AGREEMENT AND PLAN OF MERGER BY AND AMONG AGILYSYS, INC., AGILYSYS NJ, INC. AND INNOVATIVE SYSTEMS DESIGN, INC. May 25, 2007

Exhibit 10.1

 

 

 

Exhibits :
Exhibit A		Form of Escrow Agreement
Exhibit B		Form of New Jersey Certificate of Merger
Exhibit C		Form of Earnout Agreement
Exhibit D		Form of Non-Competition Agreement
Annexes :
Annex 1		Merger Consideration and Allocation Spreadsheet
Annex 2		Tax Allocation Schedule

Company Disclosure Schedule:

Attached

Parent Disclosure Schedule:

Attached

-ii-

AGREEMENT AND PLAN OF MERGER

     THIS AGREEMENT AND PLAN OF MERGER (this “ Agreement ”) is made and entered into as of May 25, 2007, by and among Agilysys, Inc., an Ohio corporation (“ Parent ”), Agilysys NJ, Inc., a New Jersey corporation and wholly-owned subsidiary of Parent (“ Merger Sub ”), Innovative Systems Design, Inc. d/b/a Innovativ Systems Design, Inc., a New Jersey corporation (the “ Company ”) and, solely for purposes of Section 7.4 herein, Vincent James Spinella (the “ Named Stockholder ”).

RECITALS

     A. The boards of directors of the Company, Merger Sub and Parent believe it is in the best interests of their respective corporations and the stockholders of their respective corporations that the Company be acquired by Parent through the statutory merger of Merger Sub with and into the Company (the “ Merger ”) and, in furtherance thereof, have deemed advisable, approved and adopted this Agreement and the Merger.

     B. Pursuant to the Merger, among other matters, the outstanding shares of capital stock of the Company (“ Company Capital Stock ”) shall be converted into the right to receive cash in the amounts and on the terms and subject to the conditions set forth herein.

     C. As a condition to the consummation of the transactions contemplated by this Agreement, Parent, Merger Sub and Key Bank, N.A., Cleveland, Ohio (the “ Escrow Agent ”) will enter into an Escrow Agreement, substantially in the form attached hereto as Exhibit A (the “ Escrow Agreement ”), pursuant to which, among other things, at the Effective Time (as hereinafter defined) Parent will deposit a portion of the Merger Consideration into an account (the “ Escrow Fund ”) with the Escrow Agent, such amount to secure Parent’s right to indemnification as set forth herein.

     D. The Company, Merger Sub and Parent desire to make certain representations and warranties and other agreements in connection with the Merger.

     NOW, THEREFORE, in consideration of the premises, covenants, agreements and representations set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged and intending to be legally bound, the parties hereto agree as follows:

ARTICLE I

THE MERGER

      1.1 The Merger . At the Effective Time, and subject to and upon the terms and conditions set forth in this Agreement and the applicable provisions of the New Jersey Business Corporation Act (the “ NJBCA ”), Merger Sub shall be merged with and into the Company, the separate corporate existence of Merger Sub shall cease and the Company shall continue as the surviving corporation and as a wholly-owned subsidiary of Parent. The Company as the surviving corporation after the Merger is hereinafter sometimes referred to as the “ Surviving Corporation .”

      1.2 Closing; Effective Time . The closing of the Merger (the “ Closing ”) shall take place as soon as practicable, but no later than five (5) Business Days, after the satisfaction or waiver of each of the conditions set forth in Article V (other than those conditions that by their nature are to be satisfied at the Closing, but subject to satisfaction thereof at the Closing) or at such other time as the parties hereto agree in writing (the “ Closing Date ”). The Closing shall take place at the offices of Lowenstein Sandler PC, 65 Livingston Avenue, Roseland, New Jersey, or at such other location as the parties hereto agree in writing. At the Closing, the parties hereto shall cause the Merger to be consummated by filing a Certificate of Merger in the form annexed hereto as Exhibit B (the “ New Jersey Certificate of Merger ”), together with the required officers’ certificates, with the New Jersey Secretary of State, in accordance with the relevant provisions of the NJBCA (the time that the New Jersey Certificate of Merger is filed and accepted by the New Jersey Secretary of State (or such later time as may be specified in the New Jersey Certificate of Merger) or such later time as may be agreed to by Parent and the Company and set forth in such filing being the “ Effective Time ”).

      1.3 Effect of the Merger . At the Effective Time, the effect of the Merger shall be as provided in this Agreement, the New Jersey Certificate of Merger and the applicable provisions of the NJBCA.

      1.4 Certificate of Incorporation; Bylaws .

     (a) At the Effective Time, the Company certificate of incorporation shall be amended and restated so as to be materially similar to the Certificate of Incorporation of Merger Sub as in effect immediately prior to the Effective Time, except that the name of the Surviving Corporation shall be Agilysys NJ, Inc., and as so amended and restated such Amended and Restated Certificate of Incorporation shall be the Certificate of Incorporation of the Surviving Corporation until thereafter amended.

     (b) The Bylaws of Merger Sub, as in effect immediately prior to the Effective Time, shall be the Bylaws of the Surviving Corporation until thereafter amended.

      1.5 Directors and Officers . From and after the Effective Time, the directors of Merger Sub immediately prior to the Effective Time shall be the directors of the Surviving Corporation and the officers of Merger Sub immediately prior to the Effective Time shall be the officers of the Surviving Corporation, in each case until the earlier of their respective deaths, resignations or removals or until their respective successors are duly elected or appointed and qualified, as the case may be.

      1.6 Merger Consideration .

     (a)  Conversion of Company Capital Stock . At the Effective Time, on the terms and subject to the conditions of this Agreement by virtue of the Merger and without any action on the part of the holder of any shares of Company Capital Stock, each share of Company Capital Stock issued and outstanding immediately prior to the Effective Time (other than shares to be canceled pursuant to Section 1.6 and shares, if any, of Company Capital Stock outstanding immediately prior to the Effective Time and held by a holder who has not voted in favor of the Agreement or consented thereto in writing and who has complied with the requirements of the

NJBCA (“ Dissenting Shares ”)) shall be canceled and extinguished and converted into the right to receive such portion of the Merger Consideration as set forth on Annex I attached hereto pursuant to the procedures set forth in Section 1.7 hereof. Promptly after the execution of this Agreement, but prior to the Closing, the Company will deliver to Parent a schedule (the “ Allocation Spreadsheet ”) showing, among other matters, (i) the amount of cash to be received by each holder of Company Capital Stock at the Effective Time as provided for in this Section 1.6(a) based on the formulas set forth in Annex I and the assumptions set forth in such schedule, and (ii) a true, complete and correct list of the aggregate number of shares of Company Capital Stock held by each stockholder.

     (b)  Adjustments to Conversion Ratios . The amount of cash into which each share of Company Capital Stock is to be converted as set forth in Annex I shall be adjusted to reflect fully the effect of any stock split, reverse split, stock dividend (including any dividend or distribution of securities convertible into Company Capital Stock), reorganization, recapitalization or other like change with respect to Company Capital Stock occurring after the date hereof and prior to the Effective Time.

     (c)  Conversion of Merger Sub Capital Stock . Each share of common stock of Merger Sub issued and outstanding immediately prior to the Effective Time shall remain outstanding and shall represent one (1) validly issued, fully paid and nonassessable share of common stock of the Surviving Corporation.

     (d)  Appraisal Rights . Notwithstanding anything in this Agreement to the contrary, Dissenting Shares shall not be converted into the right to receive the allocable portion of the Merger Consideration as set forth in Annex I but shall instead be converted into the right to receive such consideration as may be determined to be due with respect to such Dissenting Shares pursuant to applicable Law. The Company agrees that, except with the prior written consent of Parent, or as required under applicable Law, it will not voluntarily make any payment with respect to, or settle or offer to settle, any such purchase demand made by any holder of Dissenting Shares (“ Dissenting Stockholder ”) under applicable Law. The Company also agrees to give Parent (x) prompt notice of any written demand for appraisal of any Company Capital Stock, attempted withdrawals of such demands, and any other instruments received by the Company related to any rights of appraisal and (y) the opportunity to direct all demands for appraisal under applicable Law. Each Dissenting Stockholder who, pursuant to the provisions of applicable Law, becomes entitled to payment of the “ fair value ” for their shares of Company Capital Stock shall receive payment therefor (but only after the value therefor shall have been agreed upon or finally determined pursuant to such provisions). If, after the Effective Time, any Dissenting Shares shall lose their status as Dissenting Shares, Parent shall issue and deliver, upon surrender by such stockholder of certificate or certificates representing shares of Company Capital Stock, the portion of the Merger Consideration to which such stockholder would otherwise be entitled under this Section 1.6 .

      1.7 Payment Procedures

     (a) Parent shall (i) acting as payment agent in connection with the Merger (the “ Payment Agent ”), make available, no later than five (5) days after the Closing, in exchange for shares of the Company Capital Stock outstanding immediately prior to the Effective Time, the Merger Consideration as set forth on Annex I minus the Escrowed Amount, (ii) at the Closing, deliver to the Escrow Agent, Seven Million Five Hundred Thousand Dollars ($7,500,000) (the “ Escrowed Amount ”), and (iii) at the Closing, deliver to each holder of record of shares of Company Capital Stock that were converted into the right to receive cash (A) a letter of transmittal in customary form (including an accompanying Substitute Form W-9) (each, a “ Letter of Transmittal ”) (which shall specify that delivery shall be effected, and risk of loss and title to the certificates representing outstanding shares of Company Capital Stock (each, a “ Company Certificate ”) shall pass, only upon delivery of the Letter of Transmittal and the Company Certificates to the Payment Agent), which Letter of Transmittal shall specify, among other things, the appointment of the Stockholder Representative under Section 7.4 of this Agreement and shall include, among other things, representations that such holder owns, of record and beneficially, the Company Capital Stock evidenced by the Company Certificate surrendered by such holder to the Payment Agent for payment and that such holder has the power and authority to execute and deliver such Letter of Transmittal and Company Certificate and (B) instructions for use in effecting the surrender of the Company Certificates in exchange for the relevant portion of the Merger Consideration. Parent shall be responsible for the fees and expenses incurred as a result of its actions as Payment Agent.

     (b) The Escrow Amount shall be deposited into escrow with the Escrow Agent and subject to the terms of the Escrow Agreement and this Agreement, subject to release as described in Section 1.8 below.

     (c) Upon surrender of Company Certificates to the Payment Agent, together with such Letter of Transmittal (including the accompanying Substitute Form W-9), duly completed and validly executed in accordance with the instructions thereto, the holder of such Company Certificates shall be entitled to receive in exchange therefor the amount of cash to which such holder is entitled pursuant to Section 1.6 and Annex I , and the Company Certificate so surrendered shall forthwith be canceled. Until so surrendered, each outstanding Company Certificate that, prior to the Effective Time, represented one or more shares of Company Capital Stock will be deemed from and after the Effective Time, for all corporate purposes to evidence only the right to receive that portion of the Merger Consideration payable in respect of such shares of Company Capital Stock pursuant to Section 1.6 and Annex I .

     (d)  Transfers of Ownership . If any cash is to be paid in a name other than that in which the Company Certificate surrendered in exchange therefor is registered, it shall be a condition of the payment thereof that the Company Certificate so surrendered has been properly endorsed and otherwise in proper form for transfer and that the person requesting such exchange has paid to Parent or any agent designated by it any transfer or other taxes required by reason of the payment of cash in any name other than that of the registered holder of the Company

Certificate surrendered, or established to the reasonable satisfaction of Parent or any agent designated by Parent that such tax has been paid or is not payable.

     (e)  Dissenting Shares . The provisions of this Section 1.7 shall also apply to Dissenting Shares that lose their status as such, except that the obligations of Parent under this Section 1.7 shall commence on the date of loss of such status and the holder of such shares shall be entitled to receive in exchange for such shares the cash amount which such holder is entitled to receive pursuant to Section 1.6 and Annex I .

     (f)  Termination of Fund; No Liability . At any time following six months after the Effective Time, the Surviving Corporation will be entitled to require the Payment Agent to deliver to it any funds (including any earnings received with respect thereto) which had been made available to the Payment Agent and which have not been disbursed to holders of Company Certificates, and thereafter such holders will be entitled to look only to the Surviving Corporation (subject to abandoned property, escheat or other similar laws) and only as general creditors thereof with respect to the portion of the Merger Consideration payable upon due surrender of their Company Certificates, without any interest thereon. Notwithstanding the foregoing, neither the Surviving Corporation nor the Payment Agent will be liable to any holder of a Company Certificate for the portion of the Merger Consideration properly delivered to a public official pursuant to any applicable abandoned property, escheat or similar law. Parent or the Payment Agent will be entitled to deduct and withhold from the Merger Consideration otherwise payable pursuant to this Agreement to any holder of shares of Company Capital Stock such withholding taxes as Parent or the Payment Agent are required to deduct and withhold with respect to the making of such payment. To the extent that amounts are so withheld by Parent or the Payment Agent, such withheld amounts shall be treated for all purposes of this Agreement as having been paid to the holder of shares of Company Capital Stock in respect of whom such deduction and withholding was made by Parent or the Payment Agent.

      1.8 Indemnification Escrow . The Escrow Amount shall be deposited into an interest bearing escrow account with the Escrow Agent and shall be subject to the terms of the Escrow Agreement and this Agreement and shall remain in escrow until the eighteen (18) month anniversary of the Closing Date (the “ Indemnity Release Date ”) or until it is paid to a Parent Indemnitee (by reason of a Working Capital Shortfall (as defined in Section 1.9 below) or an indemnification claim under Section 7.2 below); provided , that upon the Indemnity Release Date, an amount equal to the difference between (a) the remainder of the Escrow Amount and (b) the then-applicable Reserve Amount shall be promptly released by the Escrow Agent pursuant to the terms of the Escrow Agreement to the holders of Company Capital Stock in accordance with this Agreement. For purposes hereof, the term “ Reserve Amount ” shall mean the sum of any amounts set forth in any Indemnification Notices or Claim Notices provided pursuant to Section 7.3 hereof which describe in reasonable detail the nature and amount of any such claim or claims (provided, however, that if any such notice includes a good faith statement that the relevant Parent Indemnitee is not reasonably capable of determining a material portion of the potential Losses from such claim or claims, the Reserve Amount shall be: (i) if the maximum potential Losses can be reasonably estimated in good faith by the relevant Parent Indemnitee, the maximum amount of such potential Losses or (ii) if such maximum amount cannot be reasonably estimated in good faith (such assertion to be supported by a letter from the relevant Parent Indemnitee’s outside counsel), the full balance remaining in the Escrow Account), with each

such Claim being deemed a part of the Reserve Amount until the final disposition of the Claim or Claims underlying such amounts.

      1.9 Working Capital Adjustment .

     (a) As used herein, “ Working Capital ” shall mean the Company’s working capital as defined in accordance with GAAP applied in a manner consistent with that used by the parties hereto in determining the Working Capital Target as set forth on Section 1.9 of the Parent Disclosure Schedule. The specific components of and guidelines for determining the Working Capital shall be as described and set forth on said Section 1.9 of the Parent Disclosure Schedule. For purposes of this Section 1.9 , the “ Working Capital Target ” shall be $8,800,000.

     (b) Contemporaneously with Parent’s post-Closing delivery of the financial statements of the Company and Surviving Corporation as part of its required Form 8-K filing as specified in Rule 3-05(b) of Regulation S-X, Parent shall deliver to the Stockholder Representative a statement (the “ Preliminary Adjustment Statement ”) setting forth the Closing Working Capital. The Preliminary Adjustment Statement shall be prepared as of 11:59 p.m. on the Closing Date on a basis consistent with the methodology set forth in this Section 1.9 . All expenses incurred in connection with the preparation of the Preliminary Adjustment Statement shall be the responsibility of Parent. In preparing the Preliminary Adjustment Statement it shall be assumed that the Business shall be continued as a going concern and there shall not be taken into account any of the plans, transactions or changes that Parent intends to initiate or make or cause to be initiated or made at or after the Closing Date with respect to the Business.

     (c) The Stockholder Representative or his designees and agents shall be entitled to review the Preliminary Adjustment Statement and any working papers and similar materials relating to the Preliminary Adjustment Statement prepared by Parent or its accountants. Parent also shall provide the Stockholder Representative with timely access, during normal business hours, to the personnel, properties, books and records of the Surviving Corporation and all other information reasonably requested, to the extent related to the determination of the Preliminary Adjustment Statement. The Stockholder Representative agrees to keep any and all such information received by him confidential and not to disclose such information or otherwise use it for any purposes other than reviewing the Preliminary Adjustment Statement and to resolve any disputes with respect to the foregoing.

     (d) The Stockholder Representative shall review the Preliminary Adjustment Statement and, on or before the thirtieth (30th) day after the Stockholder Representative’s receipt of the Preliminary Adjustment Statement, the Stockholder Representative shall deliver to Parent, in writing, any objection or dispute thereto which the Stockholder Representative may have with respect to the Preliminary Adjustment Statement. If the Stockholder Representative fails to make a timely objection to the Preliminary Adjustment Statement, the Stockholder Representative will be deemed, on behalf of the Company Stockholders to have accepted the Preliminary Adjustment Statement. If the Stockholder Representative makes a timely objection to the Preliminary Adjustment Statement, and Parent and the Stockholder Representative are unable to resolve their disputes within fifteen (15) days after the objection of the Stockholder Representative, the dispute shall be resolved by the Independent Accountants. The determinations of the Independent Accountants shall be final, binding and conclusive to Parent, the Stockholder Representative on behalf of the Company Stockholders and their respective Affiliates,

successors, assigns or heirs. The fees, expenses and disbursements of the Independent Accountants (i) shall be borne by the Company Stockholders and payable from the Escrow Amount in the proportion that the aggregate dollar amount of such disputed items so submitted that are unsuccessfully disputed by the Stockholder Representative bears to the aggregate dollar amount of such items so submitted and (ii) shall be borne by Parent in the proportion that the aggregate dollar amount of such disputed items so submitted that are successfully disputed by the Stockholder Representative bears to the aggregate dollar amount of such items so submitted.

     (e) The Preliminary Adjustment Statement shall become the “ Final Adjustment Statement ” unless timely and properly disputed or objected to by the Stockholder Representative in accordance with Section 1.9(d) above or otherwise as determined by the Independent Accountants, and, as such, shall become final, binding and conclusive upon Parent, the Stockholder Representative on behalf of the Company Stockholders and their respective Affiliates, successors, assigns or heirs for all purposes of this Agreement. For purposes of this Section 1.9 , “ Closing Working Capital ” means the Working Capital reflected on the Final Adjustment Statement.

     (f) If the Closing Working Capital is less than the Working Capital Target (a “ Working Capital Shortfall ”), the Company Stockholders shall pay to Parent the amount of such Working Capital Shortfall, which payment shall be made, without interest, by means of a wire transfer of immediately available funds from the Escrow Amount. If the Closing Working Capital is greater than the Working Capital Target (a “ Working Capital Excess ”), Parent shall pay such Working Capital Excess, without interest, to the Payment Agent. The Payment Agent shall then promptly distribute the amount of any Working Capital Excess received from Parent such that each Company Stockholder shall receive an amount equal to: (x) the Working Capital Excess multiplied by (y) a fraction (i) the numerator of which is the total number of shares of Company Common Stock held by such Company Stockholder as of the Effective Time, and (ii) the denominator of which is the aggregate number of issued and outstanding shares of held by all of the Company Stockholders as of the Effective Time. For Tax purposes, any payment by under this Section 1.9 shall be treated as an adjustment to the Purchase Price.

      1.10 Performance Based Consideration Provisions . In addition to the Merger Consideration, Parent will pay to the Payment Agent for distribution to each Company Stockholder in the same allocation and same manner as the Merger Consideration, an amount equal to the “ Additional Consideration ” as determined pursuant to the terms of the Earnout Agreement, substantially in the form attached hereto as Exhibit C (the “ Earnout Agreement ”), which Additional Consideration in no event will exceed Ninety Million Dollars ($90,000,000).

      1.11 No Further Ownership Rights in Company Capital Stock . All cash paid upon the surrender for exchange of shares of Company Capital Stock in accordance with the terms hereof shall be deemed to have been issued in full satisfaction of all rights pertaining to such shares of Company Capital Stock, and there shall be no further registration of transfers on the records of the Surviving Corporation of shares of Company Capital Stock which were outstanding immediately prior to the Effective Time.

      1.12 Lost, Stolen or Destroyed Certificates . In the event any Company Certificates shall have been lost, stolen or destroyed, the Payment Agent shall issue and pay in exchange for such lost, stolen or destroyed Company Certificates, upon the making of an

affidavit of that fact by the holder thereof, the portion of the Merger Consideration payable pursuant to Section 1.6 and Annex I with respect to shares of Company Capital Stock represented by such certificates; provided , however , that Parent may, in its discretion and as a condition precedent to the issuance and payment thereof, require the owner of such lost, stolen or destroyed Company Certificates to deliver to Parent an affidavit of loss, theft or destruction in form reasonably satisfactory to Parent and the posting by such owner of a bond, in such amount as Parent may direct, as indemnity against any claim that may be made against Parent, Merger Sub, the Surviving Corporation, the Company or any of their respective directors, officers, employees, affiliates or agents with respect to Company Certificates alleged to have been lost, stolen or destroyed.

      1.13 Taking of Necessary Action; Further Action . At any time after the Effective Time, the officers and directors of Merger Sub, the Company and the Surviving Corporation shall take such further action as may be reasonably requested by Parent which is necessary or desirable to carry out the purposes of this Agreement and to vest Parent with control over, and to vest the Surviving Corporation with full right, title and possession to, all assets, property, rights, privileges, powers and franchises of the Company.

ARTICLE II

REPRESENTATIONS AND WARRANTIES OF COMPANY

     Except as expressly disclosed in the applicable Section of the disclosure schedule of even date herewith delivered by the Company to Parent and Merger Sub contemporaneously with the execution and delivery of this Agreement (the “ Company Disclosure Schedule ”), as of the date hereof (except as to any representation or warranty which specifically relates to another date) the Company represents and warrants to Parent and Merger Sub as follows:

      2.1 Organization, Standing and Power; Subsidiaries .

     (a) The Company (i) is a corporation duly organized, validly existing and in good standing under the laws of the State of New Jersey, (ii) has all requisite corporate power and authority to own, lease and operate its properties and to carry on the Business as it is now being conducted, to enter into this Agreement, the Escrow Agreement, the Earnout Agreement and any other agreement, certificate or instrument to be executed and delivered pursuant to the terms of this Agreement, to perform its obligations hereunder and thereunder, and to consummate the transactions contemplated hereby and thereby, and (iii) is duly qualified and in good standing to do business in those jurisdictions listed in Section 2.1(a) of the Company Disclosure Schedule and in all other jurisdictions where the character of the properties owned, leased or operated by it or the nature of its activities makes such qualification necessary, except where the failure to be so qualified or in good standing would not have a Company Material Adverse Effect.

     (b) The Company does not have any Subsidiaries nor does it have, directly or indirectly, any joint venture, partnership or similar relationship with, or any ownership or voting interest of any kind in, any Person.

      2.2 Capital Structure .

     (a) At the close of business on the date of this Agreement, the total number of shares of capital stock that the Company has authority to issue is Five Thousand (5,000) shares of common stock of the Company, no par value per share (the “ Common Stock ”), all of which shares of Common Stock are issued and outstanding. All of the issued and outstanding shares of capital stock were duly authorized for issuance and are validly issued, fully paid and non-assessable.

     (b) Other than those items described in Section 2.2(b) of the Company Disclosure Schedule, there are no outstanding options, warrants, calls, rights or other contracts or instruments of any character (including any shareholder agreement, buy-sell agreement or other similar agreement) requiring, and there are no securities of the Company outstanding which upon conversion or exchange would require, the issuance, sale or transfer of any additional shares of capital stock or other equity securities of the Company or other securities convertible into, exchangeable for or evidencing the right to subscribe for or purchase shares of capital stock or other equity securities of the Company. None of the shares of Common Stock were issued or, since issuance, has been transferred, in violation of any Law or contract, including any pre-emptive right, right of first refusal or other similar right of any Person.

      2.3 Authority; No Conflicts; Governmental Approval .

     (a)  Authorization; Binding Obligation . The execution and delivery by the Company of this Agreement, the Escrow Agreement and the Earnout Agreement, the performance of its obligations hereunder and thereunder, and the consummation by the Company of the transactions contemplated hereby and thereby, have been duly and validly authorized by all necessary action on the part of the Company and its board of directors, and no other corporate proceedings on the part of the Company are necessary to authorize this Agreement, the Escrow Agreement or the Earnout Agreement, to consummate the transactions contemplated hereby and thereby or to otherwise fulfill their obligations hereunder and thereunder. This Agreement has been, and each of the Escrow Agreement and the Earnout Agreement, when executed and delivered by the Company (and assuming the due authorization, execution and delivery by the other parties thereto) will be, duly and validly executed and delivered by the Company, and this Agreement constitutes, and each of the Escrow Agreement and the Earnout Agreement, when executed and delivered, will constitute, a legal, valid and binding obligation of the Company enforceable against the Company in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium and similar laws affecting creditors’ rights and remedies generally, and subject, as to enforceability, to general principles of equity, including principles of commercial reasonableness, good faith and fair dealing (regardless of whether enforcement is sought in a proceeding at law or in equity).

     (b) The Named Stockholder has the legal right, capacity and power to execute, deliver and perform under this Agreement, the Escrow Agreement and the Earnout Agreement. This Agreement constitutes, and each of the Escrow Agreement and the Earnout Agreement, when executed and delivered, will constitute, a legal, valid and binding obligation of the Named Stockholder enforceable against the Named Stockholder in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium and similar laws

affecting creditors’ rights and remedies generally, and subject, as to enforceability, to general principles of equity, including principles of commercial reasonableness, good faith and fair dealing (regardless of whether enforcement is sought in a proceeding at law or in equity).

     (c) Except for filings that may be required to comply with the HSR Act, the execution and delivery by the Company of this Agreement does not, and the execution and delivery by the Company of the Escrow Agreement and the Earnout Agreement will not, and the performance of this Agreement, the Escrow Agreement and the Earnout Agreement shall not, require the Company to obtain any known Approval of any Person other than as set forth in Section 2.3(c) of the Company Disclosure Schedule, or known Approval of, observe any waiting period imposed by, or make any filing with or notification to, any Governmental Entity.

     (d) The execution and delivery by the Company of this Agreement does not, and the execution and delivery by the Company of each of the Escrow Agreement and the Earnout Agreement will not, and the performance of this Agreement and each of the Escrow Agreement and the Earnout Agreement will not, (a) conflict with or violate the Certificate of Incorporation or by-laws of the Company, (b) materially conflict with or violate any Law or Order, in each case, applicable to the Company, or by which any of the properties of the Company is bound or affected, or (c) subject to Section 2.3(c) of the Company Disclosure Schedule, result in a material breach or violation of, or constitute a material default (or an event that with notice or lapse of time or both would become such a default) under, or materially impair the Company’s rights or alter the rights or obligations of any third party under, or give to others any rights of termination, amendment, acceleration or cancellation of, or result in the creation of a Lien on any of the properties or assets of the Company pursuant to, any material note, bond, mortgage, indenture, Contract, Approval or other instrument or obligation to which the Company is a party or by which the Company or its properties or assets, including the Business, is bound or affected.

     (e) There are no Actions pending or, to the Knowledge of the Company, threatened by or against the Company, whether at law or in equity, or before or by any Governmental Entity, which could materially adversely affect the ability of the Company to perform its obligations under this Agreement, the Escrow Agreement, the Earnout Agreement or the consummation of the transactions contemplated by this Agreement. No Governmental Entity has, prior to the execution hereof, notified the Company that it would oppose or not approve or consent to the transaction contemplated by this Agreement.

      2.4 Financial Statements . Prior to the execution and delivery of this Agreement, the Company has delivered to Parent the (i) audited balance sheets of the Company as of December 31, 2005, and the related audited statements of income for the twelve-month period then ended (the “ Historical Financial Statements ”), and (ii) an unaudited balance sheet of the Company as of December 31, 2006, and March 31, 2007 (the “ Company Balance Sheet ”), and the related unaudited statements of income for the twelve and three month periods respectively then ended (the “ Interim Financial Statements ” and, together with the Historical Financial Statements, the “ Financial Statements ”). The Financial Statements were prepared in accordance with the books and records of the Company, and the Financial Statements fairly present in all material respects the financial condition of the Company as of the dates indicated

and the results of operations of the Company for the respective periods indicated, and have been prepared in accordance with GAAP (subject, in the case of the Interim Financial Statements, to normal year-end adjustments that are not material in amount or nature and footnotes). Except for (i) those Liabilities that are fully reflected or reserved against on the March 31, 2007 balance sheet contained in the Financial Statements or disclosed in the related notes thereto and (ii) Liabilities incurred in the ordinary course of business consistent with past practice since the date of such balance sheet and which are not material to the Company, individually or in the aggregate, the Company does not have any material Liabilities of any nature, whether absolute, accrued, contingent or otherwise and whether due or to become due whether or not required to be reflected or reserved against on a balance sheet of the Company prepared in accordance with GAAP. The books and records of the Company, true and complete copies of which have been previously made available to Parent, have in all material respects been maintained in accordance with good business practices.

      2.5 Absence of Certain Changes . Except as may result from the execution, delivery and performance of this Agreement and the transactions contemplated hereby, since January 1, 2007, (i) there has been no Company Material Adverse Effect and (ii) the Company has been operated in the ordinary course of business consistent with past practice. Specifically, except as set forth in the Financial Statements or Section 2.5 of the Company Disclosure Schedule, since January 1, 2007, the Company has not:

     (a) incurred any Liability (absolute, contingent, accrued or otherwise) or guaranteed or become a surety of any debt;

     (b) sold or transferred or committed to sell or transfer any of its assets, or canceled any debts or claims or waived any rights or encumbered any of its assets whatsoever, except for sale of inventory in the ordinary course of the business of the Company and except for the Dispositions (as defined in Section 4.12 below);

     (c) issued or authorized any stock, bonds, debentures, options, warrants or other securities;

     (d) increased or promised to increase the compensation or fringe benefits of any officer or director, or instituted any general wage increase applicable to employees, or any specified sub-group of employees, except (with respect only to any general wage increase or bonus payment) in the ordinary course of the business of the Company consistent with past practice and with the Company’s compensation plans and programs in existence as of September 30, 2006;

     (e) changed or modified its accounting methods or practices on its books in any material respect;

     (f) settled, or agreed to settle, any litigation, arbitration or other litigation, whether pending or threatened;

     (g) entered into, amended, renewed, modified or extended any employment Contract;

     (h) entered into, amended, terminated or received notice of termination of (A) any material Permit to which the Company is a party, or (B) any Contract or transaction involving a total remaining commitment by the Company of at least $50,000;

     (i) made any amendments to or changes in its articles of incorporation or bylaws;

     (j) engaged in any transaction with any Interested Party; or

     (k) agreed, orally or in writing, to do any of the foregoing.

      2.6 Litigation . Other than as set forth in Section 2.6 of the Company Disclosure Schedule, there is no Action pending or, to the Company’s Knowledge, threatened by or against the Company, and the Company has not received any written claim, complaint, report, threat or notice of any such Action. No Governmental Entity has, prior to the execution hereof, notified the Company that it would oppose or not approve or consent to the transactions contemplated by this Agreement.

      2.7 Compliance with Laws .

     (a) The Company is in compliance in all material respects with all Laws applicable to the Company and its Business. All necessary Permits for the conduct of the Company’s Business are set forth in Section 2.7(a) of the Company Disclosure Schedule. There are no pending investigations or disciplinary proceedings initiated by a Governmental Entity against the Company relating to the Company’s Business, and, to the Company’s Knowledge, no reasonable basis or bases exist for any threatened investigation or disciplinary proceeding against the Company relating to the Company’s Business that could lead to an order or action (i) revoking or suspending any necessary Permits to conduct business or (ii) suspending, restricting, or disqualifying the continued performance of the Business in any material respect.

     (b) The Company possesses or will, prior to Closing possess, all necessary Permits to conduct the Business consistent with current practice in all material respects and to own, operate or maintain assets and property related to the Business.

      2.8 Title to Property .

     (a)  Section 2.8(a) of the Company Disclosure Schedule sets forth all of the material rights and interests in real property and leasehold estates used in connection with the Company’s Business and the nature of its interest therein. The Company has good title to, or valid leasehold interests in, all such real properties leased by the Company identified and reflected on Section 2.8(a) of the Company Disclosure Schedule, in each case free of all Liens other than Permitted Liens. The Company does not own any real property.

     (b) Except as would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect, each lease or agreement under which the Company is a lessee or lessor of any property, real or personal, is a valid and binding agreement of the Company, and no event has occurred and is continuing which, with or without notice or

lapse of time, would constitute a default or event of default by the Company under any such lease or agreement or, to the Company’s Knowledge, by any other party thereto.

     (c) Except as set forth in Section 2.8(c) of the Company Disclosure Schedule, the tangible assets of the Company are owned free of all Liens other than Permitted Liens and, taken as a whole, (i) are in good operating condition and repair, normal wear and tear excepted, (ii) are usable in the ordinary course of business and (iii) are all the tangible assets necessary for the operation of the Business of the Company as it currently is conducted.

      2.9 Intellectual Property .

     (a)  Section 2.9 of the Company Disclosure Schedule sets forth an accurate and complete list of all Patent Rights, Trademark Registrations, Trademark Applications, material unregistered Trademarks, Copyright Registrations, Copyright Applications and Domain Names that are owned by the Company. Other than as set forth in Section 2.9 of the Company Disclosure Schedule:

          (i) the Company owns all right, title and interest in and to all of the Intellectual Property that it purports to own, in each case free and clear of all Liens other than Permitted Liens, and, to the Company’s Knowledge, has the right to use all Intellectual Property owned by third parties and used by the Company pursuant to a valid and enforceable written agreement;

          (ii) to the Company’s Knowledge, the conduct of the Business as currently conducted does not infringe, violate or constitute an unauthorized use or misappropriation of any Intellectual Property of any Person not a party hereto;

          (iii) the Company is not party to any pending, and the Company has not received written notice of any threatened, Action that asserts by way of an express allegation a claim of infringement or misappropriation, violation or unauthorized use of any Intellectual Property against the Company nor, to the Knowledge of the Company, is there any basis for any such Action;

          (iv) except with respect to licenses of commercially available, mass marketed shrink-wrap Software, and except pursuant to the Intellectual Property Licenses listed in Section 2.9 of the Company Disclosure Schedule, the Company has not entered into any Contract with third parties which after the date hereof require the Company to make any payments in excess of $25,000 per annum by way of royalties, fees or otherwise to any third party owner, licensor of, or other claimant to any Intellectual Property, with respect to the Company’s use of such Intellectual Property;

          (v) the Company has taken commercially reasonable measures to protect the secrecy and confidentiality of the material Trade Secrets owned by the Company or that are used by the Company in the conduct of the Business, if any;

          (vi) to the Company’s Knowledge, no third party is infringing, violating, misusing or misappropriating any Intellectual Property that is owned by the Company and material to the Business, and there are no such claims that have been made against any

Person by the Company. There are no Orders to which the Company is a party or by which the Business is bound that restrict, in any material respect, the right to use any of the Intellectual Property owned by the Company. The consummation of the transactions contemplated hereby will not result in the loss or impairment of the Company’s right to own or use any Intellectual Property that is material to the Business; and

          (vii) none of the Company’s present or former employees, consultants or independent contractors has any right, title or interest in any Intellectual Property that is owned by the Company and material to the Business.

     (b) Except with respect to licenses to the Company of commercially available, mass marketed shrink-wrap Software, and except for nonexclusive licenses granted by the Company to end users, distributors and other third parties in the ordinary course of business in connection with the sale and distribution of the Company’s products, Section 2.9 of the Company Disclosure Schedule sets forth a complete and accurate list of all Contracts with third parties to which the Company is a party licensing to or from any such third parties any Intellectual Property that is material to the Business (“ Intellectual Property Licenses ”). The Company has delivered or made available to Parent true, correct and complete copies of each such Intellectual Property Licenses, together with all amendments, modifications or supplements thereto.

     (c)  Section 2.9 of the Company Disclosure Schedule sets forth a complete and accurate list of (i) all Software that is owned exclusively by the Company and that is material to the Business, and (ii) all Software that is used by the Company and material to the Business that is not exclusively owned by the Company, excluding commercially available, mass marketed shrink-wrap software and so-called “open source code” software and “freeware”.

     (d) The Intellectual Property of the Company, taken as a whole, is all the Intellectual Property necessary for the operation of the Business of the Company as it currently is conducted.

      2.10 Taxes .

     (a) (i) All Tax Returns with respect to the Company and the properties, business, income, sales, expenses, net worth or franchises of the Company, the Business, any Subsidiaries or any Affiliated Group, of which the Company or any of its Subsidiaries is or has been a member required to be filed (taking into account any valid extensions of time to file), have been duly and timely filed with the appropriate Tax Authority and all such Tax Returns are true, correct and complete in all material respects and (ii) all Taxes due and payable due in connection with the properties, business, income, sales, expenses, net worth and franchises of by each of the Company and its Subsidiaries have been timely paid;

     (b) no agreement or other document waiving or extending the statute of limitations or the period of assessment or collection of any Taxes payable by the Company or any of its Subsidiaries has been filed or entered into with any Tax Authority;

     (c) neither the Company nor any of its Subsidiaries has received any written notice of any Tax Proceeding against or with respect to the Company or any of its Subsidiaries relating to any Taxes or Tax Returns;

     (d) neither the Company nor any of its Subsidiaries is a party to or bound by or has any obligation under any Tax Sharing Agreement or Tax allocation, indemnity or similar agreement or arrangement (including any advance pricing agreement, closing agreement or other agreement relating to Taxes with any Tax Authority);

     (e) no power of attorney that will be binding on the Company or any of its Subsidiaries after the Closing has been granted or entered into by the Company or its Subsidiaries with respect to any Taxes of the Company or any of its Subsidiaries;

     (f) Parent has received accurate and complete copies of (i) all federal income Tax Returns of or including the Company and each Subsidiary relating to the taxable periods ended since December 31, 2004 and (ii) any audit report issued by a Tax Authority within the last three years relating to any Taxes due from or with respect to the Company or any of its Subsidiaries.

     (g) the Company has not received any notice of any claim by a Tax Authority in a jurisdiction where the Company or any of its Subsidiaries does not file Tax Returns to the effect that the Company or any of its Subsidiaries is, or may be, subject to taxation by that jurisdiction;

     (h) none of the Company or any of its Subsidiaries is a party to any tax ruling or closing agreement with any Governmental Entity;

     (i) neither the Company nor any of its Subsidiaries will be required to include any item of income in, or exclude any item of deduction from, taxable income for any taxable period (or portion thereof) ending after the Closing Date as a result of any intercompany transaction or excess loss account described in Treasury Regulations under Section 1502 of the Code (or any corresponding or similar provision of state, local or foreign Tax law);

     (j) neither the Company nor any of its Subsidiaries has agreed to or is required to make any adjustments pursuant to Section 481(a) of the Code or any similar provision of state, local or foreign Law by reason of a change in accounting method initiated by the Company (nor, to the Knowledge of the Company, has the IRS proposed any such adjustment), or change in accounting method, or has any application pending with any Tax Authority requesting permission for any changes in accounting methods that relate to the Business or operations of the Company;

     (k) all withholding Tax requirements imposed on the Company relating to the operations and businesses of the Company for all taxable periods through the close of business on the Closing Date shall be satisfied in full in all respects to the extent due and payable on or before such date;

     (l) the Company has made a valid Federal S election pursuant to Section 1362 of the Code, and valid state elections, where applicable, and such elections have not been

revoked or otherwise terminated; since January 1, 2001, the Company has been an S corporation as defined in Section 1361(a)(1) of the Code for federal and state income tax purposes and is eligible for such treatment; the Company has not received any written notice from the IRS or any state taxing authority with respect to the revocation of the status of the Company as an S corporation; and accordingly, the income of the Company is, for Federal and state income tax purposes, included in the gross income of, and taxable to, the holders of the Company Capital Stock pursuant to Section 1366(a) of the Code and analogous state law provisions;

     (m) neither the Company nor any Subsidiary has made any payment, or is or shall become obligated (under any Contract entered into on or before the Closing Date) to make any payment, that shall be nondeductible under Section 280G of the Code (or any corresponding provision of state, local or foreign income Tax Law); and

     (n) neither the Company nor any of its Subsidiaries has ever been a member of an Affiliated Group other than a group of which the Company is the common parent.

      2.11 Environmental Compliance . To the Company’s Knowledge, there are no Environmental Liabilities that, individually or in the aggregate, have or would reasonably be expected to have a Company Material Adverse Effect. “ Environmental Liabilities ” means any and all liabilities, current or future, accrued or contingent, of the Company which arise under or relate to any and all applicable Laws relating to the environment or the effect of the environment on human health, or relating to emissions, discharges, handling, management, disposal, use or releases of pollutants, contaminants, petroleum or petroleum products, asbestos, PCBs, chemicals or industrial, toxic, radioactive or hazardous substances or wastes into the environment, including ambient air, surface water, ground water, or land, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of pollutants, contaminants, petroleum or petroleum products, asbestos, PCBs, chemicals or industrial, toxic, radioactive or hazardous substances or wastes or the clean-up or other remediation thereof.

      2.12 Employee Matters; Employee Benefit Plans .

     (a)  Schedule 2.12(a) of the Company Disclosure Schedule contains a true and complete list as of April 1, 2007, of the employees employed by the Company, indicating the title of and a description of any agreements concerning such employees and a listing of the rate of all current salary and bonus payable by the Company to each employee. The Company has delivered to the Parent a copy of each employment, consulting or independent contractor agreement, confidentiality/assignment of inventions agreement and/or non-competition agreement entered into with an employee or service provider of the Company. To the Knowledge of the Company, no officer or key employee has any plans to terminate employment or service with the Company.

     (b) Except as set forth on Section 2.12(b) of the Company Disclosure Schedule, with respect to current and former employees and service providers of the Company (each a “ Service Provider ”):

          (i) the Company is in compliance in all material respects with all applicable Laws respecting employment and employment practices, terms and conditions of employment and wages and hours, including any laws respecting minimum wage and overtime payments, employment discrimination, workers’ compensation, employee benefits (including Code and other Tax provisions related to any favorable Tax treatment intended for a Benefit Arrangement or applicable to plans of its type), family and medical leave, immigration, and occupational safety and health requirements, and has not and is not engaged in any unfair labor practice;

          (ii) there is no claim and, to the Knowledge of the Company, there is no basis for any claim that such Service Provider was subject to a wrongful discharge or any employment discrimination by the Company, or their respective management, arising out of or relating to such Service Provider’s race, sex, age, religion, national origin, ethnicity, handicap or any other protected characteristic under applicable Laws;

          (iii) there is not now, nor within the past twenty-four (24) months has there been, any actions, suits, claims, labor disputes, investigations or grievances pending, or, to the Knowledge of the Company, threatened or reasonably anticipated relating to any labor, safety or discrimination matters involving any Service Provider, including charges of unfair labor practices or discrimination complaints, which, if adversely determined, would, individually or in the aggregate, result in any material liability to the Company;

          (iv) the Service Providers of the Company are not and have never been represented by any labor union, no collective bargaining agreement is binding and in force against the Company or currently being negotiated by the Company, and to the Company’s Knowledge, no union organization campaign is in progress with respect to any of the Service Providers, and no question concerning representation exists respecting such Service Providers;

          (v) the Company has not entered into any agreement, arrangement or understanding restricting its ability to terminate the employment of any or all of its Service Providers at any time, for any lawful or no reason, without penalty or liability;

          (vi) the Company does not have any material liability for any payment to any trust or other fund governed by or maintained by or on behalf of any Governmental Entity with respect to unemployment compensation benefits, social security or other benefits or obligations for Service Providers (other than routine payments to be made in the normal course of business and consistent with past practice); and

          (vii) there are no pending nor, to the Knowledge of the Company, threatened or reasonably anticipated claims or actions against the Company under any worker’s compensation policy or long-term disability policy.

     (c) To the Knowledge of the Company, no “mass layoff,” “plant closing” or similar event as defined by the Worker Adjustment and Retraining Notification Act with respect to the Company has occurred within the past twelve (12) months.

     (d) Except as disclosed on Schedule 2.12(d) of the Company Disclosure Schedule, (i) neither the Company nor any of its ERISA Affiliates maintain or sponsor, or has

any material liability, contingent or otherwise, with respect to, any Benefit Arrangement, (ii) no Benefit Arrangement provides or has ever provided post-employment welfare benefits or severance benefits, except to the extent required by Part 6 of Title I of ERISA or similar state laws, and (iii) no Benefit Arrangement is or has ever been a “welfare benefit fund,” as defined in Section 419(e) of the Code, or an organization described in Sections 501(c)(9) or 501(c)(20) of the Code. The Company has delivered to Parent true and complete copies as of the Closing Date of: (i) each written Benefit Arrangement document and a written description of the material terms of each unwritten Benefit Arrangement, (ii) each summary plan description relating to any Benefit Arrangement, (iii) each trust, insurance or other funding contract or agreement relating to any Benefit Arrangement, (iv) each administrative services contract or agreement relating to any Benefit Arrangement, (v) the three most recent annual reports (Forms 5500) for each Benefit Arrangement (including all related schedules), if applicable, and (vi) the most recent Internal Revenue Service determination letter, opinion, notification or advisory letter (as the case may be) for each Benefit Arrangement that is intended to constitute a qualified plan under Section 401 of the Code. Neither the Company nor any ERISA Affiliate has any obligation or commitment to establish, maintain, operate or administer any new Benefit Arrangement or to amend any Benefit Arrangement so as to increase or add benefits thereunder or otherwise.

     (e) Neither the Company nor any ERISA Affiliate has or has ever had any Liability with respect to any Benefit Arrangement that is subject to Section 302 or Title IV of ERISA, including a “multiemployer plan”, as defined in Section 3(37) of ERISA, or a “single employer plan” within the meaning of Section 4001(a)(15) of ERISA. No Liability remains outstanding with respect to any partially or completely terminated Benefit Arrangement.

     (f) Each Benefit Arrangement intended to constitute a qualified plan under Section 401 of the Code has received a favorable determination or opinion letter from the IRS indicating that it meets the requirements of the laws known by the acronym “GUST” which has not been revoked. No Benefit Arrangement has assets that include securities issued by the Company or any ERISA Affiliate.

     (g) There are no pending or, to the Knowledge of the Company, threatened actions, suits, claims, trials, arbitrations, investigations or other proceedings by any Person or by a Governmental Authority, including any present or former participant or beneficiary under any Benefit Arrangement (or any beneficiary of any such participant or beneficiary) involving any Benefit Arrangement or any rights or benefits under any Benefit Arrangement other than ordinary and usual claims for benefits by participants or beneficiaries thereunder. To the Knowledge of the Company, no event has occurred and no condition exists that could subject the Company or the fund of any Benefit Arrangement to the imposition of any material Liability, Tax or penalty with respect to any Benefit Arrangement (other than ordinary and usual claims for benefits), whether by way of indemnity or otherwise. All contributions required to have been made or remitted and all expenses required to have been paid by the Company to or under any Benefit Arrangement under the terms of any such plan, any agreement or any applicable Law have been paid within the time prescribed by any such plan, agreement or Law. All contributions to or under any Benefit Arrangement have been currently deductible under the Code when made. To the Knowledge of the Company, no “prohibited transaction” (as defined in ERISA Section 406) or breach of fiduciary responsibility has occurred with respect to any

Benefit Arrangement for which a tax, penalty or other Liability of whatever nature could be incurred by the Company or its Subsidiaries, whether by way of indemnity or otherwise.

     (h) Neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated hereby, will now or at any time in the future: (A) result in any payment becoming due from the Company or any of its Subsidiaries to any director, officer, employee, former employee, independent contractor, consultant or agent of them, under any Benefit Arrangement, (B) increase any benefits otherwise payable under any Benefit Arrangement, or (C) result in any acceleration of the time of payment or vesting of any such benefits. The Company has made no agreement, undertaking or commitment with any employee, director, officer, service provider or agent (whether written or oral) (x) to make such person fully or partially whole with respect to any adverse Tax consequences, including any that might be imposed under Sections 409A or 280G of the Code, or (y) with respect to the steps it will take to revise any benefit programs for compliance with, or exemption from, Section 409A of the Code.

     (i) Solely for purposes of this Section 2.12 , the term “Knowledge of the Company” includes the knowledge Frank Batula has or would have after due inquiry.

      2.13 Interested Party Transactions . Except as set forth in Section 2.13 of the Company Disclosure Schedule, no holder of the Company’s Capital Stock, director, officer or Service Provider of the Company or any of its Subsidiaries, and no member of their immediate families (an “ Interested Party ”), has any direct or indirect interest (as an owner, employee, consultant or otherwise) in (i) any material equipment or other property, real or personal, tangible or intangible, including without limitation, any item of intellectual property, used in connection with or pertaining to the Company or any of its Subsidiaries or (ii) any competitor, lessee, lessor, creditor, supplier, customer, manufacturer, agent, representative or distributor of products of the Company or any of its Subsidiaries; provided , however , that no such Interested Party shall be deemed to have such an interest solely by virtue of the ownership by such Person, such Person’s immediate family or their respective Affiliates of less than one percent (1%) of the outstanding voting stock or debt securities of which are traded on a recognized stock exchange or quoted on the National Association of Securities Dealers Automated Quotation System. All Interested Party matters disclosed on said Section 2.13 of the Company Disclosure Schedule were entered into on arms’-length terms and are the subject of valid and enforceable written Contracts.

      2.14 Insurance . Section 2.14 of the Company Disclosure Schedule sets forth a true and complete list of all insurance policies carried by, or covering the Company and its Subsidiaries with respect to their businesses, assets and properties, together with, in respect of each such policy, the name of the insurer, the policy number, the type of policy, the amount of coverage and the deductible. True an