Scan-Optics, LLC announces acquisition by Patriarch Partners, LLC

Fiber Optics Weekly Update, August 19, 2005

Scan-Optics, LLC announced that Patriarch Partners, LLC has acquired substantially all of the assets, liabilities, and employees of Scan-Optics Inc., including its U.K. and Canada subsidiaries, and intends to continue to operate the company going forward as a privately held company, Scan-Optics LLC.

Upon the completion of this acquisition, Scan-Optics LLC signed a new credit agreement with Patriarch Partners Agency Services LLC, which will make available to the company a new revolving credit facility that will provide the necessary resources to allow the company to execute its business plans.

"We believe that Scan-Optics' deep history and strong reputation for delivering quality and innovative products, positions well the Company for a bright future that allows them to offer continued value to the marketplace," stated Lynn Tilton, Chief Executive Officer and Principal at Patriarch Partners.

In order to achieve improved operational efficiencies, Scan-Optics LLC also announced the outsourcing of its manufacturing operations. Going forward, its core product assembly will be performed by Columbia Tech, based in Worcester, Massachusetts, a subsidiary of Coghlin Companies Inc. Columbia Tech is a privately owned and operated business that provides custom manufacturing services to a wide array of industries.

"Our partnership with Columbia Tech changes a significant fixed cost into a variable cost that more accurately corresponds to our order schedules. The Columbia Tech partnership also reduces our overall cost associated with assembling core products and provides us with greater bandwidth to handle large orders," stated Paul M. Yantus, Chief Executive Officer of Scan-Optics, LLC.

Scan-Optics LLC, in a separate transaction, also sold its contract manufacturing division to CMD Technologies Inc., a newly formed Connecticut corporation, located in Manchester, Connecticut. CMD Technologies is led by Scan-Optics' former head of manufacturing, Joseph P. Crouch. CMD Technologies will continue to provide custom manufacturing services to former customers of Scan-Optics Inc.

In discussing the transition, Mr. Yantus stated, "Scan-Optics, LLC remains committed to the mission of producing high quality--low cost document management solutions that create value for our customers. We will carry forward the tradition of applying people, process, and technologies that assist our customers in converting information into knowledge. I look forward to leading the Company over the coming years."

Patriarch Partners LLC ("Patriarch") is an investment fund based in New York and in Charlotte, North Carolina. Patriarch provides portfolio management services to 8 leveraged funds and a private equity fund, which funds own and manage a diverse portfolio of international companies and credit facilities with an aggregate asset value of approximately $4.5 billion including equity ownership positions (majority and minority) in more than 60 companies.