except as set forth on Schedule 4.2.3, there are no voting trusts, shareholder agreements, commitments, undertakings, understandings, proxies or other restrictions to which any Existing Stockholder or the 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 shares of capital stock of RK Holdings.

4.2.4 Except as disclosed on Schedule 4.2.4, all of the outstanding shares of capital stock of the Subsidiaries of RK Holdings are duly authorized, validly issued, fully paid and nonassessable and are owned, beneficially and of record, by RK Holdings free and clear of any Liens. Except as disclosed on Schedule 4.2.4, there are no (i) outstanding options obligating any of the Subsidiaries to issue or sell shares of capital stock of such Subsidiary or to grant, extend or enter into any such option or (ii) voting trusts, proxies or other commitments, understandings, restrictions or arrangements in favor of any person other than the Company with respect to the voting of, or the right to participate in dividends or other earnings on, any capital stock of the Subsidiaries.

4.2.5 The Company does not have an Investment in any Person other than Investments in (a) demand deposit or money market accounts, (b) cash equivalents (i.e., marketable obligations issued or guaranteed by the government of the United States that mature within 180 days of the acquisition thereof or money market funds that invest in securities similar to such United States government securities) and (c) Investments listed on Schedule 4.2.5.

4.3 Financial Statements, etc .

4.3.1 Financial Information . The Company has heretofore delivered to the Investors true and complete copies of each of the following (collectively, the “Financial Statements”):

(a) The audited combined balance sheets of the Company as of December 31, 1997 and 1998, and the combined statements of operations, of stockholders’ equity (deficiency), and of cash flow for the respective fiscal years ended December 31, 1997 and 1998, together with the notes thereto and reports thereon by Deloitte & Touche (the “Year End Financials”).

(b) The audited combined balance sheet of the Company as of June 30, 1999, and the related combined statements of operations, of stockholders’ equity (deficiency), and of cash flow for the six months then

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ended, together with the notes thereof and report thereon by Deloitte & Touche (the “Six Month Financials”).

(c) Monthly unaudited financial statements of the Company, consisting of a balance sheet and related statements of earnings and changes in retained earnings and cash flow, for each calendar month since December 31, 1998 through October 31, 1999 (the “Interim Financials” and together with the Year End Financials and the Six Month Financials, the “Financial Statements”).

(d) The pro forma financial information of the Company (the “Pro Formas”), included in the Offering Memorandum.

(e) The projected financial information of the Company (the “Projections”) included in the Offering Memorandum.

4.3.2 Character of Financial Information . Except as set forth on Schedule 4.3.2, the Financial Statements (including the notes thereto) were prepared in accordance with GAAP consistently applied throughout the periods specified therein. The Financial Statements are correct and complete and present fairly, in all material respects, the financial position and results of operations of the Company for the periods specified therein, and are consistent with books and records of the Company subject in the case of the Interim Financials to an absence of notes and normal year-end adjustments which will not in the aggregate be material. The Pro Formas were prepared in good faith and represent the effects of the referenced transactions on the Financial Statements covered thereby. The Projections were prepared in good faith, based on assumptions believed to be reasonable, and represent the Company’s best estimate as of the date hereof respecting the Company’s financial performance for the periods covered thereby.

4.4 Title to Assets . The Company has good and marketable title to or, in the case of property held under lease or other Contractual Obligation, a valid and Enforceable right to use, all of its properties, rights and assets, whether real or personal and whether tangible or intangible (collectively, the “Assets”), including without limitation all properties, rights and assets reflected in the Balance Sheet (except for Assets which have been sold or otherwise disposed of since the Balance Sheet Date as permitted under Section 4.12 hereof). The Assets are not subject to any Lien other than Liens described on Schedule 4.4. The tangible Assets are in good working order, operating condition and state of repair, ordinary wear and tear excepted. The Assets constitute all properties, rights and assets held for, used in or necessary for the conduct of the Business of the Company as currently conducted.

4.5 Compliance with Laws, etc . The operations of the Business as heretofore or currently conducted were not and are not in violation of, nor is the Company in default or

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violation under, any Legal Requirement, except for such violations or defaults as have not had and will not have in the aggregate a Material Adverse Effect. To the Knowledge of the Company, all future expenditures with respect to the operations of its Business as currently conducted that are required to meet the provisions of any Legal Requirement currently in effect (or, to the Knowledge of the Company, enacted but to take effect in future) will not in the aggregate have a Material Adverse Effect. The Company has been duly granted all licenses, permits, franchises and other authorizations under any Legal Requirement necessary for the conduct of the Business as currently conducted or currently proposed to be conducted, except licenses, permits, franchises and other authorizations the failure of which to have been obtained has not had and will not have in the aggregate a Material Adverse Effect.

4.6 Non-Contravention, etc . Neither the execution and delivery of this Agreement nor the consummation by the Company of any of the transactions contemplated hereby does or will constitute, result in or give rise to (a) a breach of or a default or violation under any provision of the Charter or By-laws of the Company or (b), except as set forth on Schedule 4.6, (i) a breach or violation under any provision of any Contractual Obligation of the Company, (ii) the acceleration of the time for performance of any obligation under any such Contractual Obligation, (iii) the imposition of any Lien upon or the forfeiture of any Asset (including, without limitation, any Asset held under a lease or license), (iv) a requirement that any consent under, or waiver of, any such Contractual Obligations, Charter or By-law provision be obtained or (v) any severance payments, right of termination, modification of terms, or any other right or cause of action under any such Contractual Obligation or Charter or By-law provision, except in the case of clause (b)(i) above where such breaches, defaults, events or violation would not have a Material Adverse Effect.

4.7 Real Property .

4.7.1 Schedule 4.7.1 sets forth a list of the addresses of each location at which any equipment or inventory is located or where the Company has an office or other place of business.

4.7.2 The Company does not and has never owned any real property. Schedule 4.7.2 lists all contracts for the lease or sublease of real property by the Company currently in effect (the “Leases”). The Company has delivered to the Investor correct and complete copies of the Leases (as amended to date). To the best of the Company’s Knowledge, with respect to each Lease:

(a) the Lease is legal, valid binding, enforceable, and in full force and effect;

(b) the Lease will continue to be legal, valid, binding, enforceable, and in full force and effect on identical terms following the consummation of the transactions contemplated hereby;

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(c) the Company is not, and, to the Company’s Knowledge, no other party to the lease or sublease is in material breach or default, and no event has occurred 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 Company to exercise and obtain the benefit of any options contained in such Lease;

(d) there are no disputes, oral agreements, or forbearance programs in effect as to the Lease;

(e) with respect to each Lease that is a sublease, the representations and warranties set forth in subsections (a) through (d) above are true and correct are true and correct with respect to the underlying Lease;

(f) the Company has not assigned, transferred, conveyed, mortgaged, deeded in trust, or encumbered any interest in the Lease; or

(g) 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.

4.8 Litigation, etc . Except as set forth on Schedule 4.8, there is no litigation, at law or in equity, or any proceeding before or investigation by any Governmental Authority pending (or, to the Knowledge of the Company, threatened) against the Company, or any basis therefor, except for such potential litigation or proceedings which have not had and will not have in the aggregate a Material Adverse Effect. There is no litigation at law or in equity, or any proceeding before, or investigation by, any Governmental Authority, pending (or, to the Knowledge of the Company, threatened) against the Company, or any basis therefor, which seeks rescission of, seeks to enjoin the consummation of, or otherwise relates to, this Agreement or any of the transactions contemplated hereby. No judgment, decree or order of any Governmental Authority (a) has been, to the Company’s knowledge, issued against any Person (other than the Company) which has had or will have a Material Adverse Effect or (b) has been issued against the Company.

4.9 Intellectual Property Rights . For purposes of this Agreement, “Intangibles” shall mean: all trade and product names; foreign letters patent, patents, patent applications, and unpatented proprietary developmental records; trademarks, service marks, logos and copyrights (including registrations and applications); trade secrets, know-how and other proprietary or confidential information; computer software; and other intangible property and rights that are directly or indirectly owned, licensed or otherwise used by the Company. Schedule 4.9 lists all

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significant Intangibles owned or used by the Company. Except as set forth on Schedule 4.9, the Company owns or has the valid right to use all Intangibles used in or necessary for the conduct of its Business as presently conducted free and clear of all liens, licenses or encumbrances of any kind. The Company has never received any charge, complaint, claim, demand, or notice alleging any interference, infringement, misappropriation, or violation, including any claim that the Company must license or refrain from using any Intangibles. The use by the Company of the Intangibles does not infringe or misappropriate and has not infringed or misappropriated any rights of any third party, and, to the Company’s Knowledge, no activity, except as set forth on Schedule 4.9 hereto, of any third party infringes upon or misappropriates the rights of the Company with respect to any of the Intangibles. The Company does not own any patents, and has no pending patent applications, relating to the Business. Except as set forth on Schedule 4.9 hereto, no other Person has any ownership of or right to use the Intangibles (except such right to use such Intangibles as would not have a Material Adverse Effect) or has notified the Company in writing that it is claiming any ownership of or right to use any Intangibles.

4.10 Contracts, etc .

4.10.1 Certain Contractual Obligations . Set forth on Schedule 4.10.1 hereto is a true and complete list of all of the following Contractual Obligations of the Company:

(a) All 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 (or any spouse or family member of any such current or former officer or employee) of the Company.

(b) All Contractual Obligations under which the Company is or may become obligated to pay any legal, accounting, brokerage, finder’s or similar fees or expenses 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.

(c) All Contractual Obligations (including, without limitation, options) to sell or otherwise dispose of any Assets other than in the Ordinary Course of Business.

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(d) All Contractual Obligations under which the Company has or will after the Closing have any liability or obligation to or for the benefit of any Existing Stockholder or any other Affiliate of the Company.

(e) All Contractual Obligations under which the Company has any liability or obligation for Debt or constituting or giving rise to a Guarantee of any liability or obligation of any Person, or under which any Person has any liability or obligation constituting or giving rise to a Guarantee of any liability or obligation of the Company (including, without limitation, partnership and joint venture agreements).

(f) All Contractual Obligations, other than this Agreement, under which the Company is or may become obligated to pay any amount in respect of deferred or conditional purchase price, indemnification obligations, purchase price adjustment or otherwise in connection with any (i) acquisition or disposition of assets or securities, (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).

(g) All Contractual Obligations for the sale of products or provision of services by the Company that (i) individually involve products or services having a value of at least $100,000, (ii) have a term extending more than one year after the Closing Date, (iii) to which the United States federal government or any state, local or foreign government or any agency or department of any of the foregoing is a party, or (iv) that renders the Company a subcontractor at any tier to any prime Contractual Obligation to which the United States federal government or any state, local or foreign government or any agency or department of any of the foregoing is a party.

(h) All purchase obligations (whether or not in the Ordinary Course of Business), which require minimum purchases by the Company.

(i) All advertising contracts.

(j) All standard forms of purchase orders and sales orders.

(k) All leases or other Contractual Obligations (including all amendments) under which any real property or other tangible asset is held or used by the Company.

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(l) All leases or other Contractual Obligations under which the Company is liable as lessor with respect to any real property or other tangible asset.

(m) All licenses or other Contractual Obligations (including all amendments) under which any Intangible is held or used by the Company.

(n) All licenses or other Contractual Obligations under which the Company is liable as licensor with respect to any Intangibles.

(o) All Contractual Obligations under which the Company is or may be 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.

(p) All Contractual Obligations (other than purchase orders or sales orders) not required to be listed on Schedule 4.10.1 pursuant to clauses (a) through (n) above which individually involve liabilities of the Company in excess of $100,000.

The Company has heretofore delivered to the Investors a true and complete copy of each of the Contractual Obligations, or a narrative description of those Contractual Obligations that are not in writing, listed on Schedule 4.10.1 hereto, each as in effect on the date hereof and as it will be in effect at the Closing, including, without limitation, all amendments thereto.

4.10.2 Nature of Contracts, etc . Each Contractual Obligation to which the Company is a party is, and after giving effect to the Closing hereunder and the consummation of the transactions contemplated hereby will be, Enforceable by the Company except for such failures to be so Enforceable as have not had and will not have in the aggregate a Material Adverse Effect. No breach or default by the Company under any Contractual Obligation to which it is a party has occurred and is continuing, and no event has occurred which with notice or lapse of time would constitute such a breach or default or permit termination, modification or acceleration by any other Person under any of such contracts, other than such breaches, defaults and events as have not had and will not have in the aggregate a Material Adverse Effect. No breach or default by the Company under any Contractual Obligation or Legal Requirement to which it is a party or by which it or any of its property is bound or affected with respect to any Government Order. To the Knowledge of the Company, except as set forth on Schedule 4.10.2 hereto, no breach or default by any other Person under any of the foregoing has occurred and is continuing, and no event has occurred which with notice or lapse of time would constitute such a breach or default or permit termination, modification or

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acceleration by the Company under any of the foregoing, other than breaches, defaults and events which have not had and will not have in the aggregate a Material Adverse Effect.

4.11 Liabilities . The Company does not have any liabilities or other obligations, whether absolute, accrued, contingent, due, to become due, or otherwise, other than: (a) obligations and liabilities of the Company set forth on the Balance Sheet (or described specifically in the notes thereto); (b) obligations and liabilities of the Company incurred since the Balance Sheet Date in the Ordinary Course of Business; (c) obligations and liabilities of the Company in respect of Contractual Obligations; and (d) obligations and liabilities of the Company that either individually or in the aggregate will not exceed $25,000.

4.12 Change in Condition . From and after the Balance Sheet Date to and including the date hereof, the Company has conducted its Business only in the Ordinary Course of Business and has maintained the value of its Business as a going concern and, except as set forth on Schedule 4.12, its relationships with customers, distributors, suppliers, vendors, employees, agents and others. Without limiting the generality of the foregoing, except as set forth on Schedule 4.12, which matters have not had and will not have in the aggregate a Material Adverse Effect, since the Balance Sheet Date the Company has not:

(a) Entered into any transaction otherwise than on an arms’ length basis or any transaction with any Existing Stockholder or any Affiliate thereof (other than the Raymond Redemption Agreement and the Connolly Redemption Agreement);

(b) Made any capital expenditure in excess of $100,000 individually or $500,000 in the aggregate;

(c) Incurred or otherwise become liable in respect of any Debt, except for borrowings in the Ordinary Course of Business under the Company’s Loan and Security Agreement with Heller Financial, Inc., or become liable in respect of any Guarantee;

(d) Created or suffered the imposition of any Lien upon any assets, whether tangible or intangible, of the Company;

(e) (i) Sold, leased to others or otherwise disposed of any of its assets, (ii) entered into any Contractual Obligation relating to (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

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Business), (iv) waived or released any right of substantial value or (v) instituted, settled or agreed to settle any material Action;

(f) (i) Made any changes in the rate of Compensation of any director, officer, employee, or consultant to, or agent of the Company, except for changes in the Ordinary Course of Business to the compensation of Persons other than directors and officers of the Company, or (ii) paid or agreed to pay any extra Compensation to any such Person (including, without limitation, any such payments to be made in connection with and/or from the proceeds of the transactions contemplated hereby);

(g) Submitted any material bids or proposals to any third party with respect to the Business, or entered into any material contracts, commitments or agreements;

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

(i) Made any change in its customary methods of accounting or accounting practices, pricing policies or payment or credit practices, or failed to pay any creditor any amount owed to such creditor when due, or granted any extensions of credit other than in the Ordinary Course of Business (it being understood that the consummation of the Reorganization required the Company to change from a cash method to an accrual method of accounting for income tax purposes);

(j) Made any Distributions;

(k) Entered into any Contractual Obligation to do any of the things referred to in clauses (a) through (i) above; and

(l) Suffered or incurred any Material Adverse Effect, nor any event or events which in the aggregate will have a Material Adverse Effect.

4.13 Insurance . Set forth on Schedule 4.13(a) is a list of all liability (including, without limitation, public liability, products liability and automobile liability), workers’ compensation, property, casualty, directors and officers, errors and omissions and other policies by which the Company has been insured since December 31, 1997 and, in the case of liability policies, since December 31, 1995 (the “Insurance Policies”), true and complete copies of which have been furnished to the Investors. Such list includes the type of policy, form of coverage, policy number and insurer, coverage dates, named insured, limit of liability and deductible. Except for the

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matters set forth on the loss runs annexed to Schedule 4.13(b) and the matters set forth on Schedule 4.13(b), there have been no liability claims which have been made against the Company or, to the Knowledge of the Company, any occurrence which may give rise to any such claim against the Company.

4.14 Transactions with Affiliates . All of the Existing Stockholders are officers, directors or employees of the Company. Except as set forth on Schedule 4.14(a) (together with the Existing Stockholders relationships described in the preceding sentence, the “Affiliate Relationships”), none of the Affiliates of Existing Stockholders (other than the Company) or of the Company is an officer, director, employee, consultant, competitor, customer, distributor, supplier or vendor of the Company. During the two-year period ending on the Closing Date, (a) the terms of the Affiliate Relationships have not been altered in any respect which has had or will have in the aggregate a Material Adverse Effect, and (b) except as set forth on Schedule 4.14(b), there have been no transactions between the Company, on the one hand, and any Existing Stockholder or any Affiliate thereof, on the other hand, other than the Affiliate Relationships and other relationships, Contractual Obligations and transactions the termination or non-continuation of which has not had and will not have in the aggregate a Material Adverse Effect. Except as set forth on Schedule 4.14(c), all transactions between the Company on the one hand, and the Existing Stockholders or any Affiliate thereof on the other hand, which occurred during the periods covered by the Financial Statements are reflected in the Financial Statements at amounts which do not overstate the net worth or net income of the Company as compared with fair market values and prices which would have been charged and paid between parties at arms’ length at the time of the entering into of the transactions in question.

4.15 Tax Matters . Except as set forth on Schedule 4.15:

4.15.1 all Tax Returns that are required to have been filed by or with respect to the Company have been duly and timely filed in accordance with all applicable Legal Requirements and such Tax Returns are true, correct and complete, and no claim has been made by any taxing authority in a jurisdiction where the Company does not file Tax Returns that the Company is or may be subject to taxation by that jurisdiction,

4.15.2 all Taxes due and payable (whether or not shown on any Tax Return) in respect of the Company have been paid in full,

4.15.3 the liability of the Company for Taxes (a) did not, as of the date of the most recent financial statements, exceed the accruals for Taxes (excluding any reserve established to reflect timing differences between book and Tax income) set forth on the face of the Balance Sheet (rather than in any notes thereto), and (b) will not, as of the Closing Date, exceed the accruals for Taxes liability (excluding any reserve established to reflect timing differences between book and

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Tax income) set forth on the face of the Balance Sheet (rather than in any notes thereto),

4.15.4 except as set forth on Schedule 4.15.4, no Tax Return referred to in Section 4.15.1 has been the subject of examination or audit by the Internal Revenue Service (“IRS”) or the appropriate state, local or foreign taxing authority,

4.15.5 no deficiencies have been asserted or assessments made as a result of any examinations of the Tax Returns referred to in Section 4.15.1 by the IRS and/or a state, local or foreign taxing authority,

4.15.6 there is no action, suit, proceeding, audit, claim, deficiency or assessment pending (or, to the Knowledge of the Company, threatened) with respect to any Taxes of the Company, and there are no Liens on or other security interests in any of the assets of the Company that arose in connection with any failure (or alleged failure) to pay any Tax other than for current Taxes not yet due and payable,

4.15.7 no waivers of statutes of limitations have been given or requested by or with respect to any Taxes of the Company,

4.15.8 no powers of attorney with respect to Taxes of the Company are currently in force,

4.15.9 the Company does not have any equity interest in another entity that is classified for tax purposes as a corporation or partnership,

4.15.10 the Company has not made nor is obligated nor is a party to an agreement that could obligate it to make any compensation-related payments that would not be deductible by reason of Code sections 162, 280G or 404,

4.15.11 the Company does not have any liability for the Taxes of any Person under Treas. Reg. (S) 1.1502-6 (and/or any similar provision of state, local, or foreign law), as a transferee or successor, by contract, or otherwise, or is a party to or bound by any Contractual Obligation relating to any allocation or sharing of Taxes,

4.15.12 the Company has provided to the Investors true, complete, and correct copies of all Tax Returns filed by it with taxing authorities since December 31, 1997 and all requests for extensions or waivers and notices or claims given or received with respect thereto,

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4.15.13 the Company has withheld and paid to the IRS or the appropriate state, local or foreign taxing authority all amounts required to be withheld from the wages of the employees, independent contractors, creditors, stockholders or other third parties of the Company under state law, foreign law and the applicable provisions of the Code,

4.15.1