AGREEMENT AND PLAN OF MERGER, DATED AS OF OCTOBER 26,2006

Exhibit 2.1

AGREEMENT AND PLAN OF MERGER

by and among

The TriZetto Group, Inc.

PDM Acquisition Corp.,

Plan Data Management, Inc. and the Representative

dated as of October 26, 2006

Confidential material has been omitted and filed separately with the Securities and Exchange Commission.

AGREEMENT AND PLAN OF MERGER

THIS AGREEMENT AND PLAN OF MERGER (the " Agreement "), is made and entered into as of October 26, 2006, by and among The TriZetto Group, Inc., a Delaware corporation (" Parent "), PDM Acquisition Corp., a New York corporation and wholly-owned Subsidiary of Parent (" Merger Sub "), Plan Data Management, Inc., a New York corporation (the " Company "), and Stephen B.C. Jackson, in his capacity as representative (the " Representative "). Certain other capitalized terms used in this Agreement are defined in Exhibit A attached hereto.

RECITALS

WHEREAS, Parent, Merger Sub and the Company intend to effect a merger (the " Merger ") of Merger Sub with and into the Company in accordance with this Agreement and the applicable provisions of the General Corporation Law of the State of Delaware (the " DGCL ") and the Business Corporation Law of the State of New York (the "NYBCL"), with the Company to be the surviving corporation of the Merger. Following the Merger, Parent will effect the Sideways Merger;

WHEREAS, the respective Boards of Directors of Parent, Merger Sub and the Company have approved this Agreement and the Merger, upon the terms and subject to the conditions set forth in this Agreement in accordance with the DGCL and the NYBCL, as applicable, and their respective charter documents;

WHEREAS, the stockholders of the Company have approved this Agreement and the Merger, upon the terms and subject to the conditions set forth in this Agreement in accordance with the NYBCL and the Company’s charter documents;

WHEREAS, the Merger and the Sideways Merger are intended to be part of an integrated plan and together are intended to qualify as a reorganization within the meaning of Section 368(a) of the Code, and this Agreement is intended to constitute a "plan of reorganization" within the meaning of the regulations promulgated under Section 368 of the Code; and

WHEREAS, each of Parent, Merger Sub and the Company desire to make certain representations, warranties, covenants and agreements in connection with the Merger and also to prescribe various conditions to the consummation thereof.

AGREEMENT

NOW, THEREFORE, in consideration of the foregoing and the mutual promises, representations, warranties, covenants and agreements herein contained, the parties hereto, intending to be legally bound, hereby agree as follows:

ARTICLE 1

THE MERGER

1.1. The Merger . Upon the terms and subject to the conditions set forth in this Agreement, and in accordance with the DGCL and the NYBCL, the Merger Sub shall be merged with and into the Company at the Effective Time of the Merger (as defined in Section 1.3). Following the Merger, the separate corporate existence of Merger Sub shall cease, and the Company

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shall continue as the surviving corporation (the " Surviving Corporation ") and shall succeed to and assume all the rights, properties, liabilities and obligations of the Company in accordance with the DGCL and the NYBCL.

1.2. Closing . The closing of the Merger (the " Closing ") shall take place at the offices of Stradling Yocca Carlson & Rauth at 660 Newport Center Drive, Suite 1600, Newport Beach, California 92660 at the date and time selected by Parent; provided that all of the conditions to Closing set forth in Article 9 of this Agreement shall have been satisfied or waived by the appropriate party; and provided further, that in no event shall the Closing occur later than ten (10) days following satisfaction or waiver of the conditions to Closing, unless the parties hereto agree otherwise. The date on which the Closing actually occurs and the transactions contemplated hereby become effective is hereinafter referred to as the " Closing Date ." At the time of the Closing, Parent, Merger Sub and the Company shall deliver the certificates and other documents and instruments required to be delivered hereunder.

1.3. Effective Time of the Merger . At the Closing, the parties hereto shall (a) cause a certificate of merger in substantially the form of Exhibit B attached hereto (the " Certificate of Merger ") to be executed and filed with the Secretary of State of the State of New York, in accordance with Section 904 of the NYBCL and (b) take all such other and further actions as may be required by the NYBCL or other applicable Law to make the Merger effective. The Merger shall become effective as of the date and time of the filing of the Certificate of Merger. The date and time of such effectiveness are referred to herein as the " Effective Time ."

1.4. Effects of the Merger . Subject to the foregoing, the effects of the Merger shall be as provided in the applicable provisions of the NYBCL.

1.5. Certificate of Incorporation and Bylaws of the Surviving Corporation . The Certificate of Incorporation of the Surviving Corporation shall be the Certificate of Incorporation of the Surviving Corporation, as amended, pursuant to the Certificate of Merger, until thereafter changed or amended as provided therein or in accordance with applicable Law. The Bylaws of Merger Sub as in effect immediately prior to the Effective Time shall be the Bylaws of the Surviving Corporation until thereafter changed or amended as provided therein or in accordance with applicable Law.

1.6. Directors and Officers . The directors and officers of Merger Sub immediately prior to the Effective Time shall be the directors and officers of the Surviving Corporation until their successors shall have been duly elected or appointed and qualified in accordance with applicable Law or until their earlier death, resignation or removal in accordance with the Surviving Corporation’s Certificate of Incorporation and Bylaws.

1.7. Tax Treatment. The parties intend that the Merger, together with the Sideways Merger contemplated in Section 7.6, be treated as a reorganization described in the Code. However, neither Parent nor Company makes any representations or warranties to the other or to any security holder of either entity regarding the tax treatment of the Merger, whether the Merger will qualify as a tax-free "reorganization" under the Code, or any of the tax consequences of this Agreement, the Merger or any of the other transactions or agreements contemplated hereby to Parent or Company or any security holder of either entity. Each party acknowledges that it is relying solely on its own tax advisors in connection with this Agreement, the Merger and the other transactions and agreements contemplated hereby.

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1.8. Tax Withholding. Parent or any agent of the Parent shall be entitled to deduct and withhold from the purchase price or other payment otherwise payable by it pursuant to this Agreement, the amounts required to be deducted and withheld under the Code, or any provision of state, local or foreign tax law, with respect to the making of such payment. To the extent that amounts are so withheld and paid, such withheld and paid amounts shall be treated for all purposes of this Agreement as having been paid by the Parent.

ARTICLE 2

EFFECT OF THE MERGER ON THE CAPITAL STOCK OF COMPANY AND MERGER SUB

2.1. Exchange of Shares. At the Effective Time, by virtue of the Merger and without any action on the part of holders of the capital stock of Merger Sub or the Company:

(a) Cancellation of Treasury Stock and Stock Owned by Parent; Capital Stock of Merger Sub. All shares of capital stock owned by the Company as treasury stock and all shares of capital stock of the Company owned by Parent or Merger Sub shall be cancelled and retired and shall cease to exist and no stock of Parent or other consideration shall be delivered in exchange therefore. Each issued and outstanding share of capital stock of Merger Sub shall by virtue of the Merger and without any action on the part of any holder thereof, be converted into one share of common stock of the Company. Such newly issued shares shall thereafter constitute all of the issued and outstanding capital stock of the Surviving Corporation.

(b) Determination of Merger Consideration. Each issued and outstanding share of the Company Common Stock, issued and outstanding immediately prior to the Effective Time, except as otherwise provided in Section 2.1(a), shall be converted into the right to receive the Merger Consideration as follows:

(i) Non-Contingent Payments. On each date specified below, the Company Payees shall be entitled to receive the amount specified below for such date, subject in each case to adjustment pursuant to Sections 2.1(b)(i)(F) and 2.7 below, for a total aggregate payment of up to Thirty Four Million Dollars ($34,000,000) (collectively, such payments constitute the " Non-Contingent Payments "). The Non-Contingent Payments shall be payable by Parent, as follows:

(A) Closing Payment . At Closing Parent shall pay an aggregate of up to Sixteen Million Dollars ($16,000,000) to the Company Payees, each Company Payee to receive its Pro Rata Portion of such amount (the " Closing Payment "); provided that, to the extent the Revenue of the Company for the period from May 1, 2006 through the last day of the last full month prior to the Closing Date (the " Initial Measurement Period "), divided by the number of full months in such Initial Measurement Period and multiplied by twelve (12), is less than ***, the Closing Payment shall be reduced to the product equal to (X) the Closing Payment, multiplied by (Y) a fraction, (1) the numerator of which is the amount of annualized Revenue during the Initial Measurement Period as calculated above, and (2) the denominator of which is ***.

(B) Second Payment . On or before June 30, 2007, Parent shall pay an aggregate of up to Five Million Dollars ($5,000,000) to the Company Payees, each Company

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Payee to receive its Pro Rata Portion of such amount (the " Second Payment "); provided that, to the extent the Revenue of the Company for the fiscal year ended April 30, 2007 (the " Second Measurement Period ") is less than ***, the Second Payment shall be reduced to the product equal to (X) the Second Payment, multiplied by (Y) a fraction, (1) the numerator of which is the amount of Revenue during the Second Measurement Period, and (2) the denominator of which is ***.

(C) Third Payment . Within sixty (60) days of determining that the Third Revenue Target (as defined below) has been achieved, but in no event earlier than June 30, 2008, Parent shall pay an aggregate of Five Million Dollars ($5,000,000) to the Company Payees, each Company Payee to receive its Pro Rata Portion of such amount (the " Third Payment "). If by October 31, 2008 the Third Revenue Target is not achieved by the Company, then on December 31, 2008 the Parent shall pay to the Company Payees, each in its Pro Rata Portion, a reduced portion of the Third Payment, equal to the product of (X) the Third Payment, multiplied by (Y) a fraction, (1) the numerator of which is the amount of Revenue during the Third Measurement Period (as defined below), and (2) the denominator of which is the Third Revenue Target (as defined below). The " Third Revenue Target " means ***. The " Third Measurement Period " means the period from May 1, 2007 through October 31, 2008.

(D) Fourth Payment . Within sixty (60) days of determining that the Fourth Revenue Target (as defined below) has been achieved, but in no event earlier than June 30, 2009, Parent shall pay an aggregate of Eight Million Dollars ($8,000,000) to the Company Payees, each Company Payee to receive its Pro Rata Portion of such amount (the " Fourth Payment "). If by October 31, 2009, the Fourth Revenue Target is not achieved by the Company, then on December 31, 2009 the Parent shall pay to the Company Payees, each in its Pro Rata Portion, a reduced portion of the Fourth Payment, equal to the product of (X) the Fourth Payment, multiplied by (Y) a fraction, (1) the numerator of which is the amount of Revenue during the Fourth Measurement Period (as defined below), and (2) the denominator of which is the Fourth Revenue Target (as defined below). Notwithstanding the foregoing, in no event shall the aggregate Non-Contingent Payments, when added to the Contingent Payment paid to the Company Payees pursuant to Section 2.1(b)(ii), exceed Forty Two Million ($42,000,000). The " Fourth Revenue Target " means ***. The " Fourth Measurement Period " means the period from May 1, 2007 through October 31, 2009.

(E) Form of the Non-Contingent Payments. Unless otherwise mutually agreed to by Parent and the Representative, fifty percent (50%) of each Non-Contingent Payment shall be payable in cash and fifty percent (50%) shall be payable in shares of Parent Common Stock. For purposes of determining the number of shares of Parent Common Stock to be issued to the Company Payees in connection with the Closing Payment, Parent Common Stock shall be valued at the average of the closing prices of Parent Common Stock as reported on NASDAQ for the twenty (20) trading days ending on October 27, 2006 (the " Deemed Parent Closing Stock Price "), provided , however , that if the average of the closing prices of Parent Common Stock as reported on NASDAQ for the twenty (20) trading days ending on the Closing Date (the " Parent Closing Stock Price ") is higher than the Deemed Parent Closing Stock Price, then the cash portion of the next Non-Contingent Payment shall be reduced by fifty percent (50%) of the product of (i) the difference between the Deemed Parent Closing Stock Price and the Parent Closing Stock Price, times (ii) the aggregate number of shares of Parent Common Stock issued by Parent to the Company Payees at the Closing. For purposes of determining the number of shares of Parent Common Stock to be issued to

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the Company Payees in connection with the Second Payment, Third Payment and Fourth Payment, Parent Common Stock shall be valued at the average of the closing prices of Parent Common Stock as reported on NASDAQ for the twenty (20) trading days ending on the date five (5) days prior to the applicable payment date specified in Section 2.1(b)(i), provided , however , that if the Third Revenue Target is achieved prior to April 30, 2008, or the Fourth Revenue Target is achieved prior to April 30, 2009, then the value of the Parent Common Stock for purposes of the Third Payment or Fourth Payment, as applicable, shall be calculated using the average of the closing prices of Parent Common Stock as reported on NASDAQ for the twenty (20) trading days ending on the last trading day of the calendar quarter in which the Third Revenue Target or the Fourth Revenue Target, as applicable, is determined to have been achieved. In the event the limit on the payment of cash consideration provided in Section 2.1(c) would limit the amount of cash payable, then the amount of the Non-Contingent Payment that would be limited by the fifty percent (50%) limitation contained in Section 2.1(c) shall be paid in Parent Common Stock.

(F) Adjustment of Per Share Non-Contingent Payment. The per share Non-Contingent Payments assume the full exercise of all outstanding Company Options, should the actual number of shares of Company Common Stock outstanding as of the Effective Time differ, the amount of Non-Contingent Payments payable per share shall be adjusted accordingly; provided , however , that in no event shall the aggregate amount of the Non-Contingent Payment exceed Thirty Four Million Dollars ($34,000,000).

(ii) Contingent Payment.

(A) Contingent Payment . In addition to the Non-Contingent Payments, if during the period from May 1, 2008 through April 30, 2009, the Company recognizes Revenue in excess of ***, Parent shall pay the Company Payees an aggregate amount equal to two times the recognized Revenue during such period in excess of ***, provided, however, that such amount, when added to the Non-Contingent Payments actually paid to the Company Payees pursuant to Section 2.1(b)(i), shall in no event exceed Forty-Two Million Dollars ($42,000,000) (the " Contingent Payment "). If earned, the Parent shall pay to each Company Payee its Pro Rata Portion of the Contingent Payment by no later than June 30, 2009, or, if later, within ten (10) days following the date that the amount of the Contingent Payment has been finally determined.

(B) Form of the Contingent Payment. The Contingent Payment shall be payable upon mutual agreement of Parent and the Representative in either cash or Parent Common Stock, valued at the average of the closing prices of Parent Common Stock as reported on NASDAQ for the twenty (20) trading days ending on the date five (5) days prior to the payment date, provided , however , in the event the limit on the payment of cash consideration provided in Section 2.1(c) would limit the amount of cash payable, then the amount of the Contingent Payment that would be limited by the fifty percent (50%) limitation contained in Section 2.1(c) shall be paid in Parent Common Stock.

(iii) Consideration Statements . On or before (i) May 31, 2007, with respect to the Second Payment, (ii) November 30, 2008, or within thirty (30) days following a request by the Representative, which the Representative may not request more than twice, with respect to the Third Payment, (iii) November 30, 2009, or within thirty (30) days following a request by the Representative, which the Representative may not request more than twice, with respect to the Fourth Payment, and (iv) May 31, 2009, with respect to the Contingent Payment, Parent shall deliver

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a statement (the " Consideration Statement ") to the Representative setting forth the amount of the Non-Contingent Payment or Contingent Payment, as applicable, and such reasonable detail required to support the calculation of each payment. The Consideration Statement shall be accompanied by a certificate from the Chief Financial Officer of Parent certifying that the Non-Contingent Payment or the Contingent Payment, as applicable, was calculated by Parent in good faith and in accordance with GAAP, unless agreed otherwise under this Agreement. Within ten (10) days following delivery by Parent of each Consideration Statement, the Representative may deliver to Parent a written notice of any objection thereto (a " Dispute Notice "), which Dispute Notice shall contain a reasonably detailed statement of the basis of such objection. If a Dispute Notice is not delivered within such time period, the Consideration Statement delivered by Parent shall be deemed final and binding on all parties. If a Dispute Notice is timely delivered, then the Representative and the Chief Financial Officer of Parent shall negotiate in good faith to resolve any disagreements. If the Representative and the Chief Financial Officer of Parent are unable to resolve all such disagreements within ten (10) days following delivery of the Dispute Notice, then the Arbitrating Accountants shall determine the amount of the Non-Contingent Payment or Contingent Payment, as applicable. The expense of the Arbitrating Accountants shall be paid by Parent and the Company Payees equally, with the half allocable to the Company Payees reducing the Non-Contingent Payment or Contingent Payment, as applicable, payable to such Company Payees. The results of any such determination shall be final and binding on all parties. Following the delivery of each Consideration Statement and continuing during any period of dispute, the Representative and his agents and advisors shall have reasonable access to the working papers and books and records of Parent, the Company, and their respective representatives relating to the subject of the Consideration Statement.

(c) Limits on Payment of Cash Consideration. Except as set forth in Section 2.1(d), in no event shall the total amount of cash to be paid by Parent as a component of the Merger Consideration, including cash paid pursuant to Sections 2.2 and 2.3, exceed fifty percent (50%) of the total of all Merger Consideration, valuing each share of Parent Common Stock for this purpose at its fair market value on the date each share is payable hereunder, which fair market value shall be the closing price of Parent Common Stock as reported on NASDAQ on the trading day immediately preceding the payment date (the " Parent Share Value "). The forgoing adjustments for purposes of this Section 2.1(c) shall be applied in a manner such that the sum of (x) the total cash payable in exchange for each share of Company Common Stock and (y) the product of the number of shares of Parent Common Stock to be issued in exchange for each share of Company Common Stock, multiplied by the applicable Parent Share Value with respect to such shares shall be equal to the amount of such sum in the absence of any adjustments under this Section 2.1(c). In the event of the perfection of the rights set forth in Section 2.2, Parent shall: (i) estimate the fair market value of all such Dissenting Shares (as that term is defined in Section 2.2) and withhold from the cash component of the Non-Contingent Payments an amount equal to such estimate of fair market value; and (ii) reallocate to the Parent Common Stock component of the Non-Contingent Payments, the number of shares of Parent Common Stock that such Dissenting Shares would have had the right to convert into pursuant to the payment of the Merger Consideration had such dissenting rights not been perfected.

(d) Limit on Number of Shares of Parent Common Stock. Notwithstanding the foregoing provisions, in no event will Parent issue shares of Parent Common Stock to the extent that such issuance would require stockholder approval under applicable NASDAQ Marketplace Rules, as determined in the sole discretion of Parent or as directed by NASDAQ. To the extent the number of shares issuable to the Company Payees is limited, Parent at its sole discretion shall either (i) seek stockholder approval, or (ii) pay the remaining portion of the Non-Contingent Payments and the Contingent Payment in cash, without regard to the limitation set forth in Section 2.1(c), provided that

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in the event of a Change of Control, the Company shall be paid the remaining portions of the Non-Contingent Payments and Contingent Payments payable after the Change of Control in cash.

(e) Consideration Allocations. As an inducement to cause Stephen B.C. Jackson to approve the Merger and the transactions contemplated by this Agreement, the parties hereby agree that the Merger Consideration payable to Mr. Jackson shall be attributed as follows: (a) the cash portion of the Merger Consideration, to the extent available, shall be attributed to the 1,200,000 shares of common stock held by Mr. Jackson and evidenced by certificate number 100, and (b) the equity portion of the Merger Consideration, to the extent available, shall be attributed to the 1,200,000 shares of common stock held by Mr. Jackson and evidenced by certificates numbers 101 and 102.

2.2. Dissenting Shares

(a) Notwithstanding anything to the contrary in this Agreement, each share of Company Common Stock issued and outstanding immediately prior to the Effective Time that is held by any Company Stockholder who has not voted in favor of the Merger, has perfected such holder’s right to an appraisal of such holder’s shares in accordance with the applicable provisions of the NYBCL, as applicable, and has not effectively withdrawn or lost such right to appraisal (a " Dissenting Share "), shall not be converted into the right to receive the Merger Consideration pursuant to Section 2.1(b), but shall be entitled only to such rights as are granted by the applicable provisions of the NYBCL. In the event of the perfection of the rights set forth in this Section 2.2, Parent shall withhold from the cash component of the Merger Consideration an amount equal to the amount set forth in Section 2.1(b)(i) for such Company Stockholder Shares. Any Dissenting Share held by a person at the Effective Time who shall, after the Effective Time, withdraw the demand for appraisal or lose the right of appraisal, in either case pursuant to the NYBCL, shall be deemed to be converted into, as of the Effective Time, the right to receive the Merger Consideration pursuant to Section 2.1(b).

(b) The Company shall give Parent (i) prompt notice of any written demands for appraisal, withdrawals of demands for appraisal and any other instruments served pursuant to the applicable provisions of the NYBCL, relating to the appraisal process received by the Company, and (ii) the opportunity to direct all negotiations and proceedings with respect to demands for appraisal under the NYBCL, with the participation of the Company. The Company will not voluntarily make any payment with respect to any demands for appraisal and will not, except with the prior written consent of Parent, settle or offer to settle any such demands.

2.3. Fractional Shares. No fractional shares of Parent Common Stock shall be issued, but in lieu thereof each Company Payee, who otherwise would be entitled to receive a fraction of a share of Parent Common Stock (after aggregating all fractional shares of Parent Common Stock to be received by such holder), shall receive from Parent an amount of cash (rounded up to the nearest whole cent) equal to the product of the fraction of a share of Parent Common Stock to which such holder would otherwise be entitled, times the closing price for Parent Common Stock on the trading day prior to Closing.

2.4. Treatment of Company Options. The Company shall take all action necessary or required under the Company Option Plan and the option agreements representing the Company Options (the "Option Agreements") to (i) fully accelerate the vesting of all Company Options effective as of immediately prior to the Effective Time; (ii) cause such Company Options to be

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exercised, and if not exercised terminated, effective as of immediately prior to the Effective Time; and (iii) terminate the Company Option Plan effective as of immediately prior to the Effective Time.

2.5. Merger Consideration Certificate . The capitalization of the Company, including outstanding Company Options and the terms thereof, immediately prior to the Effective Time shall be set forth on a certificate to be delivered by the Company to the Parent at Closing (the " Merger Consideration Certificate "). Parent and the Surviving Corporation shall be entitled to rely on the Merger Consideration Certificate in connection with payment of the Merger Consideration. Should the actual number of shares of Company Common Stock or Company Options outstanding as of the Effective Time differ from that set forth on the Merger Consideration Certificate, the amount of Merger Consideration payable per share shall be adjusted accordingly.

2.6. Exchange of Certificates.

(a) Intentionally Omitted.

(b) Company Stock Exchange Procedures . As soon as reasonably practicable after the Effective Time, Parent shall mail to each holder of record of a certificate or certificates which, immediately prior to the Effective Time, represented outstanding shares of Company Common Stock (individually, a " Certificate " and collectively, the " Certificates "), and whose shares are to be exchanged pursuant to Section 2.1 into the right to receive the Merger Consideration: (i) a letter of transmittal (which shall specify that delivery shall be effected, and risk of loss and title to the Certificates shall pass only upon delivery of the Certificates to Parent and shall be in such form and have such other provisions as Parent may reasonably specify) and (ii) instructions for use in effecting the surrender of Certificates in exchange for certificates representing shares of Parent Common Stock constituting the Merger Consideration and cash (both in lieu of fractional shares and as a component of the Merger Consideration). Upon surrender of a Certificate for cancellation to Parent, together with such letter of transmittal duly executed and completed in accordance with its terms, the holder of such Certificate shall be entitled to receive in exchange therefor a certificate representing that number of whole shares of Parent Common Stock constituting the Merger Consideration, the cash component of the Merger Consideration and the cash amount payable in lieu of fractional shares in accordance with Section 2.3, and the Certificate so surrendered shall forthwith be canceled. In no event shall the holder of any Certificate be entitled to receive interest on any funds to be received in the Merger. In the event of a transfer of ownership of Company Common Stock which is not registered in the transfer records of the Company, a certificate representing that number of whole shares of Parent Common Stock constituting the Merger Consideration, any cash component of the Merger Consideration and the cash amount payable in lieu of fractional shares in accordance with Section 2.3, may be paid and issued to a transferee if the Certificate representing such Company Common Stock is presented to Parent accompanied by all documents required to evidence and effect such transfer and by evidence that any applicable stock transfer taxes have been paid. Until surrendered as contemplated by this Section 2.6(b), each Certificate shall be deemed at any time after the Effective Time for all corporate purposes of Parent, except as limited by paragraph (c) below, to represent ownership of the number of shares of Parent Common Stock into which the number of shares of Company Common Stock shown thereon have been converted as contemplated by this Article 2.

(c) Distributions with Respect to Unexchanged Shares. No dividends or other distributions declared or made after the Effective Time with respect to Parent Common Stock with a record date on or after the Effective Time shall be paid to the holder of any unsurrendered Certificate

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with respect to the shares of Parent Common Stock represented thereby and no cash payment in lieu of fractional shares shall be paid to any such holder pursuant to Section 2.3 until the holder of record of such Certificate shall surrender such Certificate in accordance with this Section 2.6. Subject to the effect of applicable laws, following surrender of any such Certificate, there shall be paid to the record holder of the certificates representing whole shares of Parent Common Stock issued in exchange therefor, without interest, (i) at the time of such surrender, the amount of dividends or other distributions, if any, with a record date on or after the Effective Time which theretofore became payable, but which were not paid by reason of the immediately preceding sentence, 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 on or after the Effective Time but prior to surrender and a payment date subsequent to surrender payable with respect to such whole shares of Parent Common Stock.

(d) No Further Ownership Rights in Company Stock . As of the Effective Time the Company Common Stock shall no longer be outstanding and shall automatically be canceled and retired and shall cease to exist, and each holder of Certificates previously representing any such Company Common Stock shall cease to have any rights with respect thereto, except the right to receive the Merger Consideration upon surrender of the certificates representing such Company Common Stock, as contemplated hereby, or pursuant to Section 2.2. From and after the Effective Time, the stock transfer books of the Company shall be closed and there shall be no further registration of transfers on the stock transfer books of the Surviving Corporation of the shares of Company Common Stock which were outstanding immediately prior to the Effective Time. If, after the Effective Time, Certificates are presented to the Surviving Corporation for any reason, they shall be canceled and exchanged as provided in this Section 2.6.

2.7. Working Capital and Cash Adjustments.

(a) Final Working Capital Amount; Final Cash Amount; Adjustments . Within thirty (30) days following the Closing, Parent will provide the Representative with its calculation of the Working Capital of the Company as of the Effective Time (the " Final Working Capital Amount ") and the Cash Balance of the Company as of the Effective Time (the " Final Cash Balance "). (i) To the extent that the Final Working Capital Amount as finally determined pursuant to Section 2.7(b) exceeds the Target Working Capital Amount, the Merger Consideration shall not be increased, (ii) to the extent that the Final Cash Balance as finally determined pursuant to Section 2.7(b) exceeds $1,000,000, the Merger Consideration shall be increased dollar for dollar, plus interest on the amount of such increase at the then Applicable Federal Rate, and (iii) if (A) the Final Working Capital Amount as finally determined pursuant to Section 2.7(b) is less than the Target Working Capital Amount or (B) the Final Cash Balance as finally determined pursuant to Section 2.7(b) is less than $1,000,000 the Merger Consideration shall be decreased dollar for dollar to the extent of such deficiencies, if any, in the aggregate, plus interest on the amount of such decrease at the then Applicable Federal Rate accrued from the Closing Date. The amount of any increase in the Merger Consideration shall be payable to the Company Payees on June 30, 2007. The amount of any decrease in the Merger Consideration shall be set off against the Non-Contingent Payment payable on June 30, 2007 and to the extent the deficiency is greater than the Non-Contingent Payment payable on June 30, 2007, shall be set-off against subsequent Non-Contingent Payments or the Contingent Payment (any such set-off being the " Adjustment ").

(b) Review of Adjustment . The Representative shall have thirty (30) days to review the Parent’s calculation of the Final Working Capital Amount and the Final Cash Balance.

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Parent’s calculation of the Final Working Capital Amount the Final Cash Balance and the Adjustment shall be final and binding upon Parent and the Representative unless the Representative shall dispute the same in writing within such thirty (30) day period. The Representative may dispute the Parent’s calculation of the Final Working Capital Amount, the Final Cash Balance and the Adjustment by specifying in reasonable detail the nature of the disagreement, the basis for such disagreement and its calculation of the Final Working Capital Amount, Final Cash Balance and the Adjustment. In the event the Representative so notifies Parent in writing within such thirty (30) period of any such dispute, Parent and the Representative shall attempt to resolve all such disputes, and the Adjustment shall be adjusted to reflect any such resolution. If Parent and the Representative are unable to resolve all such disputes within fifteen (15) days after such notification, then the matters still in dispute shall be submitted an accounting firm mutually acceptable to Parent and the Representative and if Parent and the Representative are unable to agree on the choice of an accounting firm, then the accounting firm will be a "big-four" accounting firm (or a successor) selected by lot (the " Arbitrating Accountants "); provided however, that any accounting firm that provides services to Parent or an Affiliate shall not qualify for such selection. The Arbitrating Accountants shall resolve all remaining points of disagreement with respect to the Adjustment, which resolution shall be final and binding upon Parent and the Representative, with no right of appeal, and the Adjustment shall be adjusted to reflect any such resolution; provided, however, that the Arbitrating Accountants may only consider those matters identified by Parent and the Representative to be in dispute and may only determine the Adjustment to be an amount equal to the amount proposed by Parent, the amount proposed by the Representative or some amount within the range of the amounts proposed by Parent and the Representative. All fees of the Arbitrating Accountants shall be paid by the party that proposed the Adjustment furthest from the Adjustment determined by the Arbitrating Accountants.

ARTICLE 3

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

The Company represents and warrants to Parent, Merger Sub and Newsub that, except as set forth in the disclosure schedules delivered by the Company to Parent (the " Company Disclosure Schedule ") which have been provided to Parent prior to the date hereof:

3.1. Organization and Good Standing.

(a) The Company is a corporation duly incorporated, validly existing and in good standing under the laws of the State of New York, with full corporate power and authority to conduct its business as it is now being conducted. The Company is duly qualified to do business as a foreign corporation and is in good standing under the laws of each state or other jurisdiction in which either the ownership or use of the properties owned or used by it, or the nature of the activities conducted by it, requires such qualification, except where the failure to be so qualified or to be in good standing would have, individually or in the aggregate, a Material Adverse Effect.

(b) The Company has made available to Parent true and correct copies of the Certificate of Incorporation and Bylaws of the Company. Copies of the minute books containing the records of meetings of the stockholders and the board of directors of the Company have been made available to Parent. The Company is not in default under or in violation of any provision of its governing documents. All corporate decisions of the board of directors and the Company

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Stockholders in general meetings of the Company have been made in accordance with the Company’s governing documents and applicable law in force at the time such decisions were made.

3.2. Authority; No Conflict.

(a) This Agreement constitutes the legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except as such enforcement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other laws of general application affecting enforcement of creditors’ rights or by principles of equity. Upon the execution and delivery by the Company, each of the Transaction Documents will constitute the valid and binding obligation of the Company, enforceable against the Company in accordance with their respective terms, except as such enforcement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other laws of general application affecting enforcement of creditors’ rights or by principles of equity. The Company has all requisite corporate power and authority to execute and deliver this Agreement and the Transaction Documents and to consummate the transactions contemplated hereby and thereby. The execution and delivery of this Agreement by the Company and the consummation by the Company of the transactions contemplated hereby have been duly authorized by the Company’s Board of Directors and the Company Stockholders, and no other corporate action on the part of the Company is necessary to authorize the execution and delivery by the Company of this Agreement or the consummation of the transactions contemplated hereby.

(b) Except as set forth in Schedule 3.2(b), neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated hereby will (i) conflict with or violate the Certificate of Incorporation or Bylaws of the Company, (ii) conflict with or violate any Law applicable to the Company, or Order of any Governmental Authority or arbitrator to which the Company or any of its assets are subject, (iii) breach any provision of, or give any Person the right to declare a default or exercise any remedy under, or to accelerate the maturity or performance of, or payment under, or to cancel, terminate, or modify, any Material Contract or otherwise cause any Person to terminate a material relationship with the Company that would have a Material Adverse Effect; or (iv) result in the imposition or creation of any Lien upon or with respect to any of the assets of the Company that would have a Material Adverse Effect.

(c) Except as set forth in Schedule 3.2(c), the Company is not or will not be required to give any notice to or obtain any consent from any Governmental Authority or from any other Person in connection with the execution and delivery of this Agreement or the consummation of the transactions contemplated hereby.

3.3. Subsidiaries . The Company does not own, directly or indirectly, any equity or other ownership interest in any corporation, partnership, joint venture or other entity or enterprise

3.4. Capitalization .

(a) The authorized capital stock of the Company consists of 25,000,000 shares, of which 1,000,000 are designated as shares of Preferred Stock, and 24,000,000 are designated as shares of Common Stock. As of the date of this Agreement, there are outstanding (i) 3,600,000 shares of Common Stock, (ii) no shares of Preferred Stock, and (ii) Company Options to purchase an aggregate of 436,500 shares of the Company’s Common Stock, of which 380,500 have been issued pursuant to the Company’s Option Plan and 56,000 have been issued outside the Option Plan.

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400,000 shares of the Company’s Common Stock, inclusive of the 380,500 issued, have been reserved for issuance pursuant to the Company’s Option Plan.

(b) All outstanding shares of Company Stock have been duly authorized and validly issued and are fully paid and nonassessable. Except as set forth in this Section 3.4, there are no outstanding (i) shares of capital stock or other voting securities of the Company, (ii) securities of the Company convertible into or exchangeable for shares of capital stock or voting securities of the Company, or (iii) options, restricted stock, stock appreciation rights, other stock based compensation awards or other rights to acquire from the Company, or other obligation of the Company to issue, any capital stock, voting securities or securities convertible into or exchangeable for capital stock or voting securities of the Company. There are no outstanding obligations of the Company to repurchase, redeem or otherwise acquire any securities referred to in clauses (i), (ii) or (iii) above.

(c) As of the date hereof, there are no outstanding bonds, debentures, notes or other indebtedness of the Company having the right to vote (or convertible into or exercisable for Company Stock having the right to vote) on any matters on which stockholders of the Company may vote.

(d) All of the Company Stock was issued or granted in compliance with all applicable federal and state securities laws.

(e) There are no voting agreements or voting trusts between or among any Person or Persons relating to the Company or the Company Stock. The Company is not obligated to issue or repurchase any shares of Company Stock for any purpose and no Person has entered into any Contract (whether preemptive or contractual) for the purchase, subscription or issuance of any unissued shares or other securities of the Company, whether now or in the future.

3.5. Financial Statements.

(a) Attached as Schedule 3.5(a) are true and complete copies of (i) reviewed consolidated balance sheets of the Company as of April 30, 2005 and 2006 and the related reviewed consolidated statements of income, changes in shareholders’ equity and cash flows for the fiscal years then ended, including in each case the notes thereto, together with the report of BDO Seidman LLP, independent certified public accountants, and (ii) an unaudited consolidated balance sheet of the Company (the " Interim Balance Sheet ") as of September 30, 2006 (the " Interim Balance Sheet Date ") and the related unaudited consolidated statements of income, changes in shareholder’ equity and cash flows for the five (5) months then ended (collectively, the financial statements referred to in clauses (i) and (ii) are the " Company Financial Statements "). The Company Financial Statements fairly present in all material respects the consolidated financial condition and the consolidated results of operations, changes in shareholders’ equity, and cash flows of the Company as at the respective dates of and for the periods referred to in the Company Financial Statements. The Company Financial Statements have been prepared in accordance with generally accepted accounting principles for financial reporting in the United States (" GAAP ") applied on a consistent basis, except as noted therein, and, in the case of unaudited financial statements, for the absence of footnotes and other presentation items and for normal year-end adjustments. The Company Financial Statements have been prepared from the books and records of the Company.

(b) Except as set forth in Schedule 3.5(b), the Company does not have any obligations or liabilities (whether accrued, absolute, contingent or otherwise) required to be reflected

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as liabilities on a balance sheet prepared in accordance with GAAP other than (i) liabilities and obligations disclosed on the Interim Balance Sheet; and (ii) liabilities and obligations incurred in the ordinary course of business since the Interim Balance Sheet that would not, individually or in the aggregate, have a Material Adverse Effect.

(c) Since May 1, 2005, neither the Company nor, to the Company’s Knowledge, any director, officer, employee, auditor, accountant or representative of the Company has received or otherwise had or obtained knowledge of any complaint, allegation, assertion or claim, whether written or oral, regarding the accounting practices, procedures, methodologies or methods of the Company or any of its internal controls over financial reporting, including any complaint, allegation, assertion or claim that the Company has engaged in questionable accounting practices. Since May 1, 2005, (i) there have been no changes in the Company’s internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting; and (ii) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting have been reported to the Company’s Board of Directors and the Company’s external auditors, and any such reports are identified in Schedule 3.5(c). To the Company’s Knowledge, there have been no instances of fraud, whether or not material, that occurred during any period covered by the Company Financial Statements involving the management of the Company or other employees of the Company who have a significant role in the Company’s internal control over financial reporting.

(d) To the Company’s Knowledge, no employee of the Company has provided or is providing information to any law enforcement agency regarding the commission or possible commission of any crime or the violation or possible violation of any applicable statute, law, ordinance, rule or regulation of any Governmental Authority having jurisdiction over the Company or any part of its operations. To the Company’s Knowledge, neither the Company, nor any officer, employee, contractor, subcontractor or agent of the Company has discharged, demoted, suspended, threatened, harassed or in any other manner discriminated against an employee of the Company in the terms and conditions of employment because of any act of such employee described in 18 U.S.C. Section 1514A(a).

(e) During the periods covered by the Company’s Financial Statements, the Company’s external auditor was independent of the Company and its management. For purposes of this Section 3.5(e), "independent of the Company and its management" shall mean that the Company and its external auditor complied at all times with the auditor independence requirements of Title II of the Sarbanes-Oxley Act of 2002, the SEC and any regulatory body claiming jurisdiction over the accounting profession as if the Company were an issuer with a class of securities registered pursuant to the Exchange Act during the periods covered by the Company Financial Statements.

(f) Schedule 3.5(f) sets forth any and all reports by the Company’s external auditors to the Company’s Board of Directors, or any committee hereof, or the Company’s management concerning any of the following and pertaining to any period covered by the Company Financial Statements: critical accounting policies, internal control over financial reporting, significant accounting estimates or judgments, alternative accounting treatments and any required communications with the Company’s Board of Directors, or any committee thereof, or management of the Company.

(g) The Company has delivered to Parent the Company Projections. The Company Projections were prepared in good faith based upon assumptions that were reasonable as of

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the date of such financial projections and the Company does not have Knowledge of any facts or circumstances that would be reasonably likely to cause such assumptions to be incorrect, except as set forth on Schedule 3.5(g). The assumptions applied in preparing the Company Projections were reasonable to management as of the date thereof; however, there is no assurance that these assumptions will prove to be valid or that the objectives set forth in the Company Projections will be achieved.

3.6. Absence of Certain Changes . Except as set forth in Schedule 3.6, since May 1, 2006, the business of the Company has been conducted in the ordinary course consistent with past practice and there has not been any:

(a) event, occurrence or development of a state of circumstances or facts which would, individually or in the aggregate, have a Material Adverse Effect on the Company (other than adverse effects arising from the execution and performance of this Agreement or changes in general economic conditions) or any event, occurrence or development which would have a Material Adverse Effect on the ability of the Company to consummate the Merger;

(b) declaration, setting aside or payment of any dividend or other distribution with respect to any shares of capital stock of the Company, or any repurchase, redemption or other acquisition by the Company of any outstanding shares of capital stock or other securities of, or other ownership interests in the Company;

(c) split, combination, re-classification of any Company Stock or any amendment of any term of any outstanding security of the Company;

(d) incurrence, assumption or guarantee by the Company of any indebtedness for borrowed money other than in the ordinary course and in amounts and on terms consistent with past practices;

(e) creation or other incurrence by the Company of any Lien on any Asset or any Tax liability other than in the ordinary course consistent with past practices;

(f) transaction or commitment made, or any contract or agreement entered into, by the Company relating to its Assets or business (including the acquisition or disposition of any Assets) or any relinquishment by the Company of any Contract or other right, in either case, Material to the Company, other than transactions and commitments in the ordinary course consistent with past practices and those contemplated by this Agreement;

(g) change in any method of accounting, method of tax accounting or accounting practice by the Company, except for any such change that is consistent with GAAP or required by reason of a concurrent change in GAAP;

(h) (i) grant of any severance or termination pay to any current or former director, officer or employee of the Company in excess of $5,000, (ii) entering into of any employment, deferred compensation or other similar agreement (or any amendment to any such existing agreement) with any current or former director, officer or employee of the Company, (iii) increase in benefits payable under any existing severance or termination pay policies or employment agreements, (iv) increase in compensation, bonus or other benefits payable or otherwise made available to current or former directors, officers or employees of the Company (other than salary

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increases, or payment of bonuses in the ordinary course of business for employees other than officers and directors), (v) the declaration or payment of any bonuses or year-end payments to any current or former directors, officers or employees of the Company except in the ordinary course of business, or (vi) establishment, adoption, or amendment (except as required by applicable Law), of any collective bargaining, bonus, profit sharing, thrift, pension, retirement, deferred compensation, compensation, stock option, restricted stock or other benefit plan or arrangement covering any current or former director, officer or employee of the Company except in the ordinary course of business;

(i) labor dispute, other than routine individual grievances, or, to the Knowledge of the Company, any activity or proceeding by a labor union or representative thereof to organize any employees of the Company or any lockouts, strikes, slowdowns, work stoppages or threats thereof by or with respect to such employees;

(j) tax election, tax protest, jeopardy assessment or any settlement of tax liability;

(k) asset acquisition or expenditure in excess of $25,000 individually or $50,000 in the aggregate, other than in the ordinary course of business;

(l) payment, prepayment or discharge of liability other than in the ordinary course of business or any failure to pay any liability when due;

(m) write-offs in excess of $10,000 or write-downs in excess of $10,000 of any Assets of the Company;

(n) creation, termination or amendment of, or waiver of any right by the Company under, any Material Contract of the Company;

(o) damage, destruction or loss having, or reasonably expected to have, a Material Adverse Effect on the Company;

(p) loan to or other extension of credit to any Company Employee or increase the aggregate amount of any loan outstanding to any Company Employee; or

(q) an agreement or commitment to do any of the foregoing.

3.7. Real Property.

(a) The Company does not own any real property.

(b) Schedule 3.7(b) lists (i) all real property with respect to which the Company holds a leasehold interest or subleasehold interest, or otherwise has a license to use (the " Company Leased Real Property "), and (ii) each agreement under which the Company leases or otherwise has the right to use any Company Leased Real Property, listing, with respect to each such agreement, the date of the agreement and any amendments thereto, the names of the parties to the agreement, the addresses of the Company Leased Real Property, the annual and per month rental obligations of the Company and any other expenses or payments required to be paid or actually paid in connection with the Company Leased Real Property during fiscal year 2005 or the eight month period ended August 31, 2006. Except as set forth in Schedule 3.7(b), the Company has not entered into any subleases,

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arrangements, licenses or other agreements relating to the use or occupancy of all or any portion of the Company Leased Real Property by any Person other than the Company.

(c) Except as would not, individually or in the aggregate, have a Material Adverse Effect, (i) the Company Leased Real Property conforms to all applicable fire, safety, zoning and building laws and ordinances, and other applicable Laws, and (ii) there are no pending or, to the Knowledge of the Company, threatened eminent domain, condemnation or other Proceedings affecting the Company Leased Real Property that would result in the taking of all or any part of the Company Leased Real Property or that would prevent or hinder the continued use of the Company Leased Real Property as currently used in the conduct of the Company’s business.

3.8. Tangible Personal Property.

(a) The Company has good and marketable title to, free and clear of all Liens other than Permitted Liens, or a valid right to use, all material machinery, equipment and tangible personal property used or held for use in connection with the Company’s business (including all tangible personal property reflected in the Interim Balance Sheet or acquired since the Interim Balance Sheet Date).

(b) All furniture, fixtures, vehicles, computer systems, equipment, and other tangible personal property owned or leased by the Company and used in its operations (collectively, the "Equipment") are in good operating condition (ordinary wear and tear excepted) and repair. Such personal property is not held other than in the possession of the Company. Schedule 3.8(b) is a true and correct copy of the Company’s depreciation schedule which it maintains in the ordinary course of business relating to its Equipment and which identifies items of Equipment which have a value in excess of $10,000.

3.9. Taxes.

(a) Except as set forth in (or resulting from matters set forth in) Schedule 3.9 of the Company Disclosure Schedule:

(i) the Company has prepared and timely filed with the appropriate governmental agencies all franchise, income and all other Tax returns and reports required to be filed on or before the Effective Time (collectively the " Returns "), taking into account any extension of time to file granted to or obtained on behalf of the Company;

(ii) all Taxes required to be paid by the Company have been timely paid in full to the proper authorities, other than such Taxes against which adequate reserves have been made in the Company’s books and records;

(iii) all deficiencies resulting from jeopardy assessments and/or Tax examinations of income, sales and franchise and all other Returns filed by the Company in any jurisdiction in which such Returns are required to be so filed and which are due or payable on or before the date hereof have been paid and the Company has not received notice of any claim by any authority in a jurisdiction where the Company does not file Returns that the Company is or may be subject to taxation by that jurisdiction;

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(iv) no deficiency has been asserted or assessed against the Company which has not been satisfied or otherwise resolved, no examination of the Company is pending or, to the Knowledge of the Company, threatened for any Tax by any taxing authority and there is no dispute or claim concerning any Tax liability of the Company either claimed by any taxing authority in writing, or to the Knowledge of the Company, reasonably expected to be claimed;

(v) no extension of the period for assessment or collection of any Tax is currently in effect and no extension of time within which to file any Return has been requested;

(vi) all Returns filed by the Company are correct and complete in all respects or adequate reserves have been established with respect to any additional Taxes that may be due (or may become due) as a result of such Returns not being correct or complete;

(vii) no Company Asset is subject to a lien for Taxes;

(viii) the Company has never been a member of a consolidated, combined, unitary or aggregate group for Tax purposes. The Company has no liability for the Taxes of any person under Section 1.1502-6 of the Treasury Regulations (or any similar provision of state, local or foreign law) as a transferee or successor, by contract or otherwise

(ix) the Company has not: (A) executed, become subject to, or entered into any closing agreement pursuant to Section 7121 of the Code or any similar or predecessor provision thereof under the Code or other Tax Law, or (B) received approval to make or agreed to a change in accounting method;

(x) no Company Asset is property that is required to be treated as being owned by any other Person pursuant to the so-called "safe harbor lease" provisions of former Section 168(f)(8) of the Code; the Company has not agreed to make, nor are they required to make, any adjustment under Section 481(a) of the Code by reason of a change in accounting method or otherwise; and the Company is not a party to any joint venture, partnership, or other similar arrangement;

(xi) the Company has not entered, nor does it plan to enter into, any related party transactions;

(xii) the Company has made timely payments of the Taxes required to be deducted and withheld in connection with amounts paid or owing to any employee, independent contractor, creditor, stockholder, or other third party;

(xiii) the Company is not a party to or bound by any Tax sharing, Tax indemnity, or Tax allocation agreement nor does the Company have any liability or potential liability to another party under any such agreement;

(xiv) the 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;

(xv) the Company has not filed any disclosures under Section 6662 or comparable provisions of state, local or foreign law to prevent the imposition of penalties with respect to any Tax reporting position taken on any Tax Return. The Company has not consummated,

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has participated in, or is currently participating in any transaction which was or is a "Tax shelter" transaction as defined in Sections 6662, 6011, 6012 or 6111 of the Code or the Treasury Regulations promulgated thereunder;

(xvi) the Company has not constituted either a "distributing corporation" or a "controlled corporation" in a distribution of stock intending to qualify for tax-free treatment under Section 355 of the Code; and

(xvii) the Company has not incurred a dual consolidated loss within the meaning of Section 1503 of the Code.

(b) The Company is not a party to any agreement, contract, or arrangement that would, as a result of the transactions contemplated hereby, result, separately or in the aggregate, in (i) the payment of any "excess parachute payments" within the meaning of Section 280G of the Code by reason of the Merger, or (ii) the payment of any form of compensation or reimbursement for any Tax incurred by any Person arising under Section 280G of the Code, or (iii) the payment of any amounts not deductible by the Company, in whole or in part, by reason of Section 162(m) of the Code.

3.10. Employees.

(a) There is no collective bargaining agreement in effect between the Company and any labor unions or organizations representing any of the employees of the Company. Since January 1, 2006, the Company has not experienced any organized slowdown, work interruption strike or work stoppage by their employees, and, to the Knowledge of the Company, there is no strike, labor dispute or union organization activities pending or threatened affecting the Company.

(b) The Company is in compliance with all applicable Laws regarding employment and employment practices, terms and conditions of employment, wages and hours, anti-discrimination and occupational health and safety, including laws concerning unfair labor practices within the meaning of Section 8 of the National Labor Relations Act, as amended, and the employment of non-residents under the Immigration Reform and Control Act of 1986, as amended, except for any such non-compliance that would not have a Material Adverse Effect.

(c) Except as set forth in Schedule 3.10(c), the Company is not a party to any employment, non-competition or severance contract or agreement with any employee of the Company.

(d) Except as set forth on Schedule 3.10(d), to the Knowledge of the Company, no key executive employee and no group of employees or independent contractors of the Company has any plans to terminate his, her, or their employment or relationship with the Company, other than in connection with the transactions contemplated by this Agreement.

(e) Schedule 3.10(e) sets forth a complete and accurate list of the name of each officer and employee of the Company, together with such person’s position or function, annual base salary or wages and any incentives or bonus arrangement with respect to such person. The Company has not received notice, nor does it have Knowledge, that any such person will or may cease to be engaged by the Company for any reason, including because of the consummation of the transactions contemplated by this Agreement.

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3.11. Employee Benefits.

(a) Schedule 3.11(a) lists all employment, consulting, executive compensation, bonus, deferred compensation, incentive compensation, stock purchase, stock option or other equity-based, retention, change in control, severance or termination pay, hospitalization or other medical, life or other insurance, supplemental unemployment benefits, profit-sharing, pension or retirement plans, programs, agreements or arrangements, and each other fringe or other employee benefit plan, program, agreement or arrangement (including any "employee benefit plan", within the meaning of Section 3(3) of ERISA), sponsored, maintained or contributed to or required to be contributed to by the Company or by any ERISA Affiliate for the benefit of any employee or former employee of the Company, or with respect to which the Company otherwise has any liabilities or obligations (the " Benefit Plans ").

(b) With respect to each of the Benefit Plans, the Company has made available to Parent complete copies of each of the following documents; (i) a copy of all documents evidencing each Benefit Plan (including any amendments thereto); (ii) a copy of the Form 5500 and annual report, if any, required under ERISA or the Code for each of the three most recent plan years; (iii) a copy of the most recent summary plan description, if any, required under ERISA; (iv) if the Benefit Plan is intended to be qualified under Section 401(a) of the Code, the most recent determination, opinion, notification and advisory letters received from the Internal Revenue Service with respect to each such plan; (v) if the Benefit Plan is subject to the minimum funding standards of Section 302 of ERISA, the most recent annual and periodic accounting of plan assets and liabilities for such plan; (vi) the three most recent plan years discrimination tests (if any) for each Benefit Plan; and (vii) a written description of each Benefit Plan that is not in writing and written descriptions of all non-written agreements relating to the Benefit Plans.

(c) No Benefit Plan is a "multiemployer plan," as such term is defined in Section 3(37) of ERISA, or a plan that is subject to Title IV of ERISA or similar rights under state law.

(d) None of the Benefit Plans that are "welfare benefit plans," within the meaning of Section 3(1) of ERISA, provide for continuing benefits or coverage after termination or retirement from employment, except for COBRA rights under a "group health plan" as defined in Section 4980B(g) of the Code and Section 607 of ERISA.

(e) Each Benefit Plan is and has been maintained and administered in compliance with its terms and with the applicable requirements of ERISA, the Code and any other applicable Laws, other than any such non-compliance that would not have a Material Adverse Effect. Neither the Company, nor to the Company’s Knowledge, any other Person, has engaged in any transaction with respect to any Benefit Plan that would be reasonably likely to subject the Company to any Tax or penalty (civil or otherwise) imposed by ERISA, the Code or other applicable Laws that would have a Material Adverse Effect. Each Benefit Plan that is intended to be qualified under Section 401(a) of the Code has received a determination from the Internal Revenue Service that it is so qualified and, to the Knowledge of the Company, there are no facts or circumstances that would be reasonably likely to adversely affect the qualified status of any such Benefit Plan.

(f) Except as set forth in Schedule 3.11(f), the consummation of the transactions contemplated hereby will not result in an increase in or accelerate the vesting of any of the benefits available under any Benefit Plan.

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(g) There are no pending or, to the Knowledge of the Company, threatened, Proceedings that have been asserted relating to any Benefit Plan by any employee or beneficiary covered under any Benefit Plan or otherwise involving any Benefit Plan (other than routine claims for benefits). To the Knowledge of the Company, no examination or audit of any Benefit Plan by any Governmental Authority is currently in progress or threatened. The Company is not a party to any agreement or understanding with the Pension Benefit Guaranty Corporation, the Internal Revenue Service or the Department of Labor.

3.12. Compliance with Laws. Except as set forth in Schedule 3.12, (i) the Company is, and has been, in compliance in all material respects with all applicable Laws, and (ii) the Company has not received any written notice or other written communication from any Governmental Authority regarding any actual or alleged violation of any applicable Law (excluding, for purposes of clause (i) and clause (ii) of this Section 3.12, the Company’s (a) compliance with the Code and other Laws regarding Tax matters, which is covered under Section 3.9, (b) compliance with ERISA and other Laws regarding employee benefit matters, which is covered under Section 3.11, and (c) compliance with Environmental Laws, which is covered under Section 3.15).

3.13. Governmental Authorizations. Schedule 3.13 contains a true and complete list and summary description of each authorization, license, or permit issued or granted by or under the authority of any Governmental Authority or pursuant to any Law (but specifically excluding any general business licenses) (the " Governmental Authorizations ") that is held by the Company. Each such Governmental Authorization is valid and in full force and effect. The Company has made available to Parent copies of all such Governmental Authorizations. Except as set forth in Schedule 3.13, the Company is, and has been, in compliance in all material respects with all such Governmental Authorizations. Except as set forth in Schedule 3.13, the Company has not received any written notice or other written communication from any Governmental Authority regarding (i) any actual or alleged violation of or failure to comply with any term or requirement of any such Governmental Authorization, or (ii) any actual, proposed, or potential revocation, suspension, cancellation or termination of, or modification to any such Governmental Authorization, other than, in either such case, any non-compliance, violations, revocations, suspensions, cancellations or terminations that, individually or in the aggregate, would not have a Material Adverse Effect. The Governmental Authorizations listed in Schedule 3.13 collectively constitute all of the Governmental Authorizations necessary to permit the Company to lawfully conduct and operate its business in the manner it is currently conducted, except where the absence of any Governmental Authorizations, individually or in the aggregate, would not have a Material Adverse Effect. No loss or expiration of any Governmental Authorization is pending or, to the Knowledge of the Company, threatened or reasonably foreseeable, other than expiration in accordance with the terms thereof.

3.14. Legal Proceedings; Orders.

(a) Except as set forth in Schedule 3.14(a), there are no claims, actions, suits proceedings or, to the Knowledge of the Company, investigations, commenced, brought, conducted, or heard by or before, or otherwise involving, any Governmental Authority (a " Proceeding ") pending or, to the Knowledge of the Company, threatened by or against the Company (or against any of its officers, directors, agents or employees (in each case, in their capacity as such)) or that otherwise relate to the Company’s business or that would be reasonably likely to adversely affect or restrict the Company’s ability to consummate the transactions contemplated by the Agreement. Except as set forth in Schedule 3.14(a), to the Knowledge of the Company, there is no reasonable basis for any of the foregoing.

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(b) Except as set forth in Schedule 3.14(b), there are no Orders outstanding or, to the Knowledge of the Company, threatened, against it.

3.15. Environmental Matters.

(a) The Company is and has been in compliance with all Environmental Laws, except where any such non-compliance, individually or in the aggregate, would not have a Material Adverse Effect. To the Knowledge of the Company, there has not been any emission, disposal, discharge or other release of any Hazardous Materials from any Leased Property or, during the period of the Company’s ownership or lease thereof, from any property formerly owned or leased by the Company.

(b) The Company has not received any citation, notice or other communication in writing from regarding any alleged or actual violation of any Environmental Law or any alleged or actual obligation to undertake or bear the cost any liabilities under any Environmental Law. There are no Orders or Proceedings pending or, to the Knowledge of the Company, threatened, against the Company relating to any alleged or actual violation of any Environmental Law or any alleged or actual obligation to undertake or bear the cost any liabilities under any Environmental Law.

(c) The Company, neither this Agreement nor the consummation of the transactions contemplated hereby shall impose any obligations on the Company or otherwise for site investigation or cleanup, or notification to or consent of any government agencies or third parties under any Environmental Laws (including, without limitation, any so called "transaction-triggered" or "responsible property transfer" laws and regulations).

(d) None of the following exists at any property or facility owned, occupied, or operated by the Company: (i) underground storage tanks or surface impoundments; (ii) asbestos-containing material in any form or condition; (iii) materials or equipment containing polychlorinated biphenyls; or (iv) landfills.

(e) The Company has never treated, stored, disposed of, arranged for or permitted the disposal of, transported, handled, or "Released" (as defined in the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended " CERCLA ") pursuant to the conduct of its business any substance (including, without limitation, any Hazardous Materials) or owned, occupied, or operated any facility or property used in the conduct of its business, so as to give rise to liabilities of the Company for response costs, natural resource damages, or attorneys’ fees pursuant to CERCLA or any other Environmental Laws, except to the extent in compliance with Environmental Laws.

(f) Without limiting the generality of the foregoing, no facts, events, or conditions relating to the past or present properties or facilities used in the conduct of the Company’s business, or operations of the Company in the conduct of its business shall give rise to any material corrective, investigatory, or remedial obligations pursuant to Environmental Laws, or give rise to any other liabilities (whether accrued, absolute, contingent, unliquidated, or otherwise) pursuant to Environmental Laws, including, without limitation, those liabilities relating to onsite or offsite Releases or threatened Releases of Hazardous Materials, substances or wastes, personal injury, property damage, or natural resources damage.

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(g) The Company has not, either expressly or by operation of law, assumed or undertaken any liability or corrective investigatory or remedial obligation of any other Person in connection with the conduct of its business relating to any Environmental Laws.

3.16. Illegal Payments. In the conduct of its business, neither the Company nor, to the Knowledge of the Company, any other Person has, directly or indirectly, on behalf of or with respect to the Company, engaged in any transaction or made or received any payment which was not properly recorded in the books and records of such entity, including any unrecorded or misrecorded payment to any insurance agent, adjuster or such other third party which reasonably could be construed to be an unlawful kickback, referral fee or similar payment.

3.17. Insurance. Schedule 3.17 contains a true and complete list of (a) all policies of property, fire and casualty, products liability, workers’ compensation, and other forms of insurance under which the Company is an insured or beneficiary as of the date hereof and (b) all claims under such policies exceeding, on an individual basis, $100,000, since January 1, 2005. All such policies are in full force and effect, no notice of default termination has been received in respect thereof, and all premiums due thereupon have been paid. Such policies, taken together, comply with applicable Laws. The consummation of the transactions contemplated by this Agreement will not affect the costs, premiums or insurance-related ratings under the foregoing insurance policies. True and complete copies of such insurance policies have been made available to Parent.

3.18. Material Contracts; No Defaults.

(a) Schedule 3.18(a) lists each of the following contracts and agreements to which the Company is party or is bound as of the date hereof, excluding the agreements disclosed in Schedule 3.7(b), Schedule 3.10(c) and Schedule 3.19(b) (such contracts and agreements, together with the agreements disclosed in Schedule 3.7(b), Schedule 3.10(c) and Schedule 3.19(b), the " Material Contrac