AGREEMENT AND PLAN OF MERGER

This AGREEMENT AND PLAN OF MERGER , dated as of May 23, 2008 (this “ Agreement ”), is entered into by and among IEC Electronics Corp., a corporation organized under the laws of the State of Delaware (“ Parent ”), VUT Merger Corp., a corporation organized under the laws of the State of New York (“ Merger Sub ”), Val-U-Tech Corp., a corporation organized under the laws of the State of New York (“ Company ”) and Kathleen Brudek, Michael Brudek and Nicholas Vaseliv (each, a “ Company Shareholder ” and, together, the “ Company Shareholders ”) (“Parent,” “Merger Sub”, “Company” and the “Company Shareholders” individually hereinafter referred to as “ Party ” and collectively hereinafter referred to as the “ Parties ”);

WHEREAS , Merger Sub, upon the terms and subject to the conditions of this Agreement and in accordance with the New York Business Corporation Law (“ NYBCL ”), will merge with and into Company (the “ Merger ”);

WHEREAS , the board of directors of Company has (i) determined that the Merger is advisable and fair to the holders of Company Common Stock (as defined in Section 3.04) and is in the best interests of such shareholders, (ii) advised, authorized, approved and adopted this Agreement and the transactions contemplated hereby and (iii) recommended approval and adoption of this Agreement by the shareholders of Company (the “ Company Shareholders ”);

WHEREAS , Company Shareholders have advised, authorized, approved and adopted this Agreement and the transactions contemplated hereby; and

WHEREAS , the Board of Directors of Parent has determined that the Merger is advisable and in the best interests of Parent and its shareholders and the boards of directors of Parent and Merger Sub and the sole shareholder of Merger Sub have advised, authorized, approved and adopted this Agreement and the transactions contemplated hereby.

NOW, THEREFORE , in consideration of the foregoing and the respective representations, warranties, covenants and agreements set forth in this Agreement, and intending to be legally bound hereby, the Parties agree as follows.

SECTION 1.01 The Merger

Upon the terms and subject to the conditions set forth in this Agreement, and in accordance with the NYBCL, at the Effective Time (as defined in Section 1.02) Merger Sub shall be merged with and into Company, with Company being the surviving corporation (hereinafter sometimes called “ Surviving Corporation ”) in the Merger. Upon consummation of the Merger, the separate corporate existence of Merger Sub shall cease, and Surviving Corporation shall continue to exist as a New York corporation.

SECTION 1.02 Closing Date; Effective Time

(a)   Subject to the terms and conditions of this Agreement, including the satisfaction or, if permissible, waiver of the conditions set forth in Article VII of this Agreement, the closing of the Merger (the “ Closing ” and the date of such Closing, the “ Closing Date ”) will take place on May 29, 2008, at 10:00 a.m. local time at the offices of Boylan, Brown, Code, Vigdor & Wilson, LLP, 2400 Chase Square, Rochester, New York, unless another date or place is agreed to in writing by the Parties

(b)   The Parties shall cause the Merger to be consummated on the Closing Date by filing the Certificate of Merger, in the form attached hereto as Exhibit A (the “ Certificate of Merger ”) and any other appropriate documents with the New York Department of State, in such form as required by, and executed in accordance with the relevant provisions of, the NYBCL (the date and time of such filing being the “ Effective Time ”).

SECTION 1.03 Effect of the Merger

At the Effective Time, the effect of the Merger shall be as provided in the applicable provisions of the NYBCL. Without limiting the generality of the foregoing, and subject thereto, at the Effective Time, all the property, rights, privileges, powers and franchises of Company and Merger Sub shall vest in Surviving Corporation, and all debts, liabilities and duties of Company and Merger Sub shall become the debts, liabilities and duties of Surviving Corporation.

SECTION 1.04 Certificate of Incorporation; Bylaws

(a)   Unless otherwise determined by Parent prior to the Effective Time, at the Effective Time, the certificate of incorporation of Company shall be the certificate of incorporation of Surviving Corporation until thereafter amended as provided by Law and such certificate of incorporation, except that Company’s certificate of incorporation shall be amended and restated at the Effective Time to have the same form and substance as the certificate of incorporation of Merger Sub except that the name of the Surviving Corporation shall be Val-U-Tech Corp.

(b)   Unless otherwise determined by Parent prior to the Effective Time, at the Effective Time, the bylaws of Merger Sub shall continue unchanged and shall be the bylaws of Surviving Corporation until thereafter amended as provided by Law, the certificate of incorporation of Surviving Corporation and such bylaws.

SECTION 1.05 Directors and Officers

At the Effective Time, the initial officers and directors of Surviving Corporation shall be the persons listed on Exhibit B , each to hold office in accordance with the certificate of incorporation and bylaws of Surviving Corporation, in each case until their respective successors are duly elected or appointed and qualified.

SECTION 1.06 Classes and Series

SECTION 2.01 The Merger

At the Effective Time, by virtue of the Merger and without any action on the part of Parent, Merger Sub, Company or the holders of any of the securities referred to in this Section 2.01:

(a)   Common Stock .

(i)   Subject to Section 2.01(a)(ii), each share of Company Common Stock (excluding any shares described in Section 2.01(b)) issued and outstanding immediately prior to the Effective Time shall cease to be outstanding and shall be converted into and exchanged for the right to receive the same proportion of (a) (1) Five Million Five Hundred Thousand Dollars (US$5,500,000) (the “ Cash Purchase Price ”), (2) Five Hundred Thousand (500,000) shares of common stock, par value $0.01, of Parent, (“ Parent Common Stock ”), and (3) "Purchase Notes" (as that term is hereinafter defined) that is (b) in the same as proportion as such share of Company Common Stock is of all shares of Company Common Stock outstanding on the Closing Date. The Purchase Notes shall be in the form of Exhibit 2.01(a)(i) (hereinafter collectively referred to as "Purchase Notes" and individually referred to as "Purchase Note") and shall be in an aggregate principal amount equal to (x) 4,500,000, less (y) $1,050,000, (c) subject to adjustment as provided herein. The shares of Parent Common Stock issuable to the holders of Company Common Stock pursuant hereto, the Cash Purchase Price and the Purchase Notes, together with the amount of cash in lieu of fractional shares of Parent Common Stock payable pursuant to Section 2.01(e), are sometimes referred to herein, collectively, as the “ Merger Consideration ”. All such shares of Company Common Stock shall cease to be outstanding and shall automatically be canceled and retired and shall cease to exist, and each certificate previously evidencing any such shares shall thereafter represent only the right to receive the Merger Consideration. Except as otherwise provided herein or by applicable law, the holders of certificates previously evidencing such shares of Company Common Stock outstanding immediately prior to the Effective Time shall cease to have any rights with respect to such shares of Company Common Stock. Each such certificate previously evidencing such shares of Company Common Stock shall be exchanged for the Merger Consideration applicable thereto.

(ii)   The Purchase Price and the Purchase Notes shall be increased or decreased, as the case may be, in accordance with the following

(a)   The Purchase Price and the Purchase Notes will be increased by one-half of the amount by which, as of the Closing Date, the following are greater than, or decreased by one-half of the amount by which the following are less than (as the case may be), the amounts shown on the Balance Sheet of the Company as of December 31, 2007 as audited by Rotenberg & Co. attached to this Agreement as Exhibit 2.01(a)(ii) (the “ Company Balance Sheet ”):

i.   cash and cash equivalents;  

ii.   net inventory, which shall not include any inventory that is (x) more than one (1) year old, (y) damaged or (z) not useable or saleable in the ordinary course of the Company’s business within one (1) year after the Closing Date; and

iii.   accounts receivable, which shall not include any account receivable as to which the Company has received any notice of dispute, whether verbal or written, or which is more than ninety (90) days old as of the Closing Date;

(b)   The Purchase Price and the Purchase Notes will be decreased by one-half of the amount by which, as of the Closing Date, the following are greater than, or increased by one-half of the amount by which the following are less than (as the case may be), the amounts shown on the Company Balance Sheet:

i.   accounts payable;

ii.   accrued payroll and vacation; and

iii.   other current liabilities.

(c)   The Purchase Price and the Purchase Notes will be decreased by the amount of any liabilities as of the Closing Date that are not shown on the Company Balance Sheet.

(iii)   The Purchase Price and the Purchase Notes shall be increased by one-half of the amount by which the Company’s revenues from sales of its products and services in the ordinary course of its business for the calendar year 2008 (determined in accordance with Subsection 2.01(a)(vii)) exceed $18,000,000.

(iv)   The Purchase Price and the Purchase Notes shall be decreased (but not by more than the amount of the Purchase Notes, after adjustment as provided elsewhere in this Agreement) by the amount, if any, by which the Company’s revenues from sales of its products and services in the ordinary course of its business for the calendar year 2008 (determined in accordance with Subsection 2.01(a) (vii)) are less than $14,000,000.

(v)   If sales by the Company to Harris Corporation of products and services for the calendar year 2009 are less than $5,500,000, then the Purchase Price and the Purchase Notes shall be reduced by one-half of (a) $5,500,000 less sales of products and services to Harris Corporation during the calendar year 2009, less (b) the amount, if any, by which all of the Company’s revenues from sales of its products and services in the ordinary course of its business for the calendar year 2009 (excluding the amount of its sales to Harris Corporation, ASML, ViaSat and Telephonics) exceed $7,100,000.

As an example of the application of the foregoing formula, assume:

(y) the Company’ total sales for the calendar year 2009 (other than sales to Harris Corporation, ASML, ViaSat and Telephonics) are $8,100,000

Applying the foregoing, the Purchase Price and the Purchase Notes will be reduced by one-half of

(xx) $1,500,000 (the excess of $5,500,000 over $4,000,000) less

(yy) $1,000,000 (the excess of $8,100,000 over $7,100,000)

The reduction in the Purchase Price and the Purchase Notes will be ½ x ($1,500,000 - $1,000,000), or $250,000.

(vi)   Promptly, but in no event more than forty-five (45) days, after the Closing Date, the Parent shall cause its regularly engaged firm of independent certified public accountants to conduct an audit the Company’s books and records as of the Closing Date, and shall cause them to prepare a balance sheet of the Company as of the Closing Date in accordance with GAAP (subject to the specific definitions contained in Subsection 2.01(a)(ii)). Such balance sheet, shall be used in determining the adjustments, if any, that the Parent believes to be required by subsection 2.01(a)(ii). Parent shall deliver a copy of such balance sheet together with a statement of the adjustments, if any, that the Parent believes should be made to the Purchase Price and the Purchase Notes to the Shareholder Representative (the “ Parent Notice ”), promptly after Parent has received such balance sheet from its accountants. Following the delivery of the Parent Notice to the Shareholder Representative, the Parent shall give and shall cause the Company to give the Shareholder Representative and its representatives reasonable access to all of the books and records of the Company, on reasonable notice and during normal business hours, for so long and so often as reasonably required by them, so that the Shareholder Representative can determine whether or not the balance sheet and the proposed adjustments as set forth in the Parent Notice are accurate. If the Shareholder Representative determines that the Parent Notice (and the adjustments indicated thereon) was inaccurate, it shall give notice (the “ Shareholder Notice ”) of such finding to the Parent no later than thirty (30) days after delivery to the Shareholder Representative of the Parent Notice. Such Shareholder Notice shall specify any items or amounts as to which the Shareholder Representative disagrees and a detailed statement of the basis of each of the Shareholder Representative’s objections. If no such Shareholder Notice is given in accordance with this Subsection 2.01(a)(vi), the Parent Notice (and the adjustments indicated thereon) shall be conclusive and binding upon the parties.

If a Shareholder Notice is given and the parties are unable to resolve any disagreements as to the adjustments required to the Purchase Price and the Purchase Notes within thirty (30) days after the Shareholder Notice has been given, the items or amounts in dispute shall be referred for resolution to the Independent Accountants. Promptly, but no later than 20 days after acceptance of the appointment as Independent Accountants, the Independent Accountants shall determine, based primarily on written submissions by Parent and the Shareholder Representative, which may be confirmed by independent review if the Independent Accountants deem such review to be necessary, only those issues in dispute and shall render a written report as to the resolution of the dispute and the resulting adjustments to the Purchase Price and the Purchase Notes, which shall be conclusive and binding on the parties. Parent shall permit the Independent Accountants to review the books and records of the Company that relate to the items in dispute, during normal business hours and upon reasonable notice. In resolving any disputed item, the Independent Accountants (x) shall be bound by the provisions of this Section 2.01 and (y) may not assign a value to any item greater than the greatest value for such items claimed by either party or less than the smallest value for such items claimed by either party. Parent and the Shareholders (in the aggregate) shall each be responsible for one-half (½) of the fees and expenses charged by the Independent Accountants for their services.

No later than the third (3rd) business day following the date of final determination of the adjustments, if any, required to the Purchase Notes in accordance with this Subsection 2.01(a)(vi), the Shareholder Representative shall deliver to the Parent the Purchase Notes delivered at the Closing and the Parent shall deliver to the Shareholder Representative replacement Purchase Notes, identical to the original Purchase Notes but adjusted as to principal amount as provided herein.

(vii)   In connection with the audit of the Parent’s financial statements for its fiscal year ended November 30, 2008, the Parent shall cause its auditors to determine and certify the Company’s revenues from sales of its products and services in the ordinary course of its business for the calendar year 2008, net of allowances, discounts, returns, shipping charges and similar costs, in accordance with GAAP, and shall deliver a copy of such determination to the Shareholder Representative. For purposes of making such determination, (A) except as provided in the immediately following subsection (B), all revenues from the performance of cable harness work from and after the Closing Date by either Parent or the Company shall be included in determining the sales of the Company, it being the intention of the Parties that all such work shall be performed by the Company and not by Parent from and after the Closing Date, and (B) notwithstanding the foregoing, no revenues from the performance of cable harness work by either Parent or the Company for ASML, ViaSat and Telephonics shall be included in determining the gross sales of the Company.

Parent shall deliver a copy of such auditor’s determination with a statement of the adjustments, if any, that the Parent believes should be made to the Purchase Price and the Purchase Notes pursuant to Subsection 2(a)(iv) to the Shareholder Representative (the “Second Parent Notice ”), promptly after Parent has received such determination from its accountants. Following the delivery of the Second Parent Notice to the Shareholder Representative, the Parent shall give and shall cause the Company to give the Shareholder Representative and its representatives reasonable access to such of the books and records of the Company, on reasonable notice and during normal business hours, for so long and so often as reasonably required by them, to the extent necessary to verify such determination and the proposed adjustments as set forth in the Second Parent Notice are accurate. If the Shareholder Representative determines that Second Parent Notice (and the adjustments indicated thereon) was inaccurate, it shall give notice (the “Second Shareholder Notice ”) of such finding to the Parent no later than thirty (30) days after delivery to the Shareholder Representative of the Second Parent Notice. Such Second Shareholder Notice shall specify any items or amounts as to which the Shareholder Representative disagrees and a detailed statement of the basis of each of the Shareholder Representative’s objections. If no such Second Shareholder Notice is given in accordance with this Subsection 2.01(a)(viii), the Second Parent Notice (and the adjustments indicated thereon) shall be conclusive and binding upon the parties.

If a Second Shareholder Notice is given and the parties are unable to resolve any disagreements as to the adjustments required to the Purchase Price and the Purchase Notes within thirty (30) days after the Second Shareholder Notice has been given, the items or amounts in dispute shall be referred for resolution to the Independent Accountants. Promptly, but no later than 20 days after acceptance of the appointment as Independent Accountants, the Independent Accountants shall determine, based primarily on written submissions by Parent and the Shareholder Representative, which may be confirmed by independent review if the Independent Accountants deem such review to be necessary, only those issues in dispute and shall render a written report as to the resolution of the dispute and the resulting adjustments to the Purchase Price and the Purchase Notes, which shall be conclusive and binding on the parties. Parent shall permit the Independent Accountants to review the books and records of the Company that relate to the items in dispute, during normal business hours and upon reasonable notice. In resolving any disputed item, the Independent Accountants (x) shall be bound by the provisions of this Section 2.01 and (y) may not assign a value to any item greater than the greatest value for such items claimed by either party or less than the smallest value for such items claimed by either party. Parent and the Shareholders (in the aggregate) shall each be responsible for one-half (½) of the fees and expenses charged by the Independent Accountants for their services.

No later than the third (3rd) business day following the date of final determination of the adjustments, if any, required to the Purchase Notes in accordance with this Subsection 2.01(a)(vii), the Shareholder Representative shall deliver to the Parent the Purchase Notes previously delivered to the Shareholders and the Parent shall deliver to the Shareholder Representative replacement Purchase Notes, identical to the original Purchase Notes but adjusted as to principal amount as provided herein.

(vii)   On or before January 31, 2010, the Parent shall deliver to the Shareholder Representative its calculation of any adjustments required to be made to the Purchase Price and the Purchase Notes pursuant to Subsection 2.01(a) (v) (the “Third Parent Notice ”). Following the delivery of the Third Parent Notice to the Shareholder Representative, the Parent shall give and shall cause the Company to give the Shareholder Representative and its representatives reasonable access to such of the books and records of the Company, on reasonable notice and during normal business hours, for so long and so often as reasonably required by them, to the extent necessary to verify such calculation and the data upon which it is based.. If the Shareholder Representative determines that Third Parent Notice (and the adjustments indicated thereon) was inaccurate, it shall give notice (the “Third Shareholder Notice ”) of such finding to the Parent no later than thirty (30) days after delivery to the Third Representative of the Third Parent Notice. Such Third Shareholder Notice shall specify any items or amounts as to which the Shareholder Representative disagrees and a detailed statement of the basis of each of the Shareholder Representative’s objections. If no such Third Shareholder Notice is given in accordance with this Subsection 2.01(a)(viii), the Third Parent Notice (and the adjustments indicated thereon) shall be conclusive and binding upon the parties.

If a Third Shareholder Notice is given and the parties are unable to resolve any disagreements as to the adjustments required to the Purchase Price and the Purchase Notes within thirty (30) days after the Third Shareholder Notice has been given, the items or amounts in dispute shall be referred for resolution to the Independent Accountants. Promptly, but no later than 20 days after acceptance of the appointment as Independent Accountants, the Independent Accountants shall determine, based primarily on written submissions by Parent and the Shareholder Representative, which may be confirmed by independent review if the Independent Accountants deem such review to be necessary, only those issues in dispute and shall render a written report as to the resolution of the dispute and the resulting adjustments to the Purchase Price and the Purchase Notes, which shall be conclusive and binding on the parties. Parent shall permit the Independent Accountants to review the books and records of the Company that relate to the items in dispute, during normal business hours and upon reasonable notice. In resolving any disputed item, the Independent Accountants (x) shall be bound by the provisions of this Section 2.01 and (y) may not assign a value to any item greater than the greatest value for such items claimed by either party or less than the smallest value for such items claimed by either party. Parent and the Shareholders (in the aggregate) shall each be responsible for one-half (½) of the fees and expenses charged by the Independent Accountants for their services.

No later than the third (3rd) business day following the date of final determination of the adjustments, if any, required to the Purchase Notes in accordance with this Subsection 2.01(a)(viii), the Shareholder Representative shall deliver to the Parent the Purchase Notes previously delivered to the Shareholders and the Parent shall deliver to the Shareholder Representative replacement Purchase Notes, identical to the original Purchase Notes but adjusted as to principal amount as provided herein.

(b)   Treasury Stock . All shares of capital stock of Company held in the treasury of Company immediately prior to the Effective Time shall be canceled and extinguished without any conversion thereof and no amount shall be delivered or deliverable in exchange therefor.

(c)   Merger Sub Stock . Each share of common stock, par value $.01 per share, of Merger Sub issued and outstanding immediately prior to the Effective Time (“ Merger Sub Stock ”) shall be converted into and exchanged for one (1) duly and validly issued, fully paid and non-assessable share of common stock of the Surviving Corporation.

(d)   No Fractional Shares . No certificate or scrip representing any fractional shares of Parent Common Stock shall be issued pursuant to Section 2.01(a), and other than the right to receive the cash payment pursuant to this Section 2.01(d) any such fractional interests shall not entitle the owner thereof to any rights as a security holder of Parent. Notwithstanding any other provision hereof, all holders of Company Common Stock otherwise entitled to receive fractional shares of Parent Common Stock pursuant to Section 2.01(a) shall be entitled to receive, in lieu thereof, cash (without interest) in an amount equal to the product of (i) such fractional part of a share of Parent Common Stock to which the holder of Company Common Stock would otherwise be entitled under Sections 2.01(a) multiplied by the Average Parent Trading Price as of the Closing Date. As promptly as possible after the determination of the amount of cash to be paid to holders of fractional interests, Parent shall forward payments to holders of such fractional interests subject to and in accordance with the terms hereof.

SECTION 2.02 Exchange of Certificates and Merger Consideration

(a)   Payment Procedures . At the Closing, upon surrender to Parent by each Company Shareholder of the certificate or certificates (each a “ Certificate ” and collectively, the “ Certificates ”) representing all of the shares of Company Common Stock owned by such Company Shareholder immediately prior to the Effective Time, together with any other documents required by Parent, Parent shall issue and deliver to each such Company Shareholder his, her or its pro rata share of the Merger Consideration, which shall consist of (i) a certificate for Parent Common Stock which shall be registered in the name of such Company Shareholder which shall bear legends as set forth on Exhibit 2.02(a), (ii) a Purchase Note payable to such Company Shareholder; and (iii) the Cash Purchase Price payable to such Company Shareholder, which together shall represent the entire Merger Consideration. Until surrendered in accordance with the provisions of this Section 2.02, each Certificate shall represent for all purposes only the right to receive the applicable consideration set forth in Section 2.01, without any interest thereon.

(b)   No Further Rights in Stock . All shares of Parent Common Stock issued upon the surrender for exchange of Certificates in accordance with the terms of Sections 2.01 and 2.02 (including any cash paid pursuant to this Article II) shall be deemed to have been issued (and paid) in full satisfaction of all rights pertaining to the shares of Company Common Stock theretofore represented by such Certificates, and there shall be no further registration of transfer on the stock transfer books of the Surviving Corporation of the shares of Company Common Stock represented by such Certificates which were outstanding immediately prior to the Effective Time. If, after the Effective Time, any such Certificates are presented to Parent or the Surviving Corporation for any reason, they shall be canceled and exchanged as provided in this Article II, except as otherwise provided by Law.

(c)   Withholding of Tax . Parent shall be entitled to deduct and withhold from the applicable amount of the Merger Consideration otherwise issuable to, and any cash payment in lieu of fractional shares otherwise payable pursuant to this Agreement to, any former holder of Company Common Stock such amounts as Parent (or any Affiliate thereof) is required to deduct and withhold with respect to the making of such payment under the Code, or any provision of state, local or foreign Tax Law. To the extent that amounts are so withheld by Parent (or any Affiliate thereof), such withheld amounts shall be treated for all purposes of this Agreement as having been paid to the former holder of Company Common Stock in respect of whom such deduction and withholding was made by Parent (or any Affiliate thereof).

(d)   Lost, Stolen or Destroyed Certificates . In the event any Certificate evidencing shares of Company Common Stock shall have been lost, stolen or destroyed, upon the making of an affidavit setting forth that fact by the Person claiming such lost, stolen or destroyed Certificate and, if required by Parent, the posting by such Person of a bond in such reasonable amount as Parent may direct as indemnity against any claim that may be made against Parent or the Surviving Corporation with respect to such Certificate, Parent shall pay to such Person the applicable Merger Consideration and any cash in lieu of fractional shares with respect to such lost, stolen or destroyed Certificate.

(e)   Distributions With Respect to Unexchanged Shares of Parent Common Stock . No dividends or other distributions declared or made after the Effective Time with respect to Parent Common Stock with a record date after the Effective Time shall be paid to the holder of any unsurrendered Certificate with respect to the shares of Parent Common Stock evidenced thereby until the holder of such Certificate shall properly surrender such Certificate in accordance with the requirements of Section 2.02(a). Subject to the effect of escheat, tax or other applicable Laws, following surrender of any such Certificate, there shall be paid to the holder of the Certificates evidencing whole shares of Parent Common Stock issued in exchange therefor, without interest, (i) promptly, the amount of dividends or other distributions with a record date after the Effective Time and theretofore paid with respect to such whole shares of Parent Common Stock, and (ii) at the appropriate payment date, the amount of dividends or other distributions, with a record date after the Effective Time but prior to surrender and a payment date occurring after surrender, payable with respect to such whole shares of Parent Common Stock.  

SECTION 2.03 Certain Adjustments

If between the date hereof and the Effective Time, the outstanding shares of Company Common Stock or of Parent Common Stock shall be changed into a different number of shares by reason of any reclassification, recapitalization, split-up, combination or exchange of shares, or any dividend payable in stock or other securities shall be declared thereon with a record date within such period, the Merger Consideration per share of Company Common Stock shall be adjusted accordingly to provide the same economic effect as contemplated by this Agreement prior to such reclassification, recapitalization, split-up, combination, exchange or dividend.

SECTION 2.04 Shareholders’ Representative

The Shareholder Representative shall, by virtue of the Merger, be appointed attorney-in-fact and authorized and empowered to act, for and on behalf of any or all of Company Shareholders (with full power of substitution in the premises), in connection with the provisions of Article IX as they relate to Company and Company Shareholders generally, and such other matters as are reasonably necessary for the consummation of the transactions contemplated hereby including, without limitation, (i) to compromise on their behalf with Parent any claims asserted thereunder, (ii) to execute and deliver on behalf of Company Shareholders any documents or agreements contemplated by or necessary or desirable in connection with this Agreement, (iii) to administer and resolve any disputes with respect to the computation of any adjustments to the Purchase Price and the Purchase Notes and (iv) to take such further actions including coordinating and administering post-closing matters related to the rights and obligations of Company Shareholders (including exchanges of the Purchase Notes) as are authorized in this Agreement (the above named representative, as well as any subsequent representative of Company Shareholders appointed by Company Shareholders being referred to herein as the “ Shareholders’ Representative ”). The Shareholders’ Representative shall not be liable to any Company Shareholder, Parent, the Surviving Corporation or their respective Affiliates or any other Person with respect to any action taken or omitted to be taken by the Shareholders’ Representative in his role as Shareholders’ Representative under or in connection with this Agreement unless such action or omission results from or arises out of fraud, gross negligence, willful misconduct or bad faith on the part of the Shareholders’ Representative. Parent, Merger Sub and the Surviving Corporation shall be entitled to rely on such appointment and treat such Shareholders’ Representative as the duly appointed attorney-in-fact of each Company Shareholder. Each Company Shareholder who votes in favor of the Merger pursuant to the terms hereof, by such vote and without any further action, and each Company Shareholder who receives Merger Consideration in connection with the Merger, by acceptance thereof and without any further action, confirms such appointment and authority.

Except as specifically set forth in this Agreement, Company and each of the Company Shareholders hereby jointly and severally represents, warrants to and agrees with Parent and Merger Sub as follows, in each case as of the date of this Agreement and as of the Closing Date:

SECTION 3.01 Organization and Qualification

Company is a corporation duly organized, validly existing and in good standing under the laws of the State of New York, and has the full and unrestricted corporate power and authority to own, operate and lease its Assets, to carry on its business as currently conducted, to execute and deliver this Agreement and to carry out the transactions contemplated hereby. Company is duly qualified to conduct business as a foreign corporation and is in good standing in the states, countries and territories listed in Schedule 3.01, which are the only jurisdictions where the nature of its business or the ownership, operation or leasing of its Assets makes such qualification necessary.

SECTION 3.02 No Subsidiaries; Other Interests

Company has no Subsidiaries. Company has no equity investment or other interest in, nor has Company made advances or loans to, any Person.

SECTION 3.03 Certificate of Incorporation and Bylaws

Company has furnished to Parent a true and complete copy of the certificate of incorporation of Company, as currently in effect on the date of this Agreement, and a true and correct copy of Company’s bylaws, as currently in effect on the date of this Agreement, in each case certified by the corporate secretary of Company. Company is not in violation of any of the provisions of its certificate of incorporation or bylaws.

SECTION 3.04 Capitalization

The authorized capital stock of Company consists of two hundred (200) shares of common stock, no par value per share, of which one hundred (100) shares of common stock (the “ Company Common Stock ”) are issued and outstanding, all of which are duly authorized, validly issued, fully paid and non-assessable except as provided in Section 630 of the NYBCL. No shares of common stock are held in the treasury of Company. Schedule 3.04 sets forth the names and addresses of all holders of record of Company Common Stock and the number and class of shares held by each such shareholder. No other shares of Company Common Stock have been reserved for any purpose. There are no outstanding securities convertible into or exchangeable for Company Common Stock, any other securities of any Company and no outstanding options, rights (preemptive or otherwise), or warrants to purchase or to subscribe for any shares of such stock or other securities of Company. There are no outstanding Agreements affecting or relating to the voting, issuance, purchase, redemption, registration, repurchase or transfer of Company Common Stock or any other securities of Company. Each of the outstanding shares of Company Common Stock was issued in compliance with all applicable federal and state Laws concerning the issuance of securities. There are no obligations, contingent or otherwise, of Company to provide funds to, make any investment (in the form of a loan, capital contribution or otherwise) in, or provide any guarantee with respect to, any Person. There are no Agreements pursuant to which any Person (other than Company) is or may be entitled to receive any of the revenues or earnings, or any payment based thereon or calculated in accordance therewith, of Company.

SECTION 3.05 Authority; Binding Obligation

The execution and delivery by Company of this Agreement, the execution and delivery by Company of all other Agreements, documents, certificates or other instruments contemplated hereby, and the consummation by Company of the transactions contemplated hereby and thereby, have been duly authorized by all necessary corporate action, and no other corporate proceedings on the part of Company are necessary to authorize this Agreement and the other Agreements, documents, certificates or other instruments contemplated hereby, or to consummate the transactions contemplated hereby and thereby. This Agreement has been duly executed and delivered by Company and the Company Shareholder and constitutes the legal, valid and binding obligation of Company and the Company Shareholder, enforceable against each of them in accordance with its terms, except as such enforceability may be subject to the effects of any applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or similar Laws affecting creditors’ rights generally and subject to the effects of general equitable principles (whether considered in a proceeding in equity or at law).

SECTION 3.06 No Conflict; Required Filings and Consents

(a)   The execution, delivery and performance by Company and the Company Shareholders of this Agreement and all other Agreements, documents, certificates or other instruments contemplated hereby, the fulfillment of and compliance with the respective terms and provisions hereof and thereof, and the consummation by Company and the Company Shareholders of the transactions contemplated hereby and thereby, do not and will not: (i) conflict with, or violate any provision of, the certificate of incorporation or bylaws of Company; (ii) conflict with or violate any Law applicable to Company, its Assets or the Company Shareholders; (iii) conflict with, result in any breach of, or constitute a default (or an event that with notice or lapse of time or both would become a default) or result in the termination or acceleration, or create in another Person, a put right, purchase obligation or similar right under any Agreement to which Company or the Company Shareholders is a party or by which any of them, or any of the Company’s Assets, may be bound; or (iv) result in or require the creation or imposition of, or result in the acceleration of, any indebtedness or any Encumbrance of any nature upon, or with respect to, Company or any of the Assets now owned or hereafter acquired by Company.

(b)   Except as set forth on Schedule 3.06, the execution, delivery and performance by Company and the Company Shareholders of this Agreement and all other Agreements, documents, certificates or other instruments contemplated hereby, the fulfillment of and compliance with the respective terms and provisions hereof and thereof, and the consummation by Company of the transactions contemplated hereby and thereby, do not and will not: (i) require any consent, approval, authorization or permit of, or filing with or notification to, any Person not party to this Agreement, except (A) the filing and recordation of the Certificate of Merger as required by the NYBCL and (B) where the failure to obtain any consent, approval, authorization or permit or to make any filing or notification otherwise required to be disclosed hereunder would not have a Company Material Adverse Effect; or (ii) result in or give rise to any penalty, forfeiture, Agreement termination, right of termination, amendment or cancellation, or restriction on business operations of Company that would have a Company Material Adverse Effect.

(c)   All returns, reports, statements and other documents required to be filed by Company with any Governmental Entity have been filed in a timely manner and complied with and are true, correct and complete in all material respects (and any related fees required to be paid have been paid in full). All material records of every type and nature relating to the business, operations or Assets of Company have been maintained in all material respects in accordance with good business practices and the rules of any Governmental Entity and are maintained at Company.

(d)   No Governmental Entity or any other Person has notified Company that such Governmental Entity or other Person intends to object to the transactions contemplated hereunder which shall include for this purpose any objection to the operations of the business of Company as part of Parent. Company is not aware of any fact or circumstance related to it that would reasonably be expected to (i) cause the filing of any objection to any application for any Governmental consent required hereunder, (ii) lead to any delay in processing such application or (iii) require any waiver of any Governmental rule, policy or other applicable law.

SECTION 3.07 Intellectual Property

(a)   Schedule 3.07 identifies each item of Intellectual Property (i) owned by Company, (ii) owned by any third party and used by Company pursuant to license, sublicense or other Agreement or (iii) otherwise used by Company and not otherwise generally used by Persons similarly situated (including, in each case, specification of whether each such item is owned, licensed or used by Company). In addition, Company has not licensed (as licensor), sublicensed (as sublicensor) or entered into any other agreement with respect to the use of any Intellectual Property.

(b)   Company either owns or has adequate rights to use all of the Intellectual Property that is necessary to, and currently used for, its business as now conducted or currently proposed to be conducted, and such Intellectual Property is free and clear of Encumbrances. Company has previously furnished to Parent evidence of either ownership by Company of or license rights to use its Intellectual Property.

(c)   There are no pending or, to Company’s knowledge, threatened claims against Company alleging that the conduct of its business infringes any Intellectual Property rights of others that would have a Company Material Adverse Effect. The business of Company as now conducted or proposed to be conducted does not infringe any third-party Intellectual Property rights.

(d)   To Company’s knowledge, no third party is infringing upon any of Company’s Intellectual Property, and Company has not notified any third party that it believes such third party is interfering with, infringing, or misappropriating any of Company’s Intellectual Property or engaging in any act of unfair competition. Company has the right to bring an action for the infringement of all of its Intellectual Property that is owned by Company.

(e)   Except as set forth in the next sentence, Company has taken all steps that are customary in its industry to protect Company’s rights in confidential information and trade secrets of Company or provided by any other Person to Company. Company does not require each employee, director, consultant or contractor to execute a confidentiality and non-disclosure agreement. The names of those of its present and former employees who have executed such agreements are listed on Schedule 3.07, and copies of such agreements have been provided to Parent.

(f)   To Company's Knowledge, the operation of the business of Company as it currently is conducted or currently proposed to be conducted by Company does not and will not and will not when conducted by Parent or the Surviving Corporation in substantially the same manner following the Closing, infringe or misappropriate any Intellectual Property right of any person, violate any right of any person (including any right to privacy or publicity), or constitute unfair competition or trade practices under the laws of any jurisdiction.

(g)   Neither this Agreement nor the transactions contemplated by this Agreement, will result in (i) either Parent or the Surviving Corporation granting to any third party any right to or with respect to any Intellectual Property right owned by, or licensed to, either of them, (ii) either Parent’s or the Surviving Corporation’s   being bound by, or subject to, any non-compete or other restriction on the operation or scope of their respective businesses, or (iii) either Parent’s or the Surviving Corporation’s   being obligated to pay any royalties or other amounts to any third party in excess of those payable by Parent or the Surviving Corporation, respectively, prior to the Closing.

SECTION 3.08 Financial Statements and Condition

(a)   Company has prepared (i) the balance sheets of Company as of the end of the fiscal year ending on December 31, 2005 and the statements of income, equity and changes in financial position for fiscal year, compiled by Davie, Kaplan, Chapman & Braverman, PC, (ii) the balance sheet of Company as of the end of the fiscal year ending on December 31, 2006 and the statements of income, equity and changes in financial position for such fiscal year, audited by Rotenberg & Co., (iii) the balance sheet of Company as of October 31, 2007 and the statements of income, equity and changes in financial position for the period of the fiscal year then ended, reviewed by Davie, Kaplan, Chapman & Braverman, PC, (iv) the balance sheet of Company as of the end of the fiscal year ending on December 31, 2007 and the statements of income, equity and changes in financial position for such fiscal year, audited by Rotenberg & Co., accompanied by the related report of Rotenberg & Co. dated April 18, 2008 ("Rotenberg Management Letter"), (iii) the unaudited balance sheet of the Company as of March 31, 2008, and the unaudited statements of income, Company’s equity and changes in financial position for the three-month period ended March 31, 2008 (collectively, the “ Company Financial Statements ”). A true and complete copy of Company Financial Statement has been delivered to Parent and is attached as Schedule 3.08.

(b)   Company Financial Statements, including, without limitation, the notes thereto, (i) have been prepared in accordance with the books and records of Company and (ii) present fairly the financial position of Company and its results of operations and cash flows in accordance with GAAP applied on a basis consistent with prior accounting periods, subject in the case of unaudited statements, to normal year-end adjustments.

(c)   Company does not expect any year-end audit adjustments for the current fiscal year ending December 31, 2008. To the knowledge of Company, there are no anticipated material charges or write-offs of a non-recurring nature for the fiscal year ending December 31, 2008.

(d)   Except as set forth in the Rotenberg Management Letter, Company maintains a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability; (iii) access to assets is permitted only in accordance with management’s general or specific authorization; and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences.

(e)   Schedule 3.08 lists all of the changes in the methods of accounting or accounting practices or policies of Company since its inception.

SECTION 3.09 Absence of Certain Developments

Since December 31, 2007:

(a)   the business of Company has been conducted in all material respects only in the Ordinary Course of Business;

(b)   Company has not become liable in respect of any guarantee nor has it incurred or otherwise become liable in respect of any debt, except for borrowings, letters of credit and bankers’ acceptances in the Ordinary Course of Business under credit facilities in existence on December 31, 2007;

(c)   Company has not mortgaged, pledged or subjected to any lien any of its property, business or assets, except for purchase money or similar security interests granted in connection with the purchase of equipment or supplies in the Ordinary Course of Business in an amount not exceeding $10,000 in the aggregate;

(d)   Company has not made any declaration, setting aside or payment of any dividend or other distribution with respect to, or repurchase of, any of its capital stock or other equity interests;

(e)   Company has not (i) acquired or leased from any other Person any material assets, or sold or leased to any other Person or otherwise disposed of any material assets (in each case except for assets acquired or sold in the Ordinary Course of Business in connection with goods and services provided to customers); (ii) entered into any contractual obligation relating to (A) the purchase or sale of any capital stock, partnership interest or other equity interest in any Person, (B) the purchase of assets constituting a business or (C) any merger, consolidation or other business combination; (iii) entered into or amended any lease of real property or material personal property (whether as lessor or lessee); (iv) canceled or compromised any debt or claim other than accounts receivable in the Ordinary Course of Business; (v) sold, transferred, licensed or otherwise disposed of any material intangible assets other than in the Ordinary Course of Business; (vi) waived or released any right of substantial value; (vii) instituted, settled or agreed to settle any material action; or (viii) entered into or consummated any transaction with any Affiliate;

(f)   there has been no loss, destruction or damage to any material item of property of Company, whether or not insured, which has had or could reasonably be expected to have a Company Material Adverse Effect;

(g)   other than in the Ordinary Course of Business and consistent with past practices, Company has not made any changes in the rate of compensation payable or paid, or agreed or orally promised to pay, conditionally or otherwise, any extra compensation, or severance or vacation pay, to any director, officer, employee, consultant or agent of Company;

(h)   there has been no material labor trouble (including any work slowdown, stoppage or strike) involving Company or any material change in any of its personnel or the terms and conditions of the employment of such personnel;

(i)   Company has not made any change in (x) its methods of accounting or accounting practices, except as required by GAAP, or (y) its 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 or credit other than in the Ordinary Course of Business;

(j)   Company has not made any loan, advance or capital contributions to, or any other investment in, any Person;

(k)   Company has not adopted or increased any benefits under any Plan in any material manner;

(l)   Company has not written up or written down any of its material Assets;

(m)   Company has not terminated or amended, or failed in any material respect to perform obligations or suffered the occurrence of any default under any material contractual obligation; and

(n)   Company has not entered into any contractual obligation to do any of the things referred to elsewhere in this Section 3.09.

SECTION 3.10 Absence of Undisclosed Liabilities

There are no material liabilities or obligations (whether absolute or contingent, matured or unmatured, known or unknown) of Company, including but not limited to liabilities for Taxes and that are not reflected, or reserved against, in the audited balance sheet of Company as of December 31, 2007, except for those that may have been incurred after December 31, 2007 in the Ordinary Course of Business or that are not material in amount either individually or collectively. Since December 31, 2007, Company has not incurred any material liabilities or obligations (whether absolute or contingent, matured or unmatured, known or unknown) other than in the Ordinary Course of Business. All bonuses and incentive compensation (including, without limitation, all compensation-related expenses) have been accrued on Company Financial Statements based on GAAP and consistent with past practices.

SECTION 3.11 Litigation; Disputes

(a)   Company has not received notice of, and there is no pending, or, to the knowledge of Company or the Company Shareholders, threatened, action, suit, claim, arbitration, proceeding or investigation against, affecting or involving Company or its business or Assets, or the transactions contemplated by this Agreement, at law or in equity, or before or by any domestic or foreign court, arbitrator or Governmental Entity. Company is not (i) operating under or subject to any order, award, writ, injunction, decree or judgment of any court, arbitrator or Governmental Entity or (ii) in default with respect to any order, award, writ, injunction, decree or judgment of any court, arbitrator or Governmental Entity.

(b)   Company has complied and is in compliance in all material respects with all Laws, awards, orders, judgments, decrees and injunctions applicable to Company and its business or Assets, including all federal, state and local Laws and orders pertaining to employment or labor, safety, health, zoning and other matters. Company has obtained and holds all permits, licenses and approvals (none of which has been materially modified or rescinded and all of which are in full force and effect) from all government authorities necessary in order to own, use and maintain its Assets and to conduct its business as presently conducted. None of such permits, licenses or approvals will be terminated or modified as a result of the consummation of the merger.

SECTION 3.12 Real Property

(a)   Schedule 3.12 lists each real property lease under which Company is the lessee or lessor. Company is the owner and holder of the leasehold estates purported to be granted to it by the leases listed in Schedule 3.12. Each such lease is in full force and effect and, to the knowledge of Company, constitutes a legal, valid and binding obligation of, and is legally enforceable in all material respects against, the respective parties thereto. Company has in all material respects performed all material obligations thereunder required to be performed by any of them to date. To the knowledge of Company and the Company Shareholders, no party is in default in any material respect under any of the foregoing, and there has not occurred any event which (whether with or without notice, lapse of time or the happening or occurrence of any other event) would constitute such a material default.

(b)   Company does not own or hold interests (other than leasehold interests) in any Real Property.

SECTION 3.13 Other Agreements; No Default

Schedules 3.12 and 3.13 list each Agreement to which Company is a party or by which Company, or any of its Assets, is bound, and which (i) involves expenditures or receipts by Company (other than contracts, commitments or Agreements which do not require payments or yield receipts of more than $10,000 in any twelve (12) month period or more than $25,000 in the aggregate); or (ii) contain covenants that limit the freedom of Company to engage in a line of business or to compete with any third party (Agreements listed pursuant to clauses (i) and (ii) above, collectively the “ Company Contracts ”). Each Company Contract is in full force and effect, constitutes a valid and binding obligation of and is legally enforceable in accordance with its terms against Company and, to the knowledge of Company and the Company Shareholders, all Company Contracts are valid, binding and enforceable obligations of the other parties thereto, except as such enforceability may be subject to the effects of any applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or similar Laws affecting creditors’ rights generally or subject to the effects of general equitable principles (whether considered in a proceeding in equity or at law). Company has complied with all of the provisions of such Company Contracts and is not in default thereunder, and there has not occurred any event which (whether with or without notice, lapse of time, or the happening or occurrence of any other event) would constitute such a default, and the execution of this Agreement by Company and its performance hereunder will not cause, or result in, a breach or default under any Company Contract. There has not been (A) any failure by Company or, to the knowledge of Company and the Company Shareholders, any other party to any such Company Contract to comply with all material provisions thereof, (B) any default by Company or, to the knowledge of Company and the Company Shareholders, any other party thereunder, or (C) to the knowledge of Company and the Company Shareholders (X) any threatened cancellation thereof or (Y) any outstanding dispute thereunder. Company is not a guarantor or otherwise liable for any liability or obligation (including indebtedness) of any other Person.

SECTION 3.14 Labor Relations

There are no collective bargaining or other labor union Agreements to which Company is a party. There are, and for the past two (2) years have been, no strikes, work stoppages, union organization efforts or lawsuits (other than grievance proceedings) pending or, to the knowledge of Company and the Company Shareholders, threatened or reasonably anticipated between Company and (a) any current or former employees of Company or (b) any union or other collective bargaining unit representing such employees. There is no unfair labor practice charge or complaint, or other proceeding, against the Company pending, or to the knowledge of the Company and the Company Shareholders, threatened before the National Labor Relations Board or any similar state or foreign agency. Company has complied and is in compliance with all Laws relating to employment, labor, or the workplace, including, without limitation, Laws relating to wages, hours, collective bargaining, safety and health, work authorization, equal employment opportunity, immigration, withholding, unemployment compensation, worker’s compensation, employee privacy and right to know, except where the failure so to comply would not have a Company Material Adverse Effect. Company has not incurred any liability under, and has complied in all respects with, the Worker Adjustment Retraining Notification Act and the regulations promulgated thereunder and does not reasonably expect to incur any such liability as a result of actions taken or not taken prior to the consummation of the transactions contemplated hereunder.

SECTION 3.15 Pension and Benefit Plans

(a)   Company has delivered to Parent prior to the execution of this Agreement true and complete copies of the plan documents, summary plan descriptions, summaries of material modification, all related trust agreements, insurance contracts, or other funding arrangements, all related service provider agreements, annual financial or actuarial valuation reports, the three most recent Forms 5500 or 5500C/R (with accompanying schedules), registration statements, and prospectuses for all pension, retirement, profit-sharing, deferred compensation, stock option (including accompanying form agreements), employee stock ownership, severance pay, vacation, bonus or other incentive plans, employment or change in control agreements, medical, vision, dental or other health plans, life insurance plans and other employee benefit plans or fringe benefit plans, programs, arrangements or Agreements, including, without limitation, all Company Benefit Plans. No Company Benefit Plan is or has been a multiemployer plan within the meaning of Section 3(37) of ERISA or has any withdrawal liability pursuant to ERISA Sections 4201 through 4225 with respect to any such multiemployer plan. Company has set forth in Schedule 3.15 (i) a list of all of Company Benefit Plans, (ii) a list of Company Benefit Plans that are Company Pension Plans, (iii) a list of Company Benefit Plans that are Company Stock Plans, and (iv) a list of the number of shares covered by, exercise prices for, and holders of, all stock options granted and available for grant under Company Stock Plans.

(b)   From their inception, all Company Benefit Plans have been and are in material compliance (in form and in operation) with the applicable terms of ERISA and the Code and any other applicable Laws, including the terms of such plans. All required reports, returns, and descriptions (including annual reports (Forms 5500), summary annual reports, and summary plan descriptions have been timely filed and/or distributed in accordance with the applicable requirements of ERISA and the Code with respect to each Company Benefit Plan.

(c)   All liabilities (contingent or otherwise) under any Company Benefit Plan are fully accrued or reserved against in Company Financial Statement in accordance with GAAP. Each Company Pension Plan that is subject to Title IV of ERISA or Section 412 of the Code satisfies the minimum funding standards (without regard to any waiver) provided for in Section 412 of the Code.

(d)   Company has no obligations for retiree health or other welfare benefits under any Company Benefit Plan or otherwise (other than continuation coverage to the extent required by Law), and there are no restrictions on the rights of Company to unilaterally amend or terminate any such Company Benefit Plan at any time without incurring any material liability thereunder.

(e)   Neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated hereby will (i) result in any payment (including, without limitation, severance, golden parachute or otherwise) becoming due to any person under any Company Benefit Plan or otherwise, (ii) increase any benefits otherwise payable under any Company Benefit Plan or (iii) result in any acceleration of the time of payment or vesting of any such benefits. No Company Benefit Plan, individually or collectively, provides for any payment by Company any employee or independent contractor that is not deductible under Section 162(a)(1) or 404 of the Code or that is an "excess parachute payment" pursuant to Section 280G of the Code.

(f)   Each Company Benefit Plan which is intended to be qualified under Section 401(a) of the Code and exempt from taxation under Section 501(a) of the Code has received a favorable determination letter from the IRS that it is so qualified and so exempt, the Company has delivered to Parent true and complete copies of all such determination letters, and no fact or event has occurred that could adversely affect such qualified or exempt status.

(g)   No Company Benefit Plan is a Voluntary Employees’ Beneficiary Association (“ VEBA ”) within the meaning of Section 501(c)(9) of the Code.

(h)   Company has made or reserved all contributions (including employer contributions and employee salary reduction contributions) and other payments and paid all premiums required to be made or paid for each Company Benefit Plan within the time periods prescribed by ERISA.

(i)   Company is not now or has ever been a “substantial employer” as defined in Section 4001(a)(2) of ERISA and no Company Benefit Plan has subjected or does subject the Company to any liability under ERISA Sections 4063 or 4064.

(j)     There have been no “prohibited transactions” (as such term is defined in ERISA Section 406 and Code Section 4975) with respect to any Company Benefit Plan. No fiduciary of any Company Benefit Plan has breached any of the responsibilities or obligations imposed upon fiduciaries under Title I of ERISA which shall subject Company, directly or indirectly, to any penalty or liability for breach of fiduciary duty.

(k)   No Company Benefit Plan has experienced a "reportable event" (as such term is defined in Section 4043(b) of ERISA) that is not subject to an administrative or statutory waiver from the reporting requirement.

SECTION 3.16 Taxes and Tax Matters

(a)   Company has paid all Taxes due and payable by it for or with respect to all periods up to and including the date hereof (without regard to whether or not such Taxes are or were disputed), whether or not shown on any Tax Return.

(b)   Company has filed on a timely basis all Company Tax Returns that it was required to file. All such Company Tax Returns were accurate and complete in all material respects. Company is not the beneficiary of any extension of time within which to file any Tax Return. No claim has ever been made by an authority in a jurisdiction where Company does not file Company Tax Returns that any one of them is or may be subject to taxation by that jurisdiction. Company has not given any currently effective waiver of any statute of limitations in respect of Taxes or agreed to any currently effective extension of time with respect to a Tax assessment or deficiency. There are no security interests on any of the assets of Company that arose in connection with any failure (or alleged failure) to pay any Tax.

(c)   Company has withheld and paid all Taxes required to have been withheld and paid in connection with amounts paid or owing to any employee, independent contractor, creditor, shareholder or other third party.

(d)   Company and the Company Shareholders have no knowledge of any facts or circumstances which could give rise to a reasonable expectation that any authority may assess any additional Taxes for any period for which Company Tax Returns have been filed. There is no dispute or claim concerning any liability for taxes of Company either (i) claimed or raised by any authority in writing or (ii) as to which Company or any Company Shareholders has knowledge based upon personal contact with any agent of such authority. Company has delivered to Parent copies of, and Schedule 3.16 sets forth a complete and accurate list of, Company Tax Returns filed with respect to the taxable periods of Company ended on or after December 31, 2005; indicates those Company Tax Returns that have been audited; and indicates those Company Tax Returns that currently are the subject of an audit.

(e)   Except as set forth on Schedule 3.16(e), the unpaid Taxes of Company (i) did not, as of the date of any financial statements of Company furnished to Parent pursuant to Section 3.08, exceed the reserve for any Tax Liability (rather than any reserve for deferred Taxes established to reflect timing differences between book and Tax income) set forth on the face of the such financial statements (rather than in any notes thereto) and (ii) do not exceed that reserve as adjusted for the passage of time through the Closing Date in accordance with the past custom and practice of Company in filing their Company Tax Returns.

(f)   Company has not filed a consent under Section 341(f) of the Code, concerning collapsible corporations. Company has not been a United States real property holding corporation within the meaning of Section 897(c)(2) of the Code during the applicable period specified in Section 897(c)(1)(A)(ii) of the Code. Except as set forth on Schedule 3.16(e), the Company has disclosed on its federal income Company Tax Returns all positions taken therein that could reasonably be expected to give rise to a substantial understatement of federal income Tax within the meaning of Section 6662 of the Code. Company is not a party to any Tax allocation or sharing agreement. Company (A)  has not been a member of an “affiliated group,” as defined in Section 1504(a) of the Code, filing a consolidated federal income Tax Return (other than a group the common parent of which was Company) and (B) does not have any Liability for the Taxes of any Person (other than any of Company) under Treas. Reg. Section 1.1502-6 (or any similar provision of state, local, or foreign law), as a transferee or successor, by contract or otherwise.

(g)   Schedule 3.16 sets forth the following information with respect to Company as of the date hereof: (i) the tax basis of Company in its assets; (ii) the amount of any net operating loss, net capital loss, unused investment, foreign tax or other credit, or excess charitable contribution allocable to Company; and (iii) the amount of any deferred gain or loss allocable to Company arising out of any “deferred intercompany transaction” as defined in Treas. Reg. Section 1.1502-13(a)(2).

(h)   Company (and any predecessor of Company) has been a validly electing S corporation within the meaning of Code §§ 1361 and 1362 at all times during its existence and Company will be an S corporation up to and including the day before the Closing Date.

(j)   Company shall not be liable for any Tax under Code §1374 in connection with the deemed sale of Company’s assets caused by the §338(h)(10) Election. Company has not, in the past 10 years (A) acquired assets from another corporation in a tran