Ats Money Systems Inc – ‘PREM14A’ for 4/9/01 – EX-99.1

On:  Monday, 4/9/01, at 5:10pm ET   ·   For:  4/9/01   ·   Accession #:  1019056-1-500049   ·   File #s:  0-17773 (PRE 14A), 0-17773   ·   Correction:  This Filing’s “Filed as of” Date was Corrected and “Changed as of” 11/15/02 by the SEC on 11/15/02. ®

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Preliminary Proxy Solicitation Material — Merger or Acquisition   —   Schedule 14A
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: PRE 14A     Preliminary14A                                        60    264K 
 2: EX-99.1     Miscellaneous Exhibit                                 75    287K 
 3: EX-99.2     Miscellaneous Exhibit                                 15     70K 

EX-99.1   —   Miscellaneous Exhibit
Exhibit Table of Contents

EX-99.1
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                                                                         ANNEX 1

 TABLE OF CONTENTS

                                                                            Page

1.   DEFINITIONS..............................................................2 
    Accounts Receivable......................................................2
    Acquired Company.........................................................2
    Acquired Company's Accountant............................................2
    Acquired Company's Closing Documents.....................................2
    Acquired Company Common Shares...........................................3
    Acquired Company Shareholder Meeting.....................................3
    Acquisition Company......................................................3
    Acquisition Company's Common Shares......................................3
    Adjusted Purchase Price..................................................3
    ADR Service Provider.....................................................3
    Agent....................................................................3
    Aggregate Amount.........................................................3
    Agreement................................................................3
    Announcement Date........................................................3
    Applicable Contract......................................................3
    Articles of Merger.......................................................3
    Authorized Acquired Company Common Shares................................3
    Best Efforts.............................................................3
    Breach...................................................................4
    Buyer....................................................................4
    Buyer's Accountants......................................................4
    Buyer's Closing Documents................................................4
    Cash.....................................................................4
    CEO Certificate..........................................................4
    Closing..................................................................4
    Closing Date.............................................................4
    Competing Business.......................................................4
    Competing Transaction....................................................4
    Consent..................................................................4
    Constituent Corporations.................................................4
    Contemplated Transactions................................................4
    Contract.................................................................5
    Copyright................................................................5
    Covered Parties..........................................................5
    D&O Policies.............................................................5
    Damages..................................................................5
    Disclosure Letter........................................................5
    Discovery................................................................5
    Dispute..................................................................5
    Dissenter................................................................5
    Dissenter List...........................................................5
    DLR Balance Sheet........................................................5
    Earnings.................................................................6

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    Effective Time...........................................................6
    Eligible Claims..........................................................6
    Employment Agreements....................................................6
    Encumbrance..............................................................6
    Environment..............................................................6
    Environmental, Health, and Safety Liabilities............................6
    Environmental Law........................................................7
    ERISA....................................................................7
    Escrow Agreement.........................................................7
    Escrow Amount............................................................7
    Escrowed Purchase Price..................................................7
    Escrowed Purchase Price Per Share........................................7
    Excess Transaction Expenses..............................................7
    Exchange Act.............................................................7
    Facilities...............................................................7
    Final Earnings Per Share.................................................8
    Final Results Statement..................................................8
    Financial Statements.....................................................8
    Final Financial Statement................................................8
    Fully Diluted Number of Shares...........................................8
    Fully Diluted Pro Rata Portion...........................................8
    GAAP.....................................................................8
    Governmental Authorization...............................................8
    Governmental Body........................................................8
    Hazardous Activity.......................................................9
    Hazardous Materials......................................................9
    HSR Act..................................................................9
    Indemnified Person.......................................................9
    Indemnity Escrow Fund....................................................9
    Initial Escrow Fund......................................................9
    Initial Purchase Price...................................................9
    Initial Price Per Share..................................................9
    Intellectual Property Assets.............................................9
    Interim Earnings Per Share...............................................9
    Interim Results Statement................................................9
    IRC......................................................................9
    IRS......................................................................9
    Key Employees............................................................9
    Knowledge...............................................................10
    Legal Requirement.......................................................10
    Marks...................................................................10
    Merger..................................................................10
    Merger Announcement Letter..............................................10
    Nevada Corporation Act..................................................10
    New Jersey Business Corporation Act" or "NJBCA\.........................10

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    Nondisclosure Agreement.................................................10
    Occupational Safety and Health Law......................................10
    Option or Options.......................................................10
    Option Letter of Transmittal............................................10
    Option List.............................................................10
    Option Payment..........................................................10
    Option Shares...........................................................11
    Order...................................................................11
    Ordinary Course of Business.............................................11
    Organizational Documents................................................11
    Outstanding Acquired Company Common Shares..............................11
    Patents.................................................................11
    Paying Agent............................................................11
    Paying Agent Agreement..................................................11
    Person..................................................................12
    Plan....................................................................12
    Post Closing Interest...................................................12
    Pre-Closing Escrow Interest.............................................12
    Price Calculations......................................................12
    Price Documentation.....................................................12
    Proceeding..............................................................12
    Proxy Statement.........................................................12
    Purchase Price..........................................................12
    Purchase Price Per Share................................................12
    Record Shareholders List................................................12
    Related Person..........................................................12
    Release.................................................................13
    Representative..........................................................13
    Review Accountants......................................................13
    Rights in Mask Works....................................................13
    Share Certification.....................................................13
    Share Letter of Transmittal.............................................13
    Shareholder.............................................................13
    Shareholder Information.................................................13
    Shareholders Representative.............................................13
    Securities Act..........................................................13
    Stop Transfer List......................................................13
    Subsidiary..............................................................13
    Surviving Corporation...................................................13
    Tax.....................................................................14
    Tax Return..............................................................14
    Termination Payment.....................................................14
    Threat of Release.......................................................14
    Threatened..............................................................14
    Trade Secrets...........................................................14
    Transaction Expenses....................................................14
    Unsolicited Proposal....................................................14

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2.   NAME OF SURVIVING CORPORATION; ARTICLES OF ORGANIZATION; BY-LAWS;          
    DIRECTORS; CLOSING......................................................15
    2.1    NAME OF SURVIVING CORPORATION....................................15
    2.2    ARTICLES OF INCORPORATION........................................15
    2.3    BY-LAWS..........................................................15
    2.4    DIRECTORS........................................................15
    2.5    OFFICERS.........................................................15
    2.6    CLOSING..........................................................15
3.   STATUS AND CONVERSION OF SECURITIES.....................................15 
    3.1    AUTHORIZED CAPITALIZATION OF SURVIVING CORPORATION...............15
    3.2    EFFECT ON CAPITAL STOCK..........................................15
    3.3    TREATMENT OF OPTIONS.............................................16
    3.4    DETERMINATION AND PAYMENT OF THE PURCHASE PRICE..................17
    3.5    PAYING AGENT.....................................................18
4.   CERTAIN EFFECTS OF MERGER...............................................19 
5.   CLOSING OBLIGATIONS.....................................................19 
    5.1    ACQUIRED COMPANY'S DELIVERIES....................................19
    5.2    BUYER'S DELIVERIES...............................................21
6.   ADJUSTMENT TO PURCHASE PRICE............................................21 
    6.1    ADJUSTED PURCHASE PRICE..........................................21
    6.2    ESCROWS..........................................................23
7.   REPRESENTATIONS AND WARRANTIES OF ACQUIRED COMPANY......................23 
    7.1    ORGANIZATION AND GOOD STANDING...................................24
    7.2    AUTHORITY; NO CONFLICT...........................................24
    7.3    CAPITALIZATION...................................................25
    7.4    FINANCIAL STATEMENTS.............................................26
    7.5    BOOKS AND RECORDS................................................26
    7.6    TITLE TO PROPERTIES; ENCUMBRANCES................................26
    7.7    CONDITION AND SUFFICIENCY OF ASSETS..............................27
    7.8    ACCOUNTS RECEIVABLE..............................................27
    7.9    INVENTORY........................................................27
    7.10   NO UNDISCLOSED LIABILITIES.......................................27
    7.11   TAXES............................................................28
    7.12   NO MATERIAL ADVERSE CHANGE.......................................29
    7.13   EMPLOYEE BENEFITS................................................29
7.14   COMPLIANCE WITH LEGAL REQUIREMENTS; GOVERNMENTAL               
           AUTHORIZATIONS...................................................33
    7.15   LEGAL PROCEEDINGS; ORDERS........................................34
    7.16   ABSENCE OF CERTAIN CHANGES AND EVENTS............................35
    7.17   CONTRACTS; NO DEFAULTS...........................................36
    7.18   INSURANCE........................................................39
    7.19   ENVIRONMENTAL MATTERS............................................40
    7.20   EMPLOYEES........................................................42

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    7.21   LABOR RELATIONS; COMPLIANCE......................................43
    7.22   INTELLECTUAL PROPERTY............................................43
    7.23   CERTAIN PAYMENTS.................................................46
    7.24   DISCLOSURE.......................................................47
    7.25   RELATIONSHIPS WITH RELATED PERSONS...............................47
    7.26   BROKERS OR FINDERS...............................................47
    7.27   HSR ACT..........................................................47
    7.28   PRODUCT DESIGN; WARRANTIES.......................................47
    7.29   PROXY MATERIALS..................................................48
    7.30   SECURITIES LAW COMPLIANCE........................................48
8.   REPRESENTATIONS AND WARRANTIES OF BUYER.................................48 
    8.1    ORGANIZATION AND GOOD STANDING...................................48
    8.2    AUTHORITY; NO CONFLICT...........................................48
    8.3    FINANCIAL STATEMENTS.............................................49
    8.4    FINANCIAL ABILITY................................................50
    8.5    NO MATERIAL ADVERSE CHANGE.......................................50
    8.6    DISCLOSURE.......................................................50
    8.7    INVESTMENT INTENT................................................50
    8.8    CERTAIN PROCEEDINGS..............................................50
    8.9    BROKERS OR FINDERS...............................................51
    8.10   INFORMATION IN PROXY STATEMENT...................................51
    8.11   TERMINATION PAYMENT..............................................51
9.   COVENANTS OF THE ACQUIRED COMPANY OR THE SUBSIDIARY PRIOR TO               
    CLOSING DATE............................................................51
    9.1    ACCESS AND INVESTIGATION.........................................51
    9.2    OPERATION OF THE BUSINESSES OF THE ACQUIRED COMPANY..............52
    9.3    REQUIRED APPROVALS...............................................52
    9.4    PAYMENT OF INDEBTEDNESS BY RELATED PERSONS.......................52
    9.5    NO SOLICITATION..................................................52
    9.6    BEST EFFORTS.....................................................54
    9.7    ACQUIRED COMPANY SHAREHOLDER MEETING.............................54
    9.8    EXISTING STOCK OPTION PLANS......................................55
10.  COVENANTS OF BUYER PRIOR TO CLOSING DATE................................55 
    10.1   APPROVALS OF GOVERNMENTAL BODIES.................................55
    10.2   NOTIFICATION.....................................................55
    10.3   FINANCIAL ABILITY................................................56
    10.4   BEST EFFORTS.....................................................56
    10.5   INDEMNIFICATION AND INSURANCE....................................56
    10.6   PROXY MATERIALS..................................................56
11.  CONDITIONS PRECEDENT TO BUYER'S OBLIGATION TO CLOSE.....................56 
    11.1   ACCURACY OF REPRESENTATIONS......................................57
    11.2   ACQUIRED COMPANY'S PERFORMANCE...................................57
    11.3   CONSENTS.........................................................57
    11.4   DISSENTER'S RIGHTS...............................................57
    11.5   NO PROHIBITION...................................................57
    11.6   NO PROCEEDINGS...................................................58
    11.7   SHAREHOLDER CONSENT..............................................58

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12.  CONDITIONS PRECEDENT TO THE OBLIGATION OF THE ACQUIRED COMPANY TO          
    CLOSE...................................................................58
    12.1   ACCURACY OF REPRESENTATIONS......................................58
    12.2   BUYER'S PERFORMANCE..............................................58
    12.3   CONSENTS.........................................................58
    12.4   NO PROCEEDINGS...................................................58
    12.5   NO PROHIBITION...................................................59
    12.6   DISSENTER'S RIGHTS...............................................59
    12.7   SHAREHOLDER CONSENT..............................................59
13.  TERMINATION AND REMEDIES................................................59 
    13.1   TERMINATION EVENTS...............................................59
    13.2   ELECTION TO CLOSE................................................61
    13.3   EFFECT OF TERMINATION............................................61
14.  INDEMNIFICATION; REMEDIES...............................................62 
    14.1   SURVIVAL; RIGHT TO INDEMNIFICATION NOT AFFECTED BY KNOWLEDGE.....62
    14.2   INDEMNIFICATION AND PAYMENT OF DAMAGES BY ACQUIRED COMPANY.......62
    14.3   TIME LIMITATION..................................................62
    14.4   LIMITATIONS ON AMOUNT............................................62
    14.5   ELIGIBLE CLAIMS AND AGGREGATE AMOUNT.............................63
    14.6   PROCEDURE FOR INDEMNIFICATION--THIRD PARTY CLAIMS................63
    14.7   PROCEDURE FOR INDEMNIFICATION--OTHER CLAIMS......................63
15.  GENERAL PROVISIONS......................................................64 
    15.1   EXPENSES.........................................................64
    15.2   PUBLIC ANNOUNCEMENTS.............................................64
    15.3   NONDISCLOSURE....................................................64
    15.4   NOTICES..........................................................64
    15.5   JURISDICTION; SERVICE OF PROCESS.................................66
    15.6   FURTHER ASSURANCES...............................................66
    15.7   WAIVER...........................................................66
    15.8   ENTIRE AGREEMENT AND MODIFICATION................................67
    15.9   ASSIGNMENTS, SUCCESSORS, AND NO THIRD-PARTY RIGHTS...............67
    15.10  SEVERABILITY.....................................................67
    15.11  SECTION HEADINGS, CONSTRUCTION...................................67
    15.12  GOVERNING LAW....................................................67
    15.13  COUNTERPARTS.....................................................68

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  AMENDED AGREEMENT AND PLAN OF MERGER

         AMENDED AGREEMENT AND PLAN OF MERGER ("AGREEMENT") dated as of March 1,
2001 as amended by an Amendment to Agreement and Plan of Merger dated as of     
April___, 2001, by and among:                                                   

          ATS MONEY SYSTEMS, INC., a Nevada corporation (the "ACQUIRED
COMPANY");                                                    

      ATSMACO INC., a New Jersey corporation (the "ACQUISITION
         COMPANY") and De La Rue Inc., a Virginia Corporation ("DE LA RUE") (the
         Acquisition Company and De La Rue being collectively referred to as the
"BUYER"); and                                                 

       WHEREAS, the Acquired Company is a corporation organized and existing
under the laws of the State of Nevada, its articles of incorporation having been
filed therein under the name of More Creative Mergers, Inc. on August 28, 1987; 
and                                                                             

 WHEREAS, the Acquisition Company is a corporation organized and
existing under the laws of the State of New Jersey, its articles of             
incorporation having been filed therein on February 1, 2000; and                

       WHEREAS, the authorized capital stock of Acquisition Company consists
of 2,500 common shares, no par value per share ("ACQUISITION COMPANY COMMON     
SHARES"), of which on the date of this Agreement 100 shares were issued and     
outstanding; and                                                                

       WHEREAS, all of the issued and outstanding shares of capital stock of
Acquisition Company are owned by De La Rue; and                                 

        WHEREAS, the authorized capital stock of the Acquired Company consists
of 25,000,000 shares of common stock, having a par value of $ 0.001 per share   
(the "AUTHORIZED ACQUIRED COMPANY COMMON SHARES"); and                          

         WHEREAS, on December 31, 2000, the issued and outstanding shares of the
Acquired Company are 5,642,895 shares of the Acquired Company Common Shares (the
"OUTSTANDING ACQUIRED COMPANY COMMON SHARES"); and                              

 WHEREAS, the Acquired Company has issued the following options,
warrants and grants for the purchase of common stock on certain conditions:     

  (a)   options to purchase an aggregate of the number of Acquired
Company Common Shares as set forth on EXHIBIT A at the respective prices set    
forth on EXHIBIT A;                                                             

       (b)   warrants to purchase an aggregate of 160,000 shares of Acquired
Company Common Shares as set forth on EXHIBIT A at the respective prices set    
forth on EXHIBIT A.                                                             

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       (c)   grants of 45,000 of Acquired Company Common Shares as set forth
on EXHIBIT A in the conditions set forth on EXHIBIT A.                          

(the aforesaid options and warrants are individually sometimes called an        
"OPTION" and collectively called the "OPTIONS"); and                            

  WHEREAS, the holders of the issued and outstanding shares of the
Acquired Company Common Shares are entitled to vote on the plan of Merger       
contained in this Agreement; and                                                

  WHEREAS, the holders of the issued and outstanding shares of the
Acquisition Company Shares are entitled to vote on this Amended Agreement and   
Plan of Merger contained in this Agreement; and                                 

     WHEREAS, the respective Boards of Directors of each of the Acquired
Company and the Acquisition Company have, subject to the conditions set forth in
this Agreement, adopted and approved this Amended Agreement and Plan of Merger  
and deem it advisable and generally to the welfare and advantage of each, and of
the shareholders of each, that the Acquisition Company merge with and into the  
Acquired Company under and pursuant to the Nevada Revised Statutes 92A.005 ET   
SEQ. (the "NEVADA CORPORATION ACT") and the New Jersey Business Corporation Act 
(the "NJBCA") on the terms set forth in this Agreement,                         

 NOW, THEREFORE, in consideration of the premises and the mutual
agreements, provisions and covenants herein contained, the parties hereto hereby
agree in accordance with Nevada Corporation Act that the Acquisition Company and
the Acquired Company shall be, at the Closing Date, merged into a single        
corporation existing under the laws of the State of Nevada, to wit, the Acquired
Company, one of the Constituent Corporations, which shall be the surviving      
corporation (such corporation in its capacity as such surviving corporation     
being hereinafter called the "SURVIVING CORPORATION"), and the parties hereto   
hereby adopt and agree to the following agreements, terms and conditions        
relating to such merger and the mode of carrying the same into effect.          

1.       DEFINITIONS.                                                           

       For purposes of this Agreement, the following terms have the meanings
specified or referred to in this Section 1:                                     

"ACCOUNTS RECEIVABLE" -- as defined in Section 7.8.           

     "ACQUIRED COMPANY" -- as defined in the recitals to this Agreement.

"ACQUIRED COMPANY'S ACCOUNTANT" -- Deloitte & Touche LLP.     

 "ACQUIRED COMPANY'S CLOSING DOCUMENTS" -- as defined in Section
7.2(a).                                                                         

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      "ACQUIRED COMPANY COMMON SHARES" -- The Outstanding Acquired Company
Common Shares and Option Shares issued or issuable to holders of Options who    
have, between January 1, 2001 and the Closing Date; (i) exercised such Options; 
and (ii) actually paid the Option Payments due to the Acquired Company upon such
exercise.                                                                       

 "ACQUIRED COMPANY SHAREHOLDER MEETING" -- as defined in Section
9.7(a).                                                                         

        "ACQUISITION COMPANY" -- as defined in the recitals to this Agreement.

        "ACQUISITION COMPANY'S COMMON SHARES" -- as defined in the recitals to
this Agreement.                                                                 

"ADJUSTED PURCHASE PRICE" -- as defined in Section 6.1(a).    

"ADR SERVICE PROVIDER" -- as defined in Section 14.7(b).      

      "AGENT" -- shall mean the Person named as escrow agent in the Escrow
Agreement.                                                                      

"AGGREGATE AMOUNT" -- as defined in Section 14.5.             

"AGREEMENT" -- as defined in the recitals to this Agreement.  

      "ANNOUNCEMENT DATE" -- the earlier of the date that (i) the Acquired
Company makes its first public announcement of the transaction proposed by this 
Amended Agreement and Plan of Merger, or (ii) mails its first notice to its     
shareholders of record of the transaction proposed by this Agreement.           

"APPLICABLE CONTRACT" -- any Contract:                        

     (a)   under which the Acquired Company or the Subsidiary has or may
acquire any rights;                                                             

     (b)   under which the Acquired Company or the Subsidiary has or may
become subject to any obligation or liability; or                               

     (c)   by which the Acquired Company or the Subsidiary or any of the
assets owned or used by it is or may become bound.                              

"ARTICLES OF MERGER" -- as defined in Section 2.6.            

  "AUTHORIZED ACQUIRED COMPANY COMMON SHARES" -- as defined in the
recitals to this Agreement.                                                     

 "BEST EFFORTS" -- the efforts that a prudent Person desirous of
achieving a result would use in similar circumstances to ensure that such result
is achieved as expeditiously as possible; PROVIDED, HOWEVER, that an obligation 
to use Best Efforts under this Agreement does not require the Person subject to 
that obligation to take actions that would result in a materially adverse change
in the benefits to such Person of this Agreement and the Contemplated           
Transactions.                                                                   

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 "BREACH" -- a "Breach" of a representation, warranty, covenant,
obligation, or other provision of this Agreement or any instrument delivered    
pursuant to this Agreement will be deemed to have occurred if there is or has   
been:                                                                           

  (a)   any material inaccuracy in or breach of, or any failure to
perform or comply with, such representation, warranty, covenant, obligation, or 
other provision; or                                                             

     (b)   any claim (by any Person) or other occurrence or circumstance
that is or was inconsistent with such representation, warranty, covenant,       
obligation, or other provision, and the term "Breach" means any such material   
inaccuracy, breach, failure, claim, occurrence, or circumstance.                

 "BUYER" -- as defined in the first paragraph of this Agreement.

"BUYER'S ACCOUNTANTS"-- PriceWaterhouseCoopers LLP.           

"BUYER'S CLOSING DOCUMENTS" -- as defined in Section 8.2(a).  

     "CASH" -- shall mean a Federal Reserve or Chips Wire transfer to an
account of a Person entitled thereto in accordance with written instructions    
delivered by such Person.                                                       

"CEO CERTIFICATE" -- as defined in Section 5.1(c).            

"CLOSING" -- as defined in Section 2.6.                       

      "CLOSING DATE" -- the date and time as of which the Closing actually
takes place.                                                                    

"COMPETING BUSINESS" -- as defined in Section 7.25.           

"COMPETING TRANSACTION" -- as defined in Section 9.5(a).      

    "CONSENT" -- any approval, consent, ratification, waiver, or other
authorization (including any Governmental Authorization).                       

        "CONSTITUENT CORPORATIONS" -- the Acquired Company and the Acquisition
Company, collectively.                                                          

        "CONTEMPLATED TRANSACTIONS" -- all of the transactions contemplated by
this Agreement, including:                                                      

  (a)   the execution, delivery, and performance of the Employment
Agreements, the Escrow Agreement and the Paying Agent Agreement;                

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  (b)   the performance by Buyer and the Acquired Company of their
respective covenants and obligations under this Agreement; and                  

        (c)   the merger of the Acquisition Company into and with the Acquired
Company and the extinguishment of the rights of all holders of the Outstanding  
Acquired Company Common Shares and Options as shareholders of the Acquired      
Company other than:                                                             

              (i)    the right of each such holder to receive payment for such
        holder's Acquired Company Common Shares as provided in this Agreement;
or                                                            

            (ii)   the rights of Dissenters (as hereinafter defined) under
the Nevada Corporation Act.                                   

"CONTRACT" -- any agreement, contract, obligation, promise, or
undertaking (whether written or oral and whether express or implied) that is    
legally binding.                                                                

"COPYRIGHT" -- as defined in Section 7.22(a)(iii).            

"COVERED PARTIES" -- as defined in Section 10.5(b).           

"D&O POLICIES" -- as defined in Section 10.5(b).              

"DAMAGES " -- as defined in Section 14.2.                     

        "DISCLOSURE LETTER" -- the disclosure letter delivered by the Acquired
Company to Buyer concurrently with the execution and delivery of this Agreement.

"DISCOVERY" -- as defined in Section 14.7(b).                 

"DISPUTE" -- as defined in Section 14.7(b).                   

   "DISSENTER" -- A holder of Acquired Company Common Shares who, in
accordance with the requirements of Section 92A.420 of the Nevada Corporation   
Act, has at or prior to the time for voting at the Acquired Company Shareholder 
Meeting (i) delivered to the Acquired Company a written demand for payment of   
the holder's Shares and (ii) not voted such holder's Acquired Company Common    
Shares in favor of the Merger and, after the Merger is consummated, makes demand
for payment and otherwise complies with Section 92A.440 of the Nevada           
Corporation Act.                                                                

"DISSENTER LIST" -- as defined in Section 3.5(b)(v).          

"DLR BALANCE SHEET" -- as defined in Section 8.3.             

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         "EARNINGS" -- the net earnings of the Acquired Company (adjusted in the
manner set forth in the Interim Results Statement and to be adjusted in a       
similar manner in the Final Results Statement after delivery of the Final       
Financial Statement) earned solely as the result of operations in the Ordinary  
Course of Business of the Acquired Company (excluding Subsidiary net earnings   
and Transaction Expenses) for the twelve (12) month period ending December 31,  
2000, presented on a consistent basis in accordance with GAAP and excluding (i) 
any capital contributions or (ii) the release of surplus reserves or the release
of surplus provisions or liabilities which increase the net earnings as shown on
the Interim Result Statement by more than $50,000 in the aggregate.             

"EFFECTIVE TIME" -- as defined in Section 2.6.                

"ELIGIBLE CLAIMS" -- as defined in Section 14.5.              

"EMPLOYMENT AGREEMENTS" -- as defined in Section 5.1(b).      

  "ENCUMBRANCE" -- any charge, claim, community property interest,
condition, equitable interest, lien, option, pledge, security interest, right of
first refusal, or restriction of any kind, including any restriction on use,    
voting, transfer, receipt of income.                                            

   "ENVIRONMENT" -- soil, land surface or subsurface strata, surface
waters (including navigable waters, ocean waters, streams, ponds, drainage      
basins, and wetlands), groundwaters, drinking water supply, stream sediments,   
ambient air (including indoor air), plant and animal life, and any other        
environmental medium or natural resource.                                       

      "ENVIRONMENTAL, HEALTH, AND SAFETY LIABILITIES" -- any cost, damage,
expense, liability, obligation, or other responsibility arising from or under   
Environmental Law or Occupational Safety and Health Law and consisting of or    
relating to:                                                                    

  (a)   any environmental, health, or safety matters or conditions
(including on-site or off-site contamination, occupational safety and health,   
and regulation of chemical substances or products);                             

  (b)   fines, penalties, judgments, awards, settlements, legal or
administrative proceedings, damages, losses, claims, demands and response,      
investigative, remedial, or inspection costs and expenses arising under         
Environmental Law or Occupational Safety and Health Law;                        

        (c)   financial responsibility under Environmental Law or Occupational
Safety and Health Law for cleanup costs or corrective action, including any     
investigation, cleanup, removal, containment, or other remediation or response  
actions ("CLEANUP") required by applicable Environmental Law or Occupational    
Safety and Health Law (whether or not such Cleanup has been required or         
requested by any Governmental Body or any other Person) and for any natural     
resource damages; or                                                            

    (d)   any other compliance, corrective, investigative, or remedial
measures required under Environmental Law or Occupational Safety and Health Law.

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    The terms "removal," "remedial," and "response action" include the
types of activities covered by the United States Comprehensive Environmental    
Response, Compensation, and Liability Act, 42 U.S.C. ss. 9601 et seq., as       
amended ("CERCLA").                                                             

       "ENVIRONMENTAL LAW" -- any Legal Requirement that requires or relates
to:                                                                             

      (a)   advising appropriate authorities, employees, and the public of
intended or actual releases of pollutants or hazardous substances or materials, 
violations of discharge limits, or other prohibitions and of the commencement of
activities, such as resource extraction or construction, that could have a      
significant impact on the Environment;                                          

  (b)   preventing or reducing to acceptable levels the release of
pollutants or hazardous substances or materials into the Environment;           

      (c)   assuring that products are designed, formulated, packaged, and
used so that they do not present unreasonable risks to human health or the      
Environment when used or disposed of;                                           

      (d)   cleaning up pollutants that have been released, preventing the
threat of release, or paying the costs of such clean up or prevention; or       

    (e)   making responsible parties pay private parties, or groups of
them, for damages done to their health or the Environment, or permitting        
self-appointed representatives of the public interest to recover for injuries   
done to public assets.                                                          

       "ERISA" -- the Employee Retirement Income Security Act of 1974 or any
successor law, and regulations and rules issued pursuant to that Act or any     
successor law.                                                                  

       "ESCROW AGREEMENT" -- the agreement among Buyer, the Acquired Company
and Agent which is annexed hereto as EXHIBIT B and which has been executed as of
the date of this Agreement.                                                     

         "ESCROW AMOUNT" -- all sums to be held in escrow pursuant to the Escrow
Agreement.                                                                      

"ESCROWED PURCHASE PRICE" -- as defined in Section 3.4(b).    

      "ESCROWED PURCHASE PRICE PER SHARE" -- as defined in Section 3.4(c).

     "EXCESS TRANSACTION EXPENSES"-- the amount by which the Transaction
Expenses exceed Two Hundred Twenty Thousand and 00/100 ($220,000.00) Dollars.   

         "EXCHANGE ACT" -- the Securities Exchange Act of 1934 as amended or any
successor law and regulations and rules issued pursuant to that Act or any      
successor law.                                                                  

     "FACILITIES" -- any space in buildings, plants, structures or other
real property currently or formerly leased to the Acquired Company or           
Subsidiary.                                                                     

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       "FINAL EARNINGS PER SHARE" -- the Earnings of the Acquired Company as
shown on the Final Results Statement divided by the number of Outstanding       
Acquired Company Common Shares.                                                 

         "FINAL RESULTS STATEMENT" -- the unaudited statement of Earnings of the
Acquired Company prepared consistently with the Interim Results Statement       
showing the calculation of Earnings for the Acquired Company for the twelve (12)
months ended December 31, 2000 based upon the Final Financial Statement.        

"FINANCIAL STATEMENTS" -- the:                                

         (a)   audited balance sheets of the Acquired Company and Subsidiary (on
a consolidated basis) as at December 31, 1997, 1998 and 1999 and the related    
audited statements of income, changes in stockholders' equity, and cash flow for
each of the fiscal years then ended, including any notes thereon, together with 
the report thereon of the Acquired Company's Accountants; and                   

(b)   when issued, the Final Financial Statement.             

 "FINAL FINANCIAL STATEMENT" -- the audited balance sheet of the
Acquired Company and Subsidiary (on a consolidated basis) as at December 31,    
2000 and the related audited statements of income, changes in stockholders'     
equity, and cash flow for the twelve (12) months then ended.                    

        "FULLY DILUTED NUMBER OF SHARES" -- shall mean the aggregate number of
the Outstanding Acquired Company Common Shares and the Option Shares.           

     "FULLY DILUTED PRO RATA PORTION" -- shall mean, with respect to any
Person: (i) the number of Shares held by such Person and the number of Shares   
issuable to such Person pursuant to an Option; divided by (ii) the Fully Diluted
Number of Shares.                                                               

   "GAAP" -- generally accepted United States accounting principles,
applied on a basis consistent with the basis on which the Financial Statements  
were prepared.                                                                  

         "GOVERNMENTAL AUTHORIZATION" -- any approval, consent, license, permit,
waiver, or other authorization issued, granted, given, or otherwise made        
available by or under the authority of any Governmental Body or pursuant to any 
Legal Requirement.                                                              

"GOVERNMENTAL BODY" -- any:                                   

      (a)   nation, state, county, city, town, village, district, or other
jurisdiction of any nature;                                                     

       (b)   federal, state, local, municipal, foreign, or other government;

(c)   multi-national organization or body; or                 

     (d)   body exercising, or entitled to exercise, any administrative,
executive, judicial, legislative, police, regulatory, or taxing authority or    
power of any nature.                                                            

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 "HAZARDOUS ACTIVITY" -- the distribution, generation, handling,
importing, management, manufacturing, processing, production, refinement,       
Release, storage, transfer, transportation, treatment, or use of Hazardous      
Materials in the Facilities or any part thereof or Release from the Facilities  
into the Environment.                                                           

       "HAZARDOUS MATERIALS" -- any waste or other substance that is listed,
defined, designated, or classified as, or otherwise determined to be, hazardous,
radioactive, or toxic or a pollutant or a contaminant under or pursuant to any  
Environmental Law applicable to the Acquired Company and specifically including 
petroleum and all derivatives thereof or synthetic substitutes therefor and     
asbestos or asbestos-containing materials.                                      

       "HSR ACT" -- the Hart-Scott-Rodino Antitrust Improvements Act of 1976
or any successor law, and regulations and rules issued pursuant to that Act or  
any successor law.                                                              

"INDEMNIFIED PERSON" -- as defined in Section 14.2.           

"INDEMNITY ESCROW FUND" -- as defined in Section 3.4(b).      

"INITIAL ESCROW FUND" -- as defined in Section 3.4(d)(i).     

"INITIAL PURCHASE PRICE" -- as defined in Section 3.4(b).     

"INITIAL PRICE PER SHARE" -- as defined in Section 3.4(c).    

"INTELLECTUAL PROPERTY ASSETS" -- as defined in Section 7.22. 

         "INTERIM EARNINGS PER SHARE" -- the Earnings of the Acquired Company as
shown on the Interim Results Statement divided by the number of Outstanding     
Acquired Company Common Shares as at the date of this Agreement, which is hereby
declared to be $0.191.                                                          

     "INTERIM RESULTS STATEMENT" -- the unaudited statement (attached as
EXHIBIT C) of the Acquired Company dated January 10, 2001, showing the          
calculation of Earnings for the twelve (12) months ending December 31, 2000.    

      "IRC" -- the Internal Revenue Code of 1986 or any successor law, and
regulations issued by the IRS pursuant to the Internal Revenue Code or any      
successor law.                                                                  

      "IRS" -- the United States Internal Revenue Service or any successor
agency, and, to the extent relevant, the United States Department of the        
Treasury.                                                                       

         "KEY EMPLOYEES" -- those Persons listed on EXHIBIT D, unless Buyer has,
prior to Closing, eliminated such Persons from the said Exhibit.                

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 "KNOWLEDGE" -- a Person will be deemed to have "Knowledge" of a
particular fact or other matter if such Person is actually aware of such fact or
other matter.                                                                   

       The Acquired Company or Subsidiary will be deemed to have "Knowledge"
of a particular fact or other matter if any individual who is serving as a      
director or as the Chief Executive Officer, Executive Vice President for Sales  
and Marketing, Vice President of Finance, Vice President of Technology of the   
Acquired Company has Knowledge of such fact or other matter.                    

      The Buyer will be deemed to have "Knowledge" of a particular fact or
other matter (i) if such fact or other matter is set forth on the Disclosure    
Letter; or (ii) if Pietro Armanini, Richard Sismey, Peter Nimmo, Troy Eldredge, 
Mark Shircel, David Young, Ian McCormick, Raglan Tribe, Herbert C. Johnson, III 
or Brian Kirk have Knowledge of such fact or other matter.                      

         "LEGAL REQUIREMENT" -- any applicable federal, state, local, municipal,
foreign, international, multinational, or other administrative order,           
constitution, law, ordinance, principle of common law, regulation, statute, or  
treaty.                                                                         

"MARKS" -- as defined in Section 7.22(a)(i).                  

"MERGER" -- as defined in Section 2.1.                        

  "MERGER ANNOUNCEMENT LETTER" -- as defined in Section 3.5(b)(i).

"NEVADA CORPORATION ACT" -- as defined in the recitals to this
Agreement.                                                                      

      "NEW JERSEY BUSINESS CORPORATION ACT" OR "NJBCA" -- those New Jersey
laws governing corporations promulgated at N.J.S.A. 14A:1-1 ET. SEQ. or         
successor law, regulations and rules issued pursuant to those laws or any       
successor law.                                                                  

"NONDISCLOSURE AGREEMENT" -- as defined in Section 15.3.      

        "OCCUPATIONAL SAFETY AND HEALTH LAW" -- any Legal Requirement designed
to provide safe and healthful working conditions and to reduce occupational     
safety and health hazards, and any program, whether governmental or private     
(including those promulgated or sponsored by industry associations and insurance
companies) designed to provide safe and healthful working conditions.           

      "OPTION OR OPTIONS" -- as defined in the recitals to this Agreement.

      "OPTION LETTER OF TRANSMITTAL" -- as defined in Section 3.5(b)(iii).

"OPTION LIST" -- as defined in Section 3.5(b)(vi).            

        "OPTION PAYMENT" -- the amount paid or payable to the Acquired Company
between December 31, 2000 and the Closing Date by a Person exercising an Option.

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 "OPTION SHARES" -- The Acquired Company Common Shares issued or
issuable to holders of Options who have exercised such Options between December 
31, 2000 and the Closing Date.                                                  

      "ORDER" -- any award, decision, injunction, judgment, order, ruling,
subpoena, or verdict entered, issued, made, or rendered by any court,           
administrative agency, or other Governmental Body or by any arbitrator.         

      "ORDINARY COURSE OF BUSINESS" -- an action taken by a Person will be
deemed to have been taken in the "Ordinary Course of Business" only if:         

        (a)   such action is consistent with the past practices of such Person
and is taken in the ordinary course of the normal day-to-day operations of such 
Person;                                                                         

    (b)   such action is not required to be authorized by the board of
directors of such Person (or by any Person or group of Persons exercising       
similar authority) and is not required to be specifically authorized by the     
parent company (if any) of such Person; and                                     

 (c)   such action is similar in nature and magnitude to actions
customarily taken, without any authorization by the board of directors (or by   
any Person or group of Persons exercising similar authority), in the ordinary   
course of the normal day-to-day operations of other Persons that are in the same
line of business as such Person.                                                

"ORGANIZATIONAL DOCUMENTS" -- shall mean:                     

        (a)   the articles or certificate of incorporation and the bylaws of a
corporation;                                                                    

      (b)   any charter or similar document adopted or filed in connection
with the creation, formation, or organization of a Person; and                  

(c)   any amendment to any of the foregoing.                  

     "OUTSTANDING ACQUIRED COMPANY COMMON SHARES" -- as set forth in the
recitals to this Agreement.                                                     

"PATENTS" -- as defined in Section 7.22(a)(ii).               

     "PAYING AGENT" -- American Stock Transfer & Trust Co. or such other
similarly qualified fiduciary designated by the Acquired Company prior to       
Closing.                                                                        

      "PAYING AGENT AGREEMENT" -- an agreement to be executed prior to the
mailing of notice of the Shareholders meeting of the Acquired Company among the 
Acquired Company, Buyer and the Paying Agent by which the Paying Agent agrees to
distribute sums due under this Agreement to the holders of the Acquired Company 
Common Shares (including the Option Shares) and perform certain other duties    
described therein.                                                              

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   "PERSON" -- any individual, corporation (including any non-profit
corporation), general or limited partnership, limited liability company, joint  
venture, estate, trust, association, organization, labor union, or other entity.

"PLAN" -- as defined in Section 7.13.                         

"POST CLOSING INTEREST" -- as defined in Section 3.4(b).      

   "PRE-CLOSING ESCROW INTEREST" -- as defined in Section 3.4(d)(i).

      "PRELIMINARY DISSENTER"-- A holder of Acquired Company Common Shares
who, in accordance with the requirements of Section 92A.420 of the Nevada       
Corporation Act, has at or prior to the time for voting at the Acquired Company 
Shareholder Meeting (i) delivered to the Acquired Company a written demand for  
payment of the holder's Shares and (ii) not voted such holder's Acquired Company
Common Shares in favor of the Merger.                                           

"PRICE CALCULATIONS" -- as defined in Section 6.1(b).         

"PRICE DOCUMENTATION" -- as defined in Section 6.1(b).        

         "PROCEEDING" -- any action, arbitration, audit, hearing, investigation,
litigation, or suit (whether civil, criminal, administrative, investigative, or 
informal) commenced, brought, conducted, or heard by or before, or otherwise    
involving, any Governmental Body or arbitrator.                                 

  "PROPRIETARY RIGHTS AGREEMENT" -- as defined in Section 7.20(b).

"PROXY STATEMENT" -- as defined in Section 9.7(b).            

      "PURCHASE PRICE" -- the sum of Thirteen Million Eight Hundred Twenty
Five Thousand Ninety Two and 75/100 ($13,825,092.75) Dollars.                   

"PURCHASE PRICE PER SHARE" -- as defined in Section 3.4(a).   

    "RECORD SHAREHOLDERS LIST" -- as defined in Section 3.5(b)(iv)(A).

"RELATED PERSON" -- with respect to a particular individual:  

(a)   each other member of such individual's Family;          

    (b)   any Person that is directly or indirectly controlled by such
individual or one or more members of such individual's Family;                  

with respect to a specified Person other than an individual:  

       (a)   any Person that directly or indirectly controls, is directly or
indirectly controlled by, or is directly or indirectly under common control with
such specified Person;                                                          

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   (b)   any Person that holds a Material Interest in such specified
Person;                                                                         

(c)   each Person that serves as a director, officer, partner,
executor, or trustee of such specified Person (or in a similar capacity).       

       For purpose of this definition the "FAMILY" of an individual includes
(i) the individual (ii) the individual's spouse (iii) the mother or father of   
the individual; (iv) the siblings of the individual; or (v) the children of the 
individual.                                                                     

        "RELEASE" -- any spilling, leaking, emitting, discharging, depositing,
escaping, leaching, dumping, or other releasing into the Environment, whether   
intentional or unintentional.                                                   

        "REPRESENTATIVE" -- with respect to a particular Person, any director,
officer, employee, agent, consultant, advisor, or other representative of such  
Person, including legal counsel, accountants, and financial advisors.           

       "REVIEW ACCOUNTANTS" - - Arthur Andersen & Co. (Roseland office, Att:
Michael Sullivan).                                                              

"RIGHTS IN MASK WORKS" -- as defined in Section 7.22(a)(iv).  

"SHARE CERTIFICATION" -- as defined in Section 3.5(b)(vii).   

    "SHARE LETTER OF TRANSMITTAL" -- as defined in Section 3.5(b)(ii).

      "SHAREHOLDER" -- the holder of any Acquired Company Common Shares or
any exercised Options.                                                          

"SHAREHOLDER INFORMATION" -- as defined in Section 7.29.      

       "SHAREHOLDERS REPRESENTATIVE" -- Thomas J. Carey, or if he refuses or
is unable to serve, such other person as may be designated by members of the    
Board of Directors of the Acquired Company in office immediately prior to the   
Closing.                                                                        

    "SECURITIES ACT" -- the Securities Act of 1933, as amended, or any
successor law, and regulations and rules issued pursuant to that Act or any     
successor law.                                                                  

"STOP TRANSFER LIST" -- as defined in Section 3.5(b)(iv)(C).  

    "SUBSIDIARY" -- With reference to the Acquired Company, Innovative
Electronics Incorporated, is a Florida corporation, whose capital stock is      
wholly owned by the Acquired Company.                                           

"SURVIVING CORPORATION" -- as defined in the recitals to this 
Agreement.                                                                      

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"TAX" -- any tax (including any income tax, capital gains tax,
value-added tax, sales tax, property tax, gift tax or estate tax) levy,         
assessment, tariff, duty (including any customs duty), deficiency or other fee, 
and any related charge or amount (including any fine, penalty, interest or      
addition to tax) imposed, assessed or collected by or under the authority of any
Governmental Body or payable pursuant to any tax-sharing agreement or any other 
Contract relating to the sharing or payment of any such tax, levy, assessment,  
tariff, duty, deficiency or fee.                                                

        "TAX RETURN" -- any return (including any information return), report,
statement, schedule, notice, form, or other document or information filed with  
or submitted to, or required to be filed with or submitted to, any Governmental 
Body in connection with the determination, assessment, collection, or payment of
any Tax or in connection with the administration, implementation, or enforcement
of or compliance with any Legal Requirement relating to any Tax.                

"TERMINATION PAYMENT" -- as defined in Section 13.1(f).       

       "THREAT OF RELEASE" -- a substantial likelihood of a Release that may
require action in order to prevent or mitigate damage to the Environment that   
may result from such Release.                                                   

       "THREATENED" -- a claim, Proceeding, dispute, action, or other matter
will be deemed to have been "Threatened" if any demand or statement has been    
made (orally or in writing) or any notice has been given (orally or in writing),
or if any other event has occurred or any other circumstances exist, that would 
make it likely, in the reasonable judgment of a Person who is aware of the event
or circumstance that such a claim, Proceeding, dispute, action, or other matter 
will be asserted.                                                               

"TRADE SECRETS" -- as defined in Section 7.22(a)(v).          

"TRANSACTION EXPENSES" -- shall mean                          

      (a)   the amounts paid prior to the Closing or payable at Closing to
Bollinger, Wells, Lett & Co., Inc., the Acquired Company's Accountant, Kraemer, 
Burns, Mytelka, Lovell & Kulka, P.A. and any other investment banking, legal and
accounting consultants employed by the Acquired Company for services rendered   
and expenses incurred in connection with the Agreement, the Contemplated        
Transactions and the Acquired Company Shareholders Meeting;                     

       (b)   all amounts payable to the officers, the employees or directors
of the Acquired Company upon a change of control, which are permitted by this   
Agreement and are authorized by the Board of Directors of the Acquired Company  
prior to the Closing, including but not limited to such amounts, if any, payable
pursuant to the authorization by the Board of Directors of the Acquired Company 
in November, 1999; and                                                          

    (c)   a reasonable estimate of the fees and expenses of the Paying
Agent to be determined at the time of approval of the Paying Agent Agreement by 
Buyer and the Paying Agent.                                                     

"UNSOLICITED PROPOSAL" -- as defined in Section 9.5(b).       

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2.       NAME OF SURVIVING CORPORATION; ARTICLES OF ORGANIZATION; BY-LAWS;      
DIRECTORS; CLOSING.                                           

  2.1   NAME OF SURVIVING CORPORATION. The corporation which shall
survive the merger contemplated hereby (the "MERGER") is the Acquired Company.  
The name of the Surviving Corporation, from and after the Closing Date, shall be
"ATS Money Systems Inc."                                                        

       2.2   ARTICLES OF INCORPORATION. The articles of incorporation of the
Acquired Company as in effect on the Closing Date shall, from and after the     
Closing Date, become the articles of incorporation of the Surviving Corporation,
until changed as provided by law.                                               

        2.3   BY-LAWS. The by-laws of the Acquired Company as in effect on the
date hereof shall, from and after the Closing Date, become the by-laws of the   
Surviving Corporation until changed as provided therein and in the articles of  
incorporation of the Surviving Corporation and applicable law.                  

        2.4   DIRECTORS. The directors of the Acquisition Company in office on
the Closing Date shall, from and after the Closing Date, be the directors of the
Surviving Corporation until their successors have been duly elected and         
qualified in accordance with the articles of incorporation and by-laws of the   
Surviving Corporation.                                                          

      2.5   OFFICERS. The officers of the Acquisition Company in office on
the Closing Date shall, from and after the Closing Date, be the officers of the 
Surviving Corporation until their successors have been duly elected or appointed
and qualified in accordance with the articles of incorporation and by-laws of   
the Surviving Corporation.                                                      

       2.6   CLOSING. The deliveries contemplated by this Agreement shall be
made at the offices of Beattie Padovano, LLC, 50 Chestnut Ridge Road, Montvale, 
New Jersey 07645, at 10 a.m., local time, on the third business day following   
such date upon which all Conditions Precedent set forth in Sections 11 and 12 of
this Agreement have been met or waived, or such other place and time as the     
parties hereto shall mutually agree upon. At the Closing, Acquired Company and  
Acquisition Company shall execute, acknowledge and deliver pursuant to this     
Agreement articles of merger (the "ARTICLES OF MERGER") which shall be filed    
with the Nevada Secretary of State and with the New Jersey Secretary of State.  
The date on which such deliveries, filing and events occurs is hereinafter      
referred to as the "CLOSING DATE", and such deliveries, filing and effectiveness
shall constitute the "CLOSING". The time at which the filings have occurred in  
the offices of the Nevada Secretary of State and the New Jersey Secretary of    
State is hereinafter referred to as the "EFFECTIVE TIME."                       

3.       STATUS AND CONVERSION OF SECURITIES.                                   

     3.1   AUTHORIZED CAPITALIZATION OF SURVIVING CORPORATION. The total
number of shares of all classes of stock which the Surviving Corporation shall  
have authority to issue shall be 25,000,000 common shares, par value $ 0.001 per
share.                                                                          

        3.2   EFFECT ON CAPITAL STOCK. At the Effective Time, by virtue of the
Merger, and without any action on the part of the holder of any of the Acquired 
Company Common Stock or any shares of the capital stock of the Acquisition      
Company:                                                                        

(a)   CAPITAL STOCK OF THE ACQUISITION COMPANY. Each share of 
Acquisition Company Common Stock shall be converted into and become one share of
the Common Stock of the Surviving Corporation;                                  

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        (b)   TREASURY STOCK. Each Acquired Company Common Share that is owned
by the Acquired Company or any Subsidiary of the Acquired Company and each      
Acquired Company Common Share, if any, that is owned by the Buyer, if any, shall
be automatically canceled and retired and shall cease to exist, and no          
consideration shall be delivered in exchange therefor.                          

    (c)   OTHER SHARES. Each Acquired Company Common Share, other than
shares held by Dissenters, shall be converted into the right to receive,        
following the Merger, an amount equal to the Purchase Price Per Share (as       
hereinafter defined), in accordance with this Agreement and Paying Agent        
Agreement as follows:                                                           

            (i)    The Initial Purchase Price Per Share applicable thereto
      shall be payable upon a surrender of a certificate representing such
     Share or other suitable indemnification or evidence of the right to
         such payment in accordance with the Paying Agent Agreement and delivery
         of such other documentation required by the Paying Agent Agreement; and

           (ii)   the Escrowed Purchase Price Per Share shall be payable
      pursuant to the Paying Agent Agreement. From and after the Effective
      Time, each such Acquired Company Common Share shall automatically be
     canceled and retired and shall cease to exist, and each holder of a
       certificate representing any such Shares shall, and each holder of an
    uncertificated right to such Shares shall cease to have any rights
   thereto, except the right to receive the payments hereinabove set
forth.                                                        

        (d)   DISSENTING SHARES. Notwithstanding anything in this Agreement to
the contrary, each Acquired Company Common Share that is held by a Dissenter    
shall be entitled only to such rights as are granted under the Nevada           
Corporation Law and the Surviving Corporation shall make all payments to        
Dissenters in accordance with the Nevada Corporation Law. Prior to Closing, the 
Acquired Company shall not, except with the prior consent of the Buyer, make any
payment with respect to, or settle or offer to settle, such demands.            

3.3   TREATMENT OF OPTIONS.                                   

         The Acquired Company will take all action necessary so that each of the
Options (and any rights thereunder) outstanding immediately prior to the        
Effective Time shall be:                                                        

(a)   released by the holder thereof; or                      

        (b)    exercised by the holder thereof, at or before the Closing. Each
holder of an Option Share, who has exercised an Option as aforesaid, shall be   
entitled to receive, following the Merger, an amount equal to the excess of the 
Purchase Price Per Share in excess of the Option Payment due to the Acquired    
Company upon exercise of such Option if such Option Payment has not already been
paid. Such payment shall be made to the Option holder in accordance with this   
Agreement and the Paying Agent Agreement as follows: All applicable withholding 
Taxes attributable to the payments made hereunder or to distributions           
contemplated hereby shall be deducted from the amounts payable under this       
Section 3.3 and all such Taxes attributable to the exercise of the Options shall
be withheld from the proceeds received in respect of Option Shares.             
Notwithstanding the foregoing, any Option with an exercise price greater than   
the Purchase Price Per Share shall, immediately prior to the Effective Time, be 
canceled without any payment being made therefor. The Acquired Company shall use
its Best Efforts to obtain the consent of each holder of an Option to the       
foregoing treatment of such Option.                                             

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3.4   DETERMINATION AND PAYMENT OF THE PURCHASE PRICE.        

       (a)   At the times and in the manner hereinafter provided, Buyer will
pay the Purchase Price, adjusted to equal: (a) the Adjusted Purchase Price      
determined in accordance with Section 6.1(a); PLUS (b) the Option Payments; and 
LESS (c) the Excess Transaction Expenses. The "PURCHASE PRICE PER SHARE" shall  
be equal to the Purchase Price as so adjusted, divided by the Fully Diluted     
Number of Shares.                                                               

       (b)   The "INITIAL PURCHASE PRICE" shall be equal to (i) the Purchase
Price, as adjusted pursuant to section 3.4(a), LESS (ii) the amount of One      
Million Four Hundred Thousand and 00/100 ($1,400,000) to be deposited in escrow 
with the Agent pursuant to the Escrow Agreement (the "INDEMNITY ESCROW FUND").  
The "ESCROWED PURCHASE PRICE" shall be (i) the Indemnity Escrow Fund, LESS (ii) 
the amounts, if any, payable to the Surviving Corporation from the Indemnity    
Escrow Fund with respect to claims for Damages under Section 14.2 of this       
Agreement, PLUS (iii) all of the interest and income accumulated on the         
Indemnity Escrow Fund while in the hands of either the Escrow Agent, pursuant to
the Escrow Agreement, or the Paying Agent, (the "POST CLOSING INTEREST").       

   (c)   The "INITIAL PRICE PER SHARE" shall be equal to the Initial
Purchase Price divided by the Fully Diluted Number of Shares. The "ESCROWED     
PURCHASE PRICE PER SHARE" shall be equal to the Escrowed Purchase Price divided 
by the Fully Diluted Number of Shares.                                          

  (d)   In order to pay the sums due pursuant to this Agreement to
holders of Acquired Company Common Shares and holders of Options exercised      
between January 1, 2001 and the Effective Time, the following sums shall be paid
at Closing:                                                                     

              (i)    Buyer has delivered to the Agent the sum of Nine Million,
Eight Hundred Seventy Five Thousand, Sixty Six and 25/100     
       ($9,875,066.25) Dollars (the "INITIAL ESCROW FUND") concurrently with
         the execution of this Agreement to be held by the Agent in escrow until
        Closing pursuant to the terms of the Escrow Agreement. At Closing, the
       Agent shall pay the Initial Escrow Fund to the Paying Agent and shall
         pay to Buyer all of the interest accumulated on the Initial Escrow Fund
(the "PRE-CLOSING ESCROW INTEREST").                          

              (ii)   The Acquired Company will deliver to the Paying Agent, in
      Cash at Closing the aggregate amount of the Option Payments actually
        paid to the Acquired Company between January 1, 2001 and the Effective
Time.                                                         

           (iii)  Buyer will deliver in Cash to the Agent at Closing the
         Indemnity Escrow Fund to be held and disbursed by the Agent pursuant to
       the Escrow Agreement for a period of one (1) year after the Effective
    Time or, as to all or a portion thereof as specified in the Escrow
  Agreement, until such later time as the conditions of the Escrow
        Agreement have been fulfilled. When, pursuant to the Escrow Agreement,
        any sums are payable to the Paying Agent, such sums shall be delivered

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       to the Paying Agent and held, invested and distributed, together with
        interest or income on such investment, by the Paying Agent pursuant to
the provisions of the Paying Agent Agreement.                 

       (iv)   Buyer shall deliver in Cash to the Paying Agent at
         Closing the balance of the Adjusted Purchase Price less (i) the Initial
Escrow Fund and (ii) the Excess Transaction Expenses.         

3.5   PAYING AGENT.                                           

    (a)   At Closing, the Acquired Company shall instruct the transfer
agent for the Acquired Company Common Shares to close the transfer books for    
Acquired Company Common Shares at the Effective Time if they have not been      
previously closed.                                                              

     (b)   At Closing, the Acquired Company will deliver, or cause to be
delivered, to the Paying Agent, the following:                                  

        (i)    a letter of the Acquired Company, to holders of the
 Shares, announcing the effectiveness of the Merger (the "MERGER
ANNOUNCEMENT LETTER");                                        

              (ii)   a form of letter of transmittal to accompany certificates
     for Outstanding Acquired Company Common Shares when surrendered for
payment (a "SHARE LETTER OF TRANSMITTAL");                    

           (iii)  a form of letter of transmittal to be presented by the
        holders of Option Shares when requesting payment (an "OPTION LETTER OF
TRANSMITTAL");                                                

(iv)   from the Transfer Agent, the following:    

                    (A)  the names, addresses, certificate numbers and share
               amounts of holders of Shares of record at the Effective Time in a
            format agreeable to the Paying Agent (the "RECORD SHAREHOLDERS
LIST");                                           

                (B)  certified totals of the Acquired Company Common
Shares, outstanding at the date of Closing; and   

                   (C)  a list of all lost, stolen, destroyed or otherwise
invalid certificates (the "STOP TRANSFER LIST");  

              (v)    a list certified by the Acquired Company as to the names,
      addresses, certificate numbers and share amounts of Acquired Company
      Common Shares held by Preliminary Dissenters (the "DISSENTER LIST");

              (vi)   a list certified by the Acquired Company as to the names,
      addresses, grant numbers, share amounts and required Option Payments
   for Persons holding Options which have been exercised pursuant to
    Section 3.3 prior to or at the Effective Time (the "OPTION LIST");

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           (vii)  certification by the Acquired Company, consented to by
         Acquisition Company (which consent shall not be unreasonably withheld),
       as to the Initial Purchase Price Per Share and the calculation of the
 Fully Diluted Number of Shares (the "SHARE CERTIFICATION"); and

              (viii) a copy of the Acquired Company's Proxy Statement relating
to the Merger and a copy of this Agreement.                   

      (c)   At Closing the Buyer and the Acquired Company shall enter into
the Paying Agent Agreement with the Paying Agent, which shall provide for the   
required deliveries and the times, manner and method of making payments in      
accordance with this Agreement to the holders of Acquired Company Common Shares 
and Option Shares issuable with respect to Options exercised in accordance with 
Section 3.3. All fees, costs and expenses of the Paying Agent shall be paid by  
the Surviving Corporation.                                                      

4.       CERTAIN EFFECTS OF MERGER.                                             

  Upon the Closing Date, the separate existence of the Acquisition
Company shall cease and all of the estate, property, rights, privileges,        
immunities and franchises of the Constituent Corporations and all of their      
property, real, personal and mixed, and all the debts due on whatever account to
any of them, as well as all stock subscriptions and other choses in action      
belonging to any of them, shall be transferred to and vested in the Surviving   
Corporation, without further act or deed and the title to all real estate vested
in either of the Constituent Corporations shall not revert or be in any way     
impaired by reason of the Contemplated Transactions, but shall be vested in the 
Surviving Corporation. The Surviving Corporation is responsible and liable for  
all the liabilities and obligations of each of the Constituent Corporations. A  
claim of or against or a pending proceeding by or against a Constituent         
Corporation may be prosecuted as if the Merger had not taken place, or the      
Surviving Corporation may be substituted in the place of the Constituent        
Corporation. Neither the rights of creditors nor any liens upon the property of 
a Constituent Corporation are impaired by the Contemplated Transactions.        

5.       CLOSING OBLIGATIONS.                                                   

       5.1   ACQUIRED COMPANY'S DELIVERIES. At the Closing, Acquired Company
shall deliver, or cause to be delivered, to Buyer:                              

         (a)   documents satisfactory to Buyer evidencing exercise or release of
all of the Options;                                                             

  (b)   employment agreements substantially in the form of EXHIBIT
5.1(B), executed by the Key Employees (collectively, "EMPLOYMENT AGREEMENTS")   
and the Acquired Company;                                                       

   (c)   a certificate (the "CEO CERTIFICATE") executed by the Chief
Executive Officer of the Acquired Company representing and warranting to Buyer  
that each of the Acquired Company's representations and warranties in Section 7 

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of this Agreement are accurate in all respects as of the date of this Agreement 
and remains accurate in all respects as of the Closing Date as if made on the   
Closing Date (giving full effect to any supplements to the Disclosure Letter    
that were delivered by the Acquired Company to Buyer at or prior to the Closing 
Date in accordance with Section 10.2) and that all covenants of the Acquired    
Company have been performed;                                                    

      (d)   resignation of all directors of the Acquired Company as may be
designated by Buyer;                                                            

     (e)   certificates of good standing of recent date for the Acquired
Company and the Subsidiary certified by the Secretary of State or corresponding 
certifying authorities of the respective jurisdictions of incorporation;        

       (f)   a certified copy of the resolution of the board of directors of
the Acquired Company authorizing the execution, delivery and performance of this
Agreement and any other documents to be delivered by the Acquired Company       
hereunder;                                                                      

         (g)   an opinion of Kraemer, Burns, Mytelka, Lovell & Kulka, P.A. dated
as of the Closing Date, substantially in the form of EXHIBIT 5.1(G);            

       (h)   a certificate of the Clerk or Secretary of the Acquired Company
setting forth:                                                                  

             (i)    the number of Acquired Company Common Shares outstanding
         and entitled to vote on the adoption and approval of this Agreement and
the Merger;                                                   

   (ii)   the number of votes pertaining to such shares;

        (iii)  the number of votes cast in favor of or against the
adoption and approval of this Agreement and the Merger; and   

          (iv)   the number of common shares with respect to which the
     holder thereof both: (x) filed with the Acquired Company before the
       taking of the vote of the Shareholders of the Acquired Company on the
        Merger written notice of the holder's intent to demand payment for his
       shares if the Merger was consummated and (y) did not vote in favor of
        the Merger, in person or by proxy, at the Acquired Company Shareholder
Meeting.                                                      

      (i)   in Cash, the amounts to be paid by the Acquired Company to the
Paying Agent as set forth in Section 3.4 of this Agreement;                     

   (j)   the Paying Agent Agreement and all documents required to be
delivered by the Acquired Company to the Paying Agent pursuant to Section 3.5 of
this Agreement;                                                                 

         (k)   the duly executed and acknowledged Articles of Merger accompanied
by evidence of the approval of the Contemplated Transactions by the holders of  
the Outstanding Acquired Company Common Shares in the manner prescribed by the  
Nevada Corporation Act; and                                                     

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    (l)   such other documents as Buyer may reasonably request for the
purpose of facilitating the consummation or performance of any of the           
Contemplated Transactions.                                                      

        5.2   BUYER'S DELIVERIES. At Closing, Buyer shall deliver, or cause to
be delivered, to the Acquired Company, the Agent or the Paying Agent:           

     (a)   in Cash, all amounts required to be delivered by Buyer to the
Paying Agent or the Agent pursuant to Section 3.4 of this Agreement;            

  (b)   certificates executed by the President or other authorized
officers of De La Rue and the Acquisition Company representing and warranting to
the Acquired Company that:                                                      

              (i)    each of Buyer's representations and warranties in Section
     8 of this Agreement were accurate in all respects as of the date of
        this Agreement and are accurate in all respects as of the Closing Date
as if made on the Closing Date;                               

             (ii)   all covenants of this Agreement to be performed by Buyer
have been performed; and                                      

          (iii)  that the Buyer has no Knowledge of any Breach of this
       Agreement that would give Buyer the right to terminate this Agreement
pursuant to Section 13.1(b)(i).                               

 (c)   certificates of good standing of recent date of the Buyer
certified by the Secretary of State or corresponding certifying authority of the
respective jurisdictions of incorporation.                                      

        (d)   certified copy of resolutions of the board of directors of De La
Rue and the board of directors and the shareholder of the Acquisition Company   
authorizing the execution, delivery and performance of this Agreement and any   
other documents to be delivered by the Buyer hereunder;                         

    (e)   an opinion of Beattie Padovano, LLC, dated the Closing Date,
substantially in the form of EXHIBIT 5.2(E);                                    

   (f)   the Paying Agent Agreement and all documents required to be
delivered by the Buyer to the Paying Agent pursuant to Section 3.5 of this      
Agreement;                                                                      

         (g)   the duly executed and acknowledged Articles of Merger accompanied
by evidence of the approval of the Contemplated Transactions by the holders of  
the issued and outstanding shares of the Acquisition Company in accordance with 
the New Jersey Business Corporation Act; and                                    

       (h)   such other documents as Acquired Company may reasonably request
for the purpose of otherwise facilitating the consummation of any of the        
Contemplated Transactions.                                                      

6.       ADJUSTMENT TO PURCHASE PRICE.                                          

6.1   ADJUSTED PURCHASE PRICE.                                

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         (a)   As promptly as practicable after the execution of this Agreement,
the Acquired Company will prepare the Final Financial Statement and the Final   
Results Statement and deliver them to Buyer and to Buyer's Accountant. The      
Acquired Company will cause Acquired Company's Accountant to cooperate with     
Buyer's Accountant and give Buyer's Accountant full access to the work papers of
the Acquired Company's Accountant (other than work papers which Acquired        
Company's Accountant deems proprietary). The Acquired Company shall give the    
Buyers' Accountants full access to the books and records of the Acquired Company
(at reasonable times). Such Final Financial Statement shall be prepared in the  
manner set forth in Section 7.4 for the Financial Statements. If the Final      
Earnings Per Share are greater or less than the Interim Earnings Per Share, then
the Purchase Price shall be adjusted to the price (the "ADJUSTED PURCHASE       
PRICE") as follows:                                                             

               (i)    if the Final Earnings Per Share equal or exceed $0.15, the
       Purchase Price shall be increased or reduced by $0.05 per Outstanding
     Acquired Company Common Share (without giving effect to the Options
      exercised after December 31, 2000) for each $0.01 by which the Final
        Earnings Per Share are above or below, as the case may be, the Interim
       Earnings Per Share (rounded in each case to the nearest $0.01) but in
         no event shall the Adjusted Purchase Price exceed $2.50 per Outstanding
Acquired Company Common Share; or                             

            (ii)   if the Final Earnings Per Share are less than $0.15 but
         greater than or equal to $0.125, the Purchase Price shall be reduced as
         set forth in paragraph (i) and further reduced by $0.05 per Outstanding
        Acquired Company Share for each $0.005 by which the Final Earnings Per
         Share fall below $0.15 (rounded in each case to the nearest $0.005); or

              (iii)  if the Final Earnings Per Share are less than $0.125, the
   Purchase Price shall be reduced to $2.00 per Outstanding Acquired
Company Common Share.                                         

     (b)  Within fifteen (15) business days of the delivery of the Final
Financial Statement and the Final Results Statement, the Acquired Company's     
Representative and the Buyer's Accountant shall confer to determine whether they
agree upon the Adjusted Purchase Price. During that period the Buyer's          
Accountant shall have full access to the work papers of the Acquired Company's  
Accountant (other than work papers which such Acquired Company's Accountant     
deems proprietary) and, at reasonable times, the books and records of the       
Acquired Company. If the Acquired Company's Accountant and the Buyer's          
Accountant agree upon the calculation of the Adjusted Purchase Price, such      
agreement shall be conclusive and binding upon the Buyer and Acquired Company.  
If the Acquired Company's Representative and the Buyer's Accountant cannot agree
upon the calculation of the Adjusted Purchase Price, the Buyer's Representative 
and the Acquired Company's Representative shall, within such fifteen (15)       
business day period deliver to each other and to the Buyer and Acquired Company 
the respective calculations (collectively, the "PRICE CALCULATIONS") of the     
Adjusted Purchase Price and, within twenty (20) business days of the delivery of
the Final Financial Statement and the Final Results Statement by Acquired       
Company, if the Buyer and Acquired Company have not yet agreed upon the         
calculation of the Adjusted Purchase Price, the Buyer and the Acquired Company  
shall submit, or cause to be submitted, to the Review Accountants the Final     
Financial Statement, the Final Results Statement, all work papers of either     

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Buyer's Accountant or Acquired Company's Accountant (other than work papers     
which such Acquired Company's Accountant deems proprietary) and the Price       
Calculations (collectively, the "PRICE DOCUMENTATION"). The Review Accountants  
shall deliver to the Buyer, the Acquired Company, the Buyer's Accountant and the
Acquired Company's Representative, within fifteen (15) days of submission of the
Price Documentation, a certification as to whether the Buyer's Price Calculation
or the Acquired Company's Price Calculation is, in the opinion of the Review    
Accountant, correct. The determination of the Review Accountant, who shall have 
no discretion to certify any calculation other than the Buyer's Price           
Calculation or the Acquired Company's Price Calculation, shall be conclusive and
binding upon the Buyer, the Acquired Company and their respective Accountants   
and Representatives. The Buyer and the Acquired Company shall each bear the     
expense of their respective Accountants and Representatives. The party whose    
Price Calculation is not chosen by the Review Accountant shall pay the cost and 
expense of the Review Accountant. Any fees payable by the Acquired Company to   
the Acquired Company's Accountant or to the Review Accountant shall be          
Transaction Expenses.                                                           

        (c)   If the Final Results Statement delivered by the Acquired Company
shows that the Final Earnings per Share are less than $0.125, either Buyer or   
the Acquired Company shall have the right to terminate this Agreement by notice 
to the other party and the Agent given within ten(10) days of the delivery to   
Buyer of the Final Financial Statement and the Final Results Statement. If the  
Buyer's Price Calculation is based upon Final Earnings Per Share that are less  
than $0.125 and the Review Accountant certifies the Buyer's Price Calculation as
being correct, either the Acquired Company or Buyer shall have the right to     
terminate this Agreement by notice to the other party and the Agent given within
ten (10) days of the delivery to Buyer and the Acquired Company of such Review  
Accountant's certification. If any such notice shall not have been given by a   
party within the said time periods, such party's right to terminate shall be    
deemed to have been waived.                                                     

6.2   ESCROWS.                                                

      (a)   At the execution of this Agreement, the Buyer and the Acquired
Company have entered into the Escrow Agreement, to provide for:                 

           (i)    the Initial Escrow Fund and Pre-Closing Interest to be
       delivered, on the terms set forth in the Escrow Agreement, at Closing
in accordance with Section 3.4(d)(i) or, upon Termination, in 
accordance with Section 13.3 of this Agreement; and           

       (ii)   the Indemnity Escrow Fund; and the delivery of the
     Escrowed Purchase Price to the Paying Agent, in accordance with the
        provisions of Section 3.4(d)(iii) of this Agreement and the provisions
       of the Escrow Agreement, and the balance of the Indemnity Escrow Fund
       to the Surviving Corporation in accordance with the provisions of the
Escrow Agreement;                                             

      (b)   All fees, costs and expenses of the Agent shall be paid by the
Buyer, in the event of Termination, or the Surviving Corporation in the event of
consummation of the Contemplated Transactions.                                  

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7.       REPRESENTATIONS AND WARRANTIES OF ACQUIRED COMPANY.                    

Acquired Company represents and warrants to Buyer as follows: 

7.1   ORGANIZATION AND GOOD STANDING.                         

 (a)   Part 7.1 of the Disclosure Letter contains a complete and
accurate list with respect to the Acquired Company and the Subsidiary,          
respectively, of its name, its jurisdiction of incorporation, other             
jurisdictions in which it is authorized to do business, and its capitalization. 
The Acquired Company and the Subsidiary, respectively, is a corporation duly    
organized, validly existing, and in good standing under the laws of its         
jurisdiction of incorporation, with full corporate power and authority to       
conduct its business as it is now being conducted, to own or use the properties 
and assets that it owns or uses, and to perform all its obligations under       
Applicable Contracts. The Acquired Company and the Subsidiary, respectively, are
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.                                   

   (b)   True copies of the Organizational Documents of the Acquired
Company and the Subsidiary, as currently in effect, have been delivered to      
Buyer.                                                                          

7.2   AUTHORITY; NO CONFLICT.                                 

         (a)   This Agreement constitutes the legal, valid and, when approved by
the Shareholders of the Acquired Company in accordance with Nevada law, binding 
obligation of the Acquired Company, enforceable against the Acquired Company in 
accordance with its terms except as such enforceability may be limited by (i)   
bankruptcy, insolvency, moratorium, reorganization, fraudulent transfer and     
other similar laws relating to or affecting the enforcement of debtors' and     
creditors' rights generally, (ii) general principles of equity, and (iii) the   
discretion of a Governmental Body. All documents executed by the Acquired       
Company at Closing (collectively, the "ACQUIRED COMPANY'S CLOSING DOCUMENTS")   
will constitute the legal valid and binding obligations of the Acquired Company,
enforceable against the Acquired Company in accordance with its terms except as 
such enforceability may be limited by (i) bankruptcy, insolvency, moratorium,   
reorganization, fraudulent transfer and other similar laws relating to or       
affecting the enforcement of debtors' and creditors' rights generally, (ii)     
general principles of equity, and (iii) the discretion of a Governmental Body.  
The Acquired Company has the absolute and unrestricted right, power, authority  
and capacity to execute and deliver this Agreement, and once this Agreement is  
approved by the Acquired Company's Shareholders in accordance with Nevada law,  
to deliver the Acquired Company Closing Documents and to perform its obligations
under this Agreement and the Acquired Company's Closing Documents.              

         (b)   Except as set forth in Part 7.2 of the Disclosure Letter, neither
the execution and delivery of this Agreement nor the consummation or performance
of any of the Contemplated Transactions will, directly or indirectly (with or   
without notice or lapse of time):                                               

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               (i)    contravene, conflict with, or result in a violation of (A)
        any provision of the Organizational Documents of the Acquired Company,
or (B) any resolution adopted by the board of directors or the
stockholders of the Acquired Company;                         

            (ii)   contravene, conflict with, or result in a violation of,
      or give any Governmental Body or other Person the right to challenge
   any of the Contemplated Transactions or to exercise any remedy or
      obtain any relief under, any Legal Requirement or any Order to which
         the Acquired Company or any of the assets owned or used by the Acquired
         Company may be subject except for the rights of dissenting shareholders
under the Nevada Corporation Act;                             

           (iii)  contravene, conflict with, or result in a violation of
        any of the terms or requirements of, or give any Governmental Body the
       right to revoke, withdraw, suspend, cancel, terminate, or modify, any
         Governmental Authorization that is held by the Acquired Company or that
     otherwise relates to the business of, or any of the assets owned or
       used by, the Acquired Company except as set forth in Part 7.17 of the
Disclosure Letter;                                            

           (iv)   contravene, conflict with, or result in a violation or
       breach of 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 to cancel, terminate, or modify, any Applicable
        Contract except as set forth in Part 7.17 of the Disclosure Letter; or

            (v)    result in the imposition or creation of any Encumbrance
         upon or with respect to any of the assets owned or used by the Acquired
Company.                                                      

Except as set forth in Part 7.2 and 7.17 of the Disclosure Letter, the Acquired 
Company is not and will not be required to give any notice to or obtain any     
Consent from any Person in connection with the execution and delivery of this   
Agreement or the consummation or performance of any of the Contemplated         
Transactions.                                                                   

7.3   CAPITALIZATION.                                         

         The authorized equity securities of the Acquired Company consist solely
of 25,000,000 shares of common stock, par value $ 0.001 per share, of which     
5,642,895 shares are issued and outstanding all of which constitute the         
Outstanding Acquired Company Common Shares. All of the Options granted by       
Acquired Company are set forth on EXHIBIT A and except for the holders of the   
Options, no Person has been granted any options or warrants by the Acquired     
Company with respect to the Acquired Company Common Shares. With the exception  
of the Outstanding Acquired Company Common Shares, all of the outstanding equity
securities and other securities of the Acquired Company are owned of record and 
beneficially by the Acquired Company, free and clear of all Encumbrances except 
for the Options. No legend or other reference to any purported Encumbrance has  
been placed by the Acquired Company upon any certificate representing equity    
securities of the Acquired Company. All of the outstanding equity securities of 
the Acquired Company have been duly authorized and validly issued and are fully 
paid and nonassessable. The Acquired Company has entered into no Contracts      
relating to the issuance, sale, or transfer of any equity securities or other   

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securities of the Acquired Company other than the Options. None of the          
Outstanding Acquired Company Common Shares, Options or outstanding equity       
securities or other securities of the Acquired Company was issued in violation  
of the Securities Act or any other Legal Requirement. The Acquired Company does 
not own, and does not have any Contract to acquire, any equity securities or    
other securities of any Person (other than the Acquired Company) or any direct  
or indirect equity or ownership interest in any other business. The Subsidiary  
is the only Subsidiary of the Acquired Company.                                 

7.4   FINANCIAL STATEMENTS.                                   

         The Financial Statements fairly present the financial condition and the
results of operations, changes in stockholders' equity, and cash flow of the    
Acquired Company as at the respective dates of and for the periods referred to  
in such Financial Statements, all in accordance with GAAP; the Financial        
Statements referred to in this Section 7.4 reflect the consistent application of
such accounting principles throughout the periods involved. No Financial        
Statements of any Person other than the Acquired Company and the Subsidiary are 
required by GAAP to be included in the consolidated Financial Statements of the 
Acquired Company.                                                               

7.5   BOOKS AND RECORDS.                                      

        Except as set forth in Part 7.5 of the Disclosure Letter, the books of
account, minute books, stock record books, and other records of the Acquired    
Company and the Subsidiary: (i) have been made available to Buyer and, except as
set forth in Part 7.5 of the Disclosure Letter, are complete and correct and    
(ii) have been maintained in accordance with sound business practices. Except as
set forth in Part 7.5 of the Disclosure Letter, the minute books of the Acquired
Company delivered to Buyer contain accurate and complete records of all meetings
held of, and corporate action taken by, the stockholders, the boards of         
directors, and committees of the boards of directors of the Acquired Company,   
and no meeting of any such stockholders, board of directors, or committee has   
been held for which minutes have not been prepared and are not contained in such
minute books. At the Closing, all of those books and records will be in the     
possession of the Acquired Company, except as set forth in Part 7.5 of the      
Disclosure Letter.                                                              

7.6   TITLE TO PROPERTIES; ENCUMBRANCES.                      

        Neither the Acquired Company nor the Subsidiary owns or has ever owned
any real property. Part 7.6 of the Disclosure Letter contains a complete and    
accurate list of all real property leased by the Acquired Company or the        
Subsidiary. The Acquired Company has delivered or made available to Buyer copies
of the leases and other instruments by which the Acquired Company or the        
Subsidiary acquired such leaseholds and interests and title insurance policies, 
opinions, abstracts, and surveys in its possession or in the possession of the  
Subsidiary and relating to such leaseholds or interests. Part 7.6 of the        
Disclosure Letter contains a complete and accurate list of (i) all the          
properties and assets over $5,000.00 (whether real, personal, or mixed and      
whether tangible or intangible) (other than inventory) owned, leased or operated
by the Acquired Company and/or the Subsidiary and reflected as owned or leased  
in the books and records of the Acquired Company, including all of the          
properties and assets reflected in the Balance Sheet (except for (x) inventory  

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or (y) personal property sold since the date of the Balance Sheet, as the case  
may be, in the Ordinary Course of Business), and (ii) all of the properties and 
assets (other than inventory) purchased or otherwise acquired by the Acquired   
Company since the date of the Financial Statement (except for personal property 
acquired and sold since the date of the Financial Statement in the Ordinary     
Course of Business and consistent with past practice). Except as set forth in   
Part 7.6 of the Disclosure Letter, all material properties and assets reflected 
in the Financial Statements are free and clear of all Encumbrances.             

7.7   CONDITION AND SUFFICIENCY OF ASSETS.                    

  The Facilities and all other property and assets of the Acquired
Company and the Subsidiary are in good operating condition and repair except for
ordinary wear and tear, are adequate for the uses to which they are being put,  
and none of such Facilities or other property and assets are in need of         
maintenance or repairs except for ordinary, routine maintenance and repairs that
are not material in nature or cost. The Facilities and property and assets of   
the Acquired Company and the Subsidiary are sufficient for the continued conduct
of the respective businesses of the Acquired Company and the Subsidiary after   
the Closing in substantially the same manner as conducted prior to the Closing. 

7.8   ACCOUNTS RECEIVABLE.                                    

    All accounts receivable of the Acquired Company and the Subsidiary
(collectively, the "ACCOUNTS RECEIVABLE") set forth in the Final Financial      
Statement will represent valid obligations arising from sales actually made or  
services actually performed in the Ordinary Course of Business. Unless paid     
prior to the Closing Date, the Accounts Receivable are or will be as of the     
Closing Date collectible net of the respective reserves shown on the Final      
Financial Statement (which reserves are adequate and calculated consistent with 
past practice. Except as set forth on Part 7.8 of the Disclosure Letter and     
subject to such reserves, each of the Accounts Receivable either has been or    
will be collected in full, without any set-off. There is no contest, claim or   
right of set-off, other than returns in the Ordinary Course of Business, under  
any Contract with any obligor of an Account Receivable relating to the amount or
validity of such Accounts Receivable. Part 7.8 of the Disclosure Letter contains
a complete and accurate list of all Accounts Receivable as of December 31, 2000 
which list sets forth the aging of such Accounts Receivable.                    

7.9   INVENTORY.                                              

      All inventory of the Acquired Company or the Subsidiary reflected in
the Financial Statements consist of a quality and quantity usable and salable in
the Ordinary Course of Business, except for obsolete items and items of         
below-standard quality, all of which have been reserved against, written off or 
written down to net realizable value in the Financial Statements. All           
inventories not written off have been priced at the lower of cost or market on a
first in, first out basis. The quantities of each item of inventory (whether raw
materials, work-in-process, or finished goods) are reasonable in the present    
circumstances of the Acquired Company and the Subsidiary.                       

7.10  NO UNDISCLOSED LIABILITIES.                             

        Except as set forth in Part 7.10 of the Disclosure Letter, neither the
Acquired Company nor the Subsidiary has any liabilities or obligations of any   
nature (whether absolute, accrued, contingent, or otherwise) except for         

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liabilities or obligations reflected or reserved against in the Financial       
Statements and current liabilities incurred in the Ordinary Course of Business  
since the respective dates thereof.                                             

7.11  TAXES.                                                  

         (a)   The Acquired Company, the Subsidiary and its predecessor entities
have filed or caused to be filed (on a timely basis since the year ending       
December 31, 1994) all Tax Returns that are or were required to be filed by or  
with respect to any of them, either separately or as a member of a group of     
corporations, pursuant to applicable Legal Requirements. The Acquired Company   
has delivered to Buyer copies of, and Part 7.11 of the Disclosure Letter        
contains a complete and accurate list of such Tax Returns filed since 1994. The 
Acquired Company and the Subsidiary has paid, or made provision for the payment 
of, all Taxes that have or may have become due pursuant to those Tax Returns or 
otherwise, or pursuant to any assessment received by the Acquired Company or the
Subsidiary, except such Taxes, if any, as are listed in Part 7.11 of the        
Disclosure Letter and are being contested in good faith and as to which adequate
reserves (determined in accordance with GAAP) have been provided in the Balance 
Sheet.                                                                          

     (b)   The United States federal and state income Tax Returns of the
Acquired Company and the Subsidiary subject to such Taxes have been audited by  
the IRS or relevant state Tax authorities or are closed by the applicable       
statute of limitations for all taxable years through 1996. Part 7.11 of the     
Disclosure Letter contains a complete and accurate list of all audits of all    
such Tax Returns, including a reasonably detailed description of the nature and 
outcome of each audit. All deficiencies proposed as a result of such audits have
been paid, reserved against, settled, or, as described in Part 7.11 of the      
Disclosure Letter, are being contested in good faith by appropriate proceedings.
Part 7.11 of the Disclosure Letter describes all adjustments to the United      
States federal income Tax Returns filed by the Acquired Company or any group of 
corporations including the Acquired Company for all taxable years since 1996 and
the resulting deficiencies proposed by the IRS. Except as described in Part 7.11
of the Disclosure Letter, neither the Acquired Company nor Subsidiary has given 
or been requested to give any waivers or extensions (or is or would be subject  
to a waiver or extension given by any other Person) of any statute of           
limitations relating to the payment of Taxes of the Acquired Company or         
Subsidiary or for which the Acquired Company or Subsidiary may be liable.       

        (c)   The charges, accruals, and reserves with respect to Taxes on the
respective books of the Acquired Company are adequate (determined in accordance 
with GAAP) and are at least equal to the Acquired Company's liability for Taxes.
There exists no proposed Tax assessment against the Acquired Company or         
Subsidiary except as set forth in Part 7.11 of the Disclosure Letter. No consent
to the application of Section 341(f)(2) of the IRC has been filed with respect  
to any property or assets held, acquired, or to be acquired by the Acquired     
Company or Subsidiary. All Taxes that the Acquired Company or Subsidiary is or  
was required by Legal Requirements to withhold or collect have been duly        
withheld or collected and, to the extent required, have been paid to the proper 
Governmental Body or other Person.                                              

   (d)   All Tax Returns filed by (or that include on a consolidated
basis) the Acquired Company are true, correct, and complete. There is no Tax    
sharing agreement that will require any payment by the Acquired Company after   
the date of this Agreement. Neither the Acquired Company nor Subsidiary is nor  
within the five (5) year period preceding the Closing Date has been, an "S"     
corporation. During the consistency period (as defined in Section 338(h)(4) of  
the IRC with respect to the sale of the Shares to Buyer), neither the Acquired  
Company nor any target affiliate (as defined in Section 338(h)(6) of the IRC    
with respect to the sale of the Shares to Buyer) has sold or will sell any      

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property or assets to Buyer or to any member of the affiliated group (as defined
in Section 338(h)(5) of the IRC) that includes Buyer. Part 7.11 of the          
Disclosure Letter lists all such target affiliates.                             

7.12  NO MATERIAL ADVERSE CHANGE.                             

      Except as set forth in Part 7.12 of the Disclosure Letter, and since
the Financial Statements for the year ended December 31, 1999 through the date  
of this Agreement, there has not been any material adverse change in the        
business, operations, properties, assets, or condition of the Acquired Company  
or the Subsidiary, and no event has occurred or circumstance exists that may    
result in such a material adverse change. Since the Final Financial Statement   
and through and including the Closing Date, there will have been no material    
adverse change in the business operation, properties, assets or condition of the
Acquired Company or the Subsidiary and no event will have occurred or           
circumstance existed that may result in such a material adverse change.         

7.13  EMPLOYEE BENEFITS.                                      

  (a)   As used in this Section 7.13, the following terms have the
meanings set forth below.                                                       

      "COMPANY OTHER BENEFIT OBLIGATION" means an Other Benefit Obligation
owed, adopted, or followed by the Acquired Company or an ERISA Affiliate of the 
Acquired Company.                                                               

    "COMPANY PLAN" means all Plans of which the Acquired Company or an
ERISA Affiliate of the Acquired Company is or was a Plan Sponsor, or to which   
the Acquired Company or an ERISA Affiliate of the Acquired Company otherwise    
contributes or has contributed, or in which the Acquired Company or an ERISA    
Affiliate of the Acquired Company otherwise participates or has participated.   
All references to Plans are to Company Plans unless the context requires        
otherwise.                                                                      

    "COMPANY VEBA" means a VEBA whose members include employees of the
Acquired Company or any ERISA Affiliate of the Acquired Company.                

    "ERISA AFFILIATE" means, with respect to the Acquired Company, any
other person that, together with the Acquired Company, would be treated as a    
single employer under IRC ss. 414.                                              

    "MULTI-EMPLOYER PLAN" has the meaning given in ERISA ss. 3(37)(A).

        "OTHER BENEFIT OBLIGATIONS" means all obligations to provide benefits,
other than salary, as compensation for services rendered, to present or former  
directors, employees, or agents, other than obligations, that are Plans. Other  
Benefit Obligations include consulting agreements under which the compensation  
paid does not depend upon the amount of service rendered, sabbatical policies,  
severance payment policies, and fringe benefits within the meaning of IRC ss.   
132.                                                                            

         "PBGC" means the Pension Benefit Guaranty Corporation, or any successor
thereto.                                                                        

"PENSION PLAN" has the meaning given in ERISA ss. 3(2)(A).    

"PLAN" has the meaning given in ERISA ss. 3(3).               

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"PLAN SPONSOR" has the meaning given in ERISA ss. 3(16)(B).   

    "QUALIFIED PLAN" means any Plan that meets or purports to meet the
requirements of IRC ss. 401(a).                                                 

       "TITLE IV PLANS" means all Pension Plans that are subject to Title IV
of ERISA, 29 U.S.C.ss. 1301 et seq., other than Multi-Employer Plans.           

       "VEBA" means a voluntary employees' beneficiary association under IRC
ss. 501(c)(9).                                                                  

"WELFARE PLAN" has the meaning given in ERISA ss. 3(1).       

  (b)   (i)    Part 7.13(b)(i) of the Disclosure Letter contains a
   complete and accurate list of all Company Plans and Other Benefit
       Obligations. Neither the Acquired Company nor any ERISA Affiliate has
         or has ever had any Company VEBAs, defined Benefit Pension Plans, Title
       IV Plans, Multi-Employer Plans or post-retirement benefits other than
Company Plans.                                                

         (ii)   Part 7.13(b)(ii) of the Disclosure Letter contains a
        complete and accurate list of (A) all ERISA Affiliates of the Acquired
        Company, and (B) all Plans of which any such ERISA Affiliate is or was
       a Plan Sponsor, in which any such ERISA Affiliate participates or has
       participated, or to which any such ERISA Affiliate contributes or has
contributed.                                                  

          (iii)  Part 7.13(b)(iii) of the Disclosure Letter sets forth
      the financial cost of all obligations owed under any Company Plan or
        Company Other Benefit Obligation that is not subject to the disclosure
and reporting requirements of ERISA.                          

(c)   Acquired Company has delivered to Buyer:                

           (i)    all documents that set forth the terms of each Company
   Plan, Company Other Benefit Obligation, and of any related trust,
      including (A) all plan descriptions and summary plan descriptions of
      Company Plans for which the Acquired Company is required to prepare,
       file, and distribute plan descriptions and summary plan descriptions,
      and (B) all summaries and descriptions furnished to participants and
  beneficiaries regarding Company Plans, and Company Other Benefit
       Obligations, for which a plan description or summary plan description
is not required;                                              

       (ii)   all personnel, payroll, and employment manuals and
policies;                                                     

      (iii)  all insurance policies purchased by or to provide
benefits under any Company Plan;                              

              (iv)   all contracts with third party administrators, actuaries,
     investment managers, consultants, and other independent contractors
    that relate to any Company Plan, Company Other Benefit Obligation;

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             (v)    all reports submitted within the two (2) years preceding
      the date of this Agreement by third party administrators, actuaries,
         investment managers, consultants, or other independent contractors with
  respect to any Company Plan or Company Other Benefit Obligation;

             (vi)   the Form 5500 filed in each of the most recent three (3)
       plan years with respect to each Company Plan, including all schedules
thereto and the opinions of independent accountants;          

           (vii)  all notices that were given by the Acquired Company or
        any ERISA Affiliate of the Acquired Company or any Company Plan to the
        IRS, the PBGC, or any participant or beneficiary, pursuant to statute,
 within the four (4) years preceding the date of this Agreement,
  including notices that are expressly mentioned elsewhere in this
Section 7.13;                                                 

               (viii) all notices regarding a Qualified Plan or any Company Plan
         that were given by the IRS to the Acquired Company, any ERISA Affiliate
        of the Acquired Company, or any Company Plan within the four (4) years
preceding the date of this Agreement;                         

     (ix)   with respect to Qualified Plans, the most recent
     determination letter, if any, for each Plan of the Acquired Company
that is a Qualified Plan; and                                 

     (d)   Except as set forth in Part 7.13(d) of the Disclosure Letter:

      (i)    The Acquired Company and the Subsidiary have each
      performed all of its obligations under all Company Plans and Company
         Other Benefit Obligations. The Acquired Company and the Subsidiary have
       each made appropriate entries in its financial records and statements
      for all obligations and liabilities under such Plans and Obligations
that have accrued but are not due.                            

           (ii)   No statement, either written or oral, has been made by
         the Acquired Company or the Subsidiary to any Person with regard to any
      Plan or Other Benefit Obligation that was not in accordance with the
 Plan or Other Benefit Obligation and that could have an adverse
      economic consequence to the Acquired Company or the Subsidiary or to
Buyer.                                                        

             (iii)  The Acquired Company and the Subsidiary, with respect to
   all Company Plans and Company Other Benefits Obligations and each
         Company Plan and Company Other Benefit Obligation is in full compliance
with ERISA, and the IRC.                                      

                  (A)  No transaction prohibited by ERISA ss. 406 and no
               "prohibited transaction" under IRC ss. 4975(c) have occurred with
respect to any Company Plan.                      

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                    (B)  Neither the Acquired Company nor the Subsidiary has
              any liability to the IRS with respect to any Plan, including any
liability imposed by Chapter 43 of the IRC.       

                    (C)  Neither the Acquired Company nor the Subsidiary has
           any liability to the PBGC with respect to any Plan or has any
liability under ERISA ss. 502 or ss. 4071.        

                     (D)  All filings required by ERISA and the IRC as to each
             Plan have been timely filed, and all notices and disclosures to
               participants required by either ERISA or the IRC have been timely
provided.                                         

                    (E)  All contributions and payments made or accrued with
    respect to all Company Plans and Company Other Benefit
         Obligations are deductible under IRC ss. 162 or ss. 404. No
           amount, or any asset of any Company Plan is subject to Tax as
unrelated business taxable income.                

           (iv)   Each Company Plan can be terminated within thirty (30)
 days, without payment of any additional contribution or amount.

           (v)    Since 1998, there has been no amendment of any Company
Plan.                                                         

             (vi)   The Acquired Company has received no notice of any event
     or circumstance that could result in a material increase in premium
       costs of Company Plans and Company Other Benefit Obligations that are
    insured, or a material increase in benefit costs of such Plans and
Obligations that are self-insured.                            

             (vii)  Other than claims for benefits submitted by participants
        or beneficiaries, no claim against, or legal proceeding involving, any
     Company Plan or Company Other Benefit Obligation, is pending or, to
Acquired Company's Knowledge, is Threatened.                  

  (viii) No Company Plan is a stock bonus, pension, or
profit-sharing plan within the meaning of IRC ss. 401(a).     

             (ix)   Each Qualified Plan of the Acquired Company is qualified
      in form and operation under IRC ss. 401(a); each trust for each such
       Plan is exempt from federal income Tax under IRC ss. 501(a). No event
     has occurred or circumstance exists that will or could give rise to
   disqualification or loss of Tax-exempt status of any such Plan or
trust.                                                        

     (x)    No Company Plan is subject to Title IV of ERISA.

            (xi)   Neither the Acquired Company nor any ERISA Affiliate of
         the Acquired Company has filed a notice of intent to terminate any Plan
or has adopted any amendment to treat a Plan as terminated.   

         (xii)  Except to the extent required under ERISA ss. 601 ET
         SEQ. and IRC ss. 4980B, the Acquired Company does not provide health or
        welfare benefits for any retired or former employee or is obligated to
     provide health or welfare benefits to any active employee following
such employee's retirement or other termination of service.   

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             (xiii) The Acquired Company has complied with the provisions of
ERISA ss 601 ET SEQ. and IRC ss 4980B.                        

               (xiv)  No payment that is owed or may become due to any director,
officer, employee, or agent of the Acquired Company will be   
        non-deductible to the Acquired Company or subject to Tax under IRC ss.
       280G or ss. 4999; nor will the Acquired Company be required to "gross
       up" or otherwise compensate any such person because of the imposition
of any excise Tax on a payment to such person.                

              (xv)   Except as set forth in the Plans, the consummation of the
       Contemplated Transactions will not result in the payment, vesting, or
acceleration of any benefit under such Plans.                 

        7.14  COMPLIANCE WITH LEGAL REQUIREMENTS; GOVERNMENTAL AUTHORIZATIONS.

  (a)   Except as set forth in Part 7.14 of the Disclosure Letter:

             (i)    the Acquired Company and Subsidiary is, and at all times
       since January 1, 1998 has been, in full compliance with each material
        Legal Requirement that is or was applicable to it or to the conduct or
         operation of its business or the ownership or use of any of its assets;

           (ii)   to the Knowledge of the Acquired Company, no event has
       occurred or circumstance exists that (with or without notice or lapse
      of time) (A) may constitute or result in a violation by the Acquired
        Company or the Subsidiary of, or a failure on the part of the Acquired
Company or the Subsidiary to comply with, any material Legal  
        Requirement, or (B) may give rise to any obligation on the part of the
        Acquired Company or the Subsidiary to undertake, or to bear all or any
      portion of the cost of, any material remedial action related to such
Legal Requirement; and                                        

        (iii)  Neither the Acquired Company nor the Subsidiary has
  received, at any time since January 1, 1998, any notice from any
   Governmental Body regarding (A) any actual, alleged, possible, or
potential violation of, or failure to comply with, any Legal  
 Requirement, or (B) any actual, alleged, possible, or potential
         obligation on the part of the Acquired Company to undertake, or to bear
       all or any portion of the cost of, any remedial action of any nature.

        (b)   Other than Certificates of Occupancy for leased premises, all of
which have been obtained, neither the Acquired Company nor the Subsidiary       
requires any Governmental Authorizations to permit the Acquired Company or the  
Subsidiary to lawfully conduct and operate its business in the manner currently 
conducted and to operate such business and to permit the Acquired Company or the
Subsidiary to own and use its assets in the manner in which it currently owns   
and uses such assets.                                                           

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7.15  LEGAL PROCEEDINGS; ORDERS.                              

        (a)   Except as set forth in Part 7.15 of the Disclosure Letter, there
is no pending Proceeding:                                                       

               (i)    that has been commenced by or against the Acquired Company
  or the Subsidiary or that otherwise relates to or may affect the
  business of, or any of the assets owned or used by, the Acquired
Company or the Subsidiary; or                                 

    (ii)   that challenges, or that may have the effect of
      preventing, delaying, making illegal, or otherwise interfering with,
any of the Contemplated Transactions.                         

      To the Knowledge of the Acquired Company, (1) no such Proceeding has
been Threatened, and (2) no event has occurred or circumstance exists that is   
likely to give rise to or serve as a basis for the commencement of any such     
Proceeding. The Acquired Company has delivered to Buyer copies of all pleadings,
correspondence, and other documents relating to each Proceeding listed in Part  
7.15 of the Disclosure Letter. The Proceedings listed in Part 7.15 of the       
Disclosure Letter will not have a material adverse effect on the business,      
operations, assets, condition, or prospects of the Acquired Company or the      
Subsidiary.                                                                     

  (b)   Except as set forth in Part 7.15 of the Disclosure Letter:

              (i)    there is no Order to which any of the Acquired Company or
    the Subsidiary, or any of the assets owned or used by the Acquired
Company or the Subsidiary, is subject;                        

       (ii)   Neither the Acquired Company nor the Subsidiary is
     subject to any Order that relates to the business of, or any of the
      assets owned or used by, the Acquired Company or the Subsidiary; and

    (iii)  to the Knowledge of the Acquired Company or the
      Subsidiary, no officer, director, agent, or employee of the Acquired
       Company or the Subsidiary is subject to any Order that prohibits such
      officer, director, agent, or employee from engaging in or continuing
    any conduct, activity, or practice relating to the business of the
Acquired Company or the Subsidiary.                           

  (c)   Except as set forth in Part 7.15 of the Disclosure Letter:

           (i)    the Acquired Company and the Subsidiary is, and at all
      times since January 1, 1998 has been, in full compliance with all of
     the terms and requirements of each Order to which it, or any of the
assets owned or used by it, is or has been subject;           

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          (ii)   no event has occurred or circumstance exists that may
     constitute or result in (with or without notice or lapse of time) a
       violation of or failure to comply with any term or requirement of any
      Order to which the Acquired Company or the Subsidiary, or any of the
    assets owned or used by the Acquired Company or the Subsidiary, is
subject; and                                                  

        (iii)  Neither the Acquired Company nor the Subsidiary has
  received, at any time since January 1, 1998, any notice from any
      Governmental Body or any other Person regarding any actual, alleged,
     possible, or potential violation of, or failure to comply with, any
       term or requirement of any Order to which the Acquired Company or the
        Subsidiary, or any of the assets owned or used by the Acquired Company
or the Subsidiary, is or has been subject.                    

7.16  ABSENCE OF CERTAIN CHANGES AND EVENTS.                  

      Except as set forth in Part 7.16 of the Disclosure Letter, since the
date of the Financial Statement for the year ended December 31, 1999, the       
Acquired Company or the Subsidiary has conducted their respective businesses    
only in the Ordinary Course of Business and there has not been any:             

     (a)   change in the Acquired Company's authorized or issued capital
stock; grant of any stock option or right to purchase shares of capital stock of
the Acquired Company; the Options in Schedule A; issuance of any security       
convertible into such capital stock; grant of any registration rights; purchase,
redemption, retirement, or other acquisition by the Acquired Company of any     
shares of any such capital stock; or declaration or payment of any dividend or  
other distribution or payment in respect of shares of capital stock or any of   
the foregoing with respect to the Subsidiary;                                   

         (b)   amendment to the Organizational Documents of the Acquired Company
or the Subsidiary;                                                              

        (c)   payment or increase by the Acquired Company or the Subsidiary of
any bonuses, salaries, or other compensation to any stockholder, director,      
officer, or (except in the Ordinary Course of Business) employee or entry into  
any employment, severance or similar Contract with any director, officer, or    
employee except for those actions or agreements which give rise to Transaction  
Expenses;                                                                       

      (d)   adoption of, or increase in the payments to or benefits under,
any profit sharing, bonus, deferred compensation, savings, insurance, pension,  
retirement, or other employee benefit plan for or with any employees of the     
Acquired Company or the Subsidiary;                                             

        (e)   damage to or destruction or loss of any asset or property of the
Acquired Company or the Subsidiary, whether or not covered by insurance,        
materially and adversely affecting the properties, assets, business, financial  
condition, or prospects of the Acquired Company or the Subsidiary, taken as a   
whole;                                                                          

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       (f)   entry into, termination of, or receipt of notice of termination
of (i) any license, distributorship, dealer, sales representative, joint        
venture, credit, or similar agreement, or (ii) transaction involving a total    
remaining commitment by or to the Acquired Company or the Subsidiary of at least
$100,000.00;                                                                    

     (g)   sale (other than sales of inventory in the Ordinary Course of
Business), lease, or other disposition of any asset or property of the Acquired 
Company or mortgage, pledge, or imposition of any lien or other encumbrance on  
any material asset or property of the Acquired Company or the Subsidiary,       
including the sale, lease, or other disposition of any of the Intellectual      
Property Assets;                                                                

      (h)   cancellation or waiver of any claims or rights with a value to
the Acquired Company or the Subsidiary in excess of $25,000.00;                 

      (i)   material change in the accounting methods used by the Acquired
Company or the Subsidiary;                                                      

      (j)   agreement, whether oral or written, by the Acquired Company or
the Subsidiary to do any of the foregoing; or                                   

    (k)   other event or condition of any kind to the Knowledge of the
Acquired Company or the Subsidiary that has or might have a material adverse    
effect on the financial condition of the Acquired Company or the Subsidiary.    

7.17  CONTRACTS; NO DEFAULTS.                                 

     (a)   Part 7.17(a) of the Disclosure Letter contains a complete and
accurate list, and the Acquired Company has delivered to Buyer true and complete
copies, of:                                                                     

          (i)    each Applicable Contract that involves performance of
       services or delivery of goods or materials by the Acquired Company or
Subsidiary of an amount or value in excess of $25,000.00;     

          (ii)   each Applicable Contract that involves performance of
       services or delivery of goods or materials to the Acquired Company or
the Subsidiary of an amount or value in excess of $25,000.00; 

              (iii)  each Applicable Contract that was not entered into in the
        Ordinary Course of Business and that involves expenditures or receipts
of the Acquired Company or Subsidiary in excess of $25,000.00;

          (iv)   Except for those listed in Part 7.6 of the Disclosure
        Letter each lease, rental or occupancy agreement, license, installment
         and conditional sale agreement, and other Applicable Contract affecting
     the ownership of, leasing of, title to, use of, or any leasehold or
   other interest in, any real or personal property (except personal
         property leases and installment and conditional sales agreements having
         a value per item or aggregate payments of less than $25,000.00 and with
terms of less than one (1) year);                             

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               (v)    each licensing agreement or other Applicable Contract with
   respect to patents, trademarks, copyrights, or other intellectual
  property, including agreements with current or former employees,
consultants, or contractors regarding the appropriation or the
non-disclosure of any of the Intellectual Property Assets;    

              (vi)   each collective bargaining agreement and other Applicable
         Contract to or with any labor union or other employee representative of
a group of employees;                                         

          (vii)  each joint venture, partnership, and other Applicable
         Contract (however named) involving a sharing of profits, losses, costs,
or liabilities by the Acquired Company with any other Person; 

              (viii) each Applicable Contract containing covenants that in any
       way purport to restrict the business activity of the Acquired Company
      or any Affiliate of the Acquired Company or limit the freedom of the
        Acquired Company or any Affiliate of the Acquired Company to engage in
any line of business or to compete with any Person;           

             (ix)   each Applicable Contract providing for payments to or by
     any Person based on sales, purchases, or profits, other than direct
payments for goods;                                           

           (x)    each power of attorney that is currently effective and
outstanding;                                                  

            (xi)   each Applicable Contract entered into other than in the
      Ordinary Course of Business that contains or provides for an express
         undertaking by the Acquired Company to be responsible for consequential
damages;                                                      

         (xii)  each Applicable Contract for capital expenditures in
excess of $25,000.00;                                         

          (xiii) each written warranty, guaranty, and or other similar
     undertaking with respect to contractual performance extended by the
     Acquired Company other than in the Ordinary Course of Business; and

               (xiv)  each amendment, supplement, and modification (whether oral
or written) in respect of any of the foregoing.               

     (b)   Except as set forth in Part 7.17(b) of the Disclosure Letter:

            (i)    No director, officer or employee (and no Related Person
      thereof) of the Acquired Company or Subsidiary has any rights under,
        and has no obligation or liability under, any Contract that relates to
      the business of, or any of the assets owned or used by, the Acquired
Company or the Subsidiary; and                                

          (ii)   No officer, director, agent, employee, consultant, or
  contractor of the Acquired Company or Subsidiary is bound by any
        Contract that purports to limit the ability of such officer, director,
         agent, employee, consultant, or contractor to (A) engage in or continue

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    any conduct, activity, or practice relating to the business of the
         Acquired Company, or (B) assign to the Acquired Company or to any other
Person any rights to any invention, improvement, or discovery.

     (c)   Except as set forth in Part 7.17(c) of the Disclosure Letter,
each Contract identified or required to be identified in Part 7.17(a) of the    
Disclosure Letter is in full force and effect and is valid and enforceable in   
accordance with its terms against Acquired Company in accordance with their     
respective terms except as such enforceability may be limited by (i) bankruptcy,
insolvency, moratorium, reorganization, fraudulent transfer and other similar   
laws relating to or affecting the enforcement of debtors' and creditors' rights 
generally, (ii) general principles of equity, and (iii) the discretion of a     
court or other adjudicative body.                                               

     (d)   Except as set forth in Part 7.17(d) of the Disclosure Letter:

               (i)    the Acquired Company and the Subsidiary, respectively, is,
         and at all times since January 1,1998 has been, in full compliance with
       all material applicable terms and requirements of each Contract under
        which the Acquired Company or the Subsidiary has or had any obligation
        or liability or by which the Acquired Company or the Subsidiary of any
       of the assets owned or used by the Acquired Company or the Subsidiary
is or was bound;                                              

        (ii)   each other Person that has or had any obligation or
      liability under any Contract under which the Acquired Company or the
        Subsidiary has or had any rights is, and at all times since January 1,
      1998 has been, in full compliance with all material applicable terms
and requirements of such Applicable Contract;                 

               (iii)  no event has occurred or circumstance exists that (with or
    without notice or lapse of time) may contravene, conflict with, or
   result in a material violation or breach of, or give the Acquired
  Company or the Subsidiary or other Person the right to declare a
        default or exercise any remedy under, or to accelerate the maturity or
    performance of, or to cancel, terminate, or modify, any Applicable
Contract; and                                                 

              (iv)   Neither the Acquired Company nor the Subsidiary has given
    to or received from any other Person, at any time since January 1,
        1998, any notice regarding any actual, alleged, possible, or potential
    violation or breach of, or default under, any Applicable Contract.

   (e)   There are no renegotiations of, attempts to renegotiate, or
outstanding rights to renegotiate any material amounts paid or payable to the   
Acquired Company or the Subsidiary under current or completed Contracts with any
Person and no such Person has made written demand for such renegotiation.       

   (f)   The Contracts relating to the sale, design, manufacture, or
provision of products or services by the Acquired Company or the Subsidiary have
been entered into in the Ordinary Course of Business and have been entered into 
without the commission of any act alone or in concert with any other Person, or 
any consideration having been paid or promised, that is or would be in material 
violation of any Legal Requirement.                                             

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7.18  INSURANCE.                                              

(a)   Acquired Company has delivered to Buyer:                

             (i)    true and complete copies of all policies of insurance to
        which the Acquired Company or Subsidiary is a party or under which the
         Acquired Company or Subsidiary, or any director of the Acquired Company
or Subsidiary is insured.                                     

             (ii)   true and complete copies of all pending applications for
policies of insurance; and                                    

           (iii)  any statement by the auditor of the Acquired Company's
   financial statements with regard to the adequacy of such entity's
coverage or of the reserves for claims.                       

(b)   Part 7.18(b) of the Disclosure Letter describes:        

       (i)    any self-insurance arrangement by or affecting the
  Acquired Company, including any reserves established thereunder;

        (ii)   any contract or arrangement, other than a policy of
    insurance, for the transfer or sharing of any risk by the Acquired
Company; and                                                  

             (iii)  all obligations of the Acquired Company to third parties
        with respect to insurance (including such obligations under leases and
         service agreements) and identifies the policy under which such coverage
is provided.                                                  

      (c)   Part 7.18(c) of the Disclosure Letter sets forth, by year, for
the current policy year and each of the four (4) preceding policy years:        

        (i)    a summary of the loss experience under each policy;

         (ii)   a statement describing each claim under an insurance
 policy for an amount in excess of $25,000.00, which sets forth:

(A)  the name of the claimant;      

                (B)  a description of the policy by insurer, type of
insurance, and period of coverage; and            

                     (C)  the amount and a brief description of the claim; and

              (iii)  a statement describing the loss experience for all claims
         that were self-insured, including the number and aggregate cost of such
claims.                                                       

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     (d)   Except as set forth on Part 7.18(d) of the Disclosure Letter:

             (i)    All policies to which the Acquired Company or Subsidiary
is a party or that provide coverage to the Acquired Company or
  Subsidiary or any director or officer of the Acquired Company or
Subsidiary.                                                   

(A)  are valid and outstanding;     

                    (B)  to the knowledge of the Acquired Company are issued
    by an insurer that is financially sound and reputable;

                    (C)  taken together, provide adequate insurance coverage
           for the assets and the operations of the Acquired Company and
Subsidiary for the risks insured;                 

             (D)  are sufficient for compliance with all Legal
          Requirements and Contracts to which the Acquired Company and
     Subsidiary is a party or by which any of them is bound;

                     (E)  will continue in full force and effect following the
consummation of the Contemplated Transactions; and

             (F)  do not provide for any retrospective premium
            adjustment or other experienced-based liability on the part of
the Acquired Company or Subsidiary.               

              (ii)   Neither the Acquired Company nor Subsidiary has received:

                     (A)  any refusal of coverage or any notice that a defense
will be afforded with reservation of rights; or   

                   (B)  any notice of cancellation or any other indication
               that any insurance policy is no longer in full force or effect or
         will not be renewed or that the issuer of any policy is not
    willing or able to perform its obligations thereunder;

               (iii)  The Acquired Company and Subsidiary have paid all premiums
      due, and have otherwise performed all of its respective obligations,
    under each policy to which the Acquired Company is a party or that
   provides coverage to the Acquired Company, Subsidiary or director
thereof; and                                                  

              (iv)   The Acquired Company and the Subsidiary have given notice
to the insurer of all claims that may be insured thereby.     

7.19  ENVIRONMENTAL MATTERS.                                  

Except as set forth in part 7.19 of the Disclosure Letter:    

(a)   To the Knowledge of the Acquired Company:               

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               (i)    The Acquired Company and the Subsidiary, respectively, is,
      and at all times has been, in full compliance with, and has not been
        and is not in violation of or liable under, any Environmental Law; and

            (ii)   Neither the Acquired Company nor the Subsidiary has any
         basis to expect, nor has it or any other Person for whose conduct it is
     or may be held to be responsible received, any actual or Threatened
     order, notice, or other communication from any Governmental Body or
        private citizen acting in the public interest, or the current or prior
 owner or operator of any Facilities, of any actual or potential
      violation or failure to comply with any Environmental Law, or of any
      actual or Threatened obligation to undertake or bear the cost of any
      Environmental, Health, and Safety Liabilities with respect to any of
 the Facilities or any other properties or assets (whether real,
        personal, or mixed) in which the Acquired Company has had an interest,
      or with respect to any property or Facility at or to which Hazardous
         Materials were generated, manufactured, refined, transferred, imported,
    used, or processed by the Acquired Company or any other Person for
         whose conduct it is or may be held responsible, or from which Hazardous
         Materials have been transported, treated, stored, handled, transferred,
disposed, recycled, or received.                              

         (b)   To the Knowledge of the Acquired Company, there are no pending or
Threatened claims, Encumbrances, or other restrictions of any nature, resulting 
from any Environmental, Health, and Safety Liabilities or arising under or      
pursuant to any Environmental Law, with respect to the operation by the Acquired
Company or Subsidiary of the Facilities of the Acquired Company or Subsidiary or
with respect to any other properties and assets (whether real, personal, or     
mixed) which are owned or leased by the Acquired Company or Subsidiary.         

      (c)   To the Knowledge of the Acquired Company, neither the Acquired
Company nor the Subsidiary has any basis to expect, nor has either of them or   
any other Person for whose conduct it is or may be held responsible, received,  
any citation, directive, inquiry, notice, Order, summons, warning, or other     
communication that relates to Hazardous Activity, Hazardous Materials, or any   
alleged, actual, or potential violation or failure to comply with any           
Environmental Law, or of any alleged, actual, or potential obligation to        
undertake or bear the cost of any Environmental, Health, and Safety Liabilities 
with respect to any of the Facilities or any other properties or assets (whether
real, personal, or mixed) in which the Acquired Company had an interest, or with
respect to any property or facility to which Hazardous Materials generated,     
manufactured, refined, transferred, imported, used, or processed by the Acquired
Company or any other Person for whose conduct it is or may be held responsible, 
have been transported, treated, stored, handled, transferred, disposed,         
recycled, or received.                                                          

      (d)   To the Knowledge of the Acquired Company, neither the Acquired
Company nor the Subsidiary, nor or any other Person for whose conduct it is or  
may be held responsible, has any Environmental, Health, and Safety Liabilities  
with respect to the Facilities or with respect to any other properties and      
assets (whether real, personal, or mixed) which the Acquired Company or         
Subsidiary (or any predecessor of either) owns or leases.                       

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        (e)   To the Knowledge of the Acquired Company, there are no Hazardous
Materials present on or in the Environment within the Facilities including any  
Hazardous Materials contained in barrels or other containers, either temporary  
or permanent, and deposited within the Facilities. To the Knowledge of the      
Acquired Company, neither the Acquired Company nor the Subsidiary nor any other 
Person for whose conduct it is or may be held responsible, or any other Person, 
has permitted or conducted, or is aware of, any Hazardous Activity within the   
Facilities except in full compliance with all applicable Environmental Laws.    

      (f)   There has been no Release or, to the Knowledge of the Acquired
Company, Threat of Release, of any Hazardous Materials at or from the           
Facilities.                                                                     

    (g)   Neither the Acquired Company nor Subsidiary has received any
reports, studies, analyses, tests, or monitoring initiated by the Acquired      
Company or the Subsidiary pertaining to Hazardous Materials or Hazardous        
Activities in, on, or under the Facilities, or concerning compliance by the     
Acquired Company or any other Person for whose conduct they are or may be held  
responsible, with Environmental Laws.                                           

    (h)   Neither the Acquired Company nor Subsidiary has received any
notice from any Governmental Body or other Person that there has been any       
Release of Hazardous Materials or violation of Environmental Laws with respect  
to the premises of which the Facilities are a part.                             

7.20  EMPLOYEES.                                              

  (a)   Part 7.20 of the Disclosure Letter contains a complete and
accurate list of the following information for each employee or director of the 
Acquired Company and the Subsidiary, including each employee on leave of absence
or layoff status: employer; name; job title; current compensation; and vacation 
in excess of one week accrued and carried over.                                 

    (b)   No Key Employee of the Acquired Company is a party to, or is
otherwise bound by, any agreement or arrangement, including any confidentiality,
noncompetition, or proprietary rights agreement, between such employee or       
director and any other Person ("PROPRIETARY RIGHTS AGREEMENT") that in any way  
adversely affects or will affect (i) the performance of his duties as an        
employee or director of the Acquired Company, or (ii) the ability of the        
Acquired Company or the Subsidiary to conduct its business, including any       
Proprietary Rights Agreement with the Acquired Company by any such employee or  
director. To the Acquired Company's Knowledge, no Key Employee of the Acquired  
Company intends to terminate his employment with the Acquired Company.          

      (c)   No retired employee or director of the Acquired Company or the
Subsidiary, or their dependents is receiving benefits or scheduled to receive   
benefits in the future, except under the Acquired Company's Qualified Plan.     

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7.21  LABOR RELATIONS; COMPLIANCE.                            

     The Acquired Company has never been or is a party to any collective
bargaining or other labor Contract. There has not been, there is not presently  
pending or existing, and there is not Threatened:                               

   (a)   any strike, slowdown, picketing, work stoppage, or employee
grievance process;                                                              

         (b)   any Proceeding against or affecting the Acquired Company relating
to the alleged violation of any Legal Requirement pertaining to labor relations 
or employment matters, including any charge or complaint filed by an employee or
union with the National Labor Relations Board, the Equal Employment Opportunity 
Commission, or any comparable Governmental Body, organizational activity, or    
other labor or employment dispute against or affecting any of the Acquired      
Company or their premises; or                                                   

    (c)   any application for certification of a collective bargaining
agent. No event has occurred or circumstance exists that could provide the basis
for any work stoppage or other labor dispute. There is no lockout of any        
employees by the Acquired Company, and no such action is contemplated by the    
Acquired Company. The Acquired Company has complied in all respects with all    
Legal Requirements relating to employment, equal employment opportunity,        
nondiscrimination, immigration, wages, hours, benefits, collective bargaining,  
the payment of social security and similar Taxes, occupational safety and       
health, and plant closing. The Acquired Company is not liable for the payment of
any compensation, damages, Taxes, fines, penalties, or other amounts, however   
designated, for failure to comply with any of the foregoing Legal Requirements. 

7.22  INTELLECTUAL PROPERTY.                                  

       (a)   INTELLECTUAL PROPERTY ASSETS -- The term "INTELLECTUAL PROPERTY
ASSETS" includes:                                                               

    (i)    the names "ATS Money Systems, Inc," "Innovative
Electronics") and all fictional business names, trading names,
         registered and unregistered trademarks, service marks, and applications
(collectively, "MARKS");                                      

       (ii)   all patents and patent applications (collectively,
"PATENTS");                                                   

           (iii)  all copyrights in both published works and unpublished
works (collectively, "COPYRIGHTS");                           

            (iv)   all rights in mask works (collectively, "RIGHTS IN MASK
WORKS"); and                                                  

           (v)    all know-how, trade secrets, confidential information,
customer lists, software, technical information, data, process
    technology, plans, drawings, and blue prints (collectively, "TRADE
    SECRETS"); owned, used, or licensed by the Acquired Company or the
Subsidiary as licensee or licensor.                           

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      (b)   AGREEMENTS -- Part 7.22(b) of the Disclosure Letter contains a
complete and accurate list and summary description, including any royalties paid
or received by the Acquired Company, of all Intellectual Property Assets and all
Contracts relating to the Intellectual Property Assets to which the Acquired    
Company or the Subsidiary is a party or by which the Acquired Company or the    
Subsidiary is bound, except for any license implied by the sale of a product and
perpetual, paid-up licenses for commonly available software programs with a     
value of less than $25,000.00 under which the Acquired Company or the Subsidiary
is the licensee. There are no outstanding and, to the Acquired Company's        
Knowledge, no Threatened disputes or disagreements with respect to any such     
agreement.                                                                      

(c)   KNOW-HOW NECESSARY FOR THE BUSINESS                     

           (i)    The Intellectual Property Assets owned by the Acquired
         Company and the Subsidiary are all those necessary for the operation of
     the respective businesses of the Acquired Company and Subsidiary as
         they are currently conducted or as reflected in any business plan given
      to Buyer. The Acquired Company or the Subsidiary is the owner of all
        right, title, and interest in and to each of the Intellectual Property
   Assets, free and clear of all liens, security interests, charges,
        encumbrances, equities, and other adverse claims, and has the right to
       use without payment to a third party all of the Intellectual Property
Assets.                                                       

              (ii)   Those Employees whose names are set forth in Part 7.20(c)
   of the Disclosure Letter have executed written Contracts with the
        Acquired Company or the Subsidiary that assign to the Acquired Company
or the Subsidiary all rights to any inventions, improvements, 
      discoveries, or information relating to the business of the Acquired
       Company or the Subsidiary. No employee of the Acquired Company or the
      Subsidiary has entered into any Contract that restricts or limits in
        any way the scope or type of work in which the employee may be engaged
       or requires the employee to transfer, assign, or disclose information
      concerning his work to anyone other than the Acquired Company or the
Subsidiary.                                                   

(d)   PATENTS                                                 

              (i)    Part 7.22(d) of the Disclosure Letter contains a complete
     and accurate list and summary description of all Patents which have
      been applied for by the Acquired Company or the Subsidiary and which
   the Acquired Company or the Subsidiary holds all right, title and
        interest in, free and clear of all liens, security interests, charges,
     encumbrances, equities. Other than Patents which are the subject of
       pending applications, neither the Acquired Company nor the Subsidiary
is the owner of any Patents.                                  

              (ii)   The pending Patent application has not been nor is it now
     involved in any interference, reissue, reexamination, or opposition
proceeding.                                                   

           (iii)  Other than as set forth in Part 7.22 of the Disclosure
        Letter, none of the products manufactured and sold, nor any process or
   know-how used, by the Acquired Company infringes or is alleged to
     infringe any patent or other proprietary right of any other Person.

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           (iv)   All products made, used, or sold under pending Patents
have been marked with the proper patent notice.               

(e)   TRADEMARKS                                              

              (i)    Part 7.22(e) of Disclosure Letter contains a complete and
    accurate list and summary description of all Marks. Subject to the
       final action by the Patent and Trademark Office, the Acquired Company
         or the Subsidiary is the owner of all right, title, and interest in and
        to each of the Marks, free and clear of all liens, security interests,
charges, encumbrances, equities, and other adverse claims.    

        (ii)   All Marks that have been registered with the United
         States Patent and Trademark Office are currently in compliance with all
   formal legal requirements (including the timely post-registration
filing of affidavits of use and incontestability and renewal  
      applications), are valid and enforceable, to the extent final action
        has been taken by the Patent and Trademark office, and are not subject
       to any maintenance fees or Taxes or actions falling due within ninety
(90) days after the Closing Date.                             

           (iii)  No Mark has been or is now involved in any opposition,
         invalidation, or cancellation and, to the Acquired Company's Knowledge,
    no such action is Threatened with the respect to any of the Marks.

             (iv)   To Acquired Company's Knowledge, there is no potentially
    interfering trademark or trademark application of any third party.

              (v)    To Acquired Company's Knowledge, no Mark is infringed or,
     has been challenged or threatened in any way. To Acquired Company's
        Knowledge, none of the Marks used by the Acquired Company infringes or
      is alleged to infringe any trade name, trademark, or service mark of
any third party.                                              

          (vi)   All products and materials containing a Mark bear the
proper federal registration notice where permitted by law.    

(f)   COPYRIGHTS                                              

              (i)    Part 7.22(f) of the Disclosure Letter contains a complete
      and accurate list and summary description of all Copyrights owned by
     the Acquired Company or the Subsidiary. The Acquired Company or the
     Subsidiary is the owner of all right, title, and interest in and to
         each of the Copyrights. All Copyrights are free and clear of all liens,
        security interests, charges, encumbrances, equities, and other adverse
claims.                                                       

(ii)   The Copyrights have not been registered.   

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               (iii)  To the Acquired Company's Knowledge, no Copyright is owned
        by the Acquired Company or Subsidiary infringed or has been challenged
    or threatened in any way. None of the subject matter of any of the
     Copyrights infringes or is alleged to infringe any copyright of any
         third party or is a derivative work based on the work of a third party.

               (iv)   To the Acquired Company's Knowledge, all works encompassed
      by the Copyrights have been marked with the proper copyright notice.

(g)   TRADE SECRETS                                           

         (i)    With respect to each Trade Secret, the documentation
       relating to such Trade Secret is current, accurate, and sufficient in
         detail and content to identify and explain it and to allow its full and
proper use without reliance on the knowledge or memory of any 
individual.                                                   

           (ii)   The Acquired Company and the Subsidiary have taken all
     reasonable precautions to protect the secrecy, confidentiality, and
value of their Trade Secrets.                                 

              (iii)  The Acquired Company or Subsidiary have good title and an
 absolute (but not necessarily exclusive) right to use the Trade
    Secrets. The Trade Secrets are not part of the public knowledge or
     literature, and, to the Knowledge of the Acquired Company, have not
    been used, divulged, or appropriated either for the benefit of any
   Person (other than one or more of the Acquired Company) or to the
     detriment of the Acquired Company or Subsidiary. No Trade Secret is
      subject to any adverse claim or has been challenged or threatened in
any way.                                                      

7.23  CERTAIN PAYMENTS.                                       

         Neither the Acquired Company nor the Subsidiary, nor director, officer,
agent, or employee of the Acquired Company or the Subsidiary, or any other      
Person associated with or acting for or on behalf of the Acquired Company or the
Subsidiary, has directly or indirectly:                                         

     (a)   made any contribution, gift, bribe, rebate, payoff, influence
payment, kickback, or other payment to any Person, private or public, regardless
of form, whether in money, property, or services:                               

        (i)    to obtain favorable treatment in securing business;

         (ii)   to pay for favorable treatment for business secured;

             (iii)  to obtain special concessions or for special concessions
    already obtained, for or in respect of the Acquired Company or the
Subsidiary or (iv) in violation of any Legal Requirement; or  

     (b)   established or maintained any fund or asset that has not been
recorded in the books and records of the Acquired Company or Subsidiary.        

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7.24  DISCLOSURE.                                             

         No representation or warranty of Acquired Company in this Agreement and
no statement in the Disclosure Letter omits to state a material fact necessary  
to make the statements herein or therein, in light of the circumstances in which
they were made, not misleading.                                                 

7.25  RELATIONSHIPS WITH RELATED PERSONS.                     

         No Related Person of Acquired Company has, or since January 1, 1998 has
had, any interest in any property (whether real, personal, or mixed and whether 
tangible or intangible), used in or pertaining to the Acquired Company's        
business. No Related Person of Acquired Company is, or since August 28, 1987 has
owned (of record or as a beneficial owner) an equity interest or any other      
financial or profit interest in, a Person that has (i) had business dealings or 
a material financial interest in any transaction with the Acquired Company, or  
(ii) engaged in competition with the Acquired Company with respect to any line  
of the products or services of the Acquired Company (a "COMPETING BUSINESS") in 
any market presently served by the Acquired Company except for less than one    
percent of the outstanding capital stock of any Competing Business that is      
publicly traded on any recognized exchange or in the over-the-counter market.   
Except as set forth in Part 7.25 of the Disclosure Letter, no Related Person of 
Acquired Company is a party to any Contract with, or has any claim or right     
against, the Acquired Company.                                                  

7.26  BROKERS OR FINDERS.                                     

         Except as set forth in Part 7.25 of the Disclosure Letter, the Acquired
Company and its agents have incurred no obligation or liability, contingent or  
otherwise, for brokerage or finders' fees or agents' commissions or other       
similar payment in connection with this Agreement.                              

7.27  HSR ACT.                                                

         The Acquired Company is not controlled by any person within the meaning
of the HSR Act, and the regulations promulgated thereunder.                     

7.28  PRODUCT DESIGN; WARRANTIES.                             

      (a)   Except as set forth in Part 7.28 (a) of the Disclosure Letter,
the Acquired Company or the Subsidiary is not, and has not agreed to become,    
responsible for any consequential, exemplary or punitive damages or made any    
express warranties to third parties with respect to any products created,       
manufactured, sold, distributed or licensed, or any services rendered, by the   
Acquired Company;                                                               

     (b)   There are no warranties (express or implied) outstanding with
respect to any such products or services other than any such implied by law     
pursuant to the Uniform Commercial Code or the Acquired Company's customer      
purchase order or contract forms, all of which have been provided to the Buyer; 

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         (c)   Except as set forth in Part 7.28(a) of the Disclosure Letter, the
Acquired Company or the Subsidiary has no Knowledge of any design, manufacturing
or other defects, latent or otherwise, with respect to any such products;       

      (d)   The Acquired Company has not modified or expanded its warranty
obligation to any customer beyond that set forth in the exceptions described    
above or in the Disclosure Letter. No products have been sold or distributed by 
the Acquired Company under an understanding that such products would be         
returnable other than in accordance with the Acquired Company's written standard
return policy.                                                                  

7.29  PROXY MATERIALS.                                        

   The Proxy Statement and all other information with respect to the
Acquired Company and its officers and directors to be provided to holders of    
Acquired Company Common Shares (the "SHAREHOLDER INFORMATION") eligible to vote 
at the Acquired Company Shareholder Meeting to be held pursuant to Section 9.7  
will not, on the date furnished to the Acquired Company Shareholders or on the  
Closing Date, as then amended or supplemented, contain any statement which, at  
the time and in light of the circumstances under which it is made, is false or  
misleading with respect to any material fact or omits to state any material fact
required to be stated therein or necessary in order to make the statements      
therein not false or misleading.                                                

7.30  SECURITIES LAW COMPLIANCE.                              

         Issuance of all shares of stock, options, warrants and other securities
issued by the Acquired Company (and any predecessor entity) have been issued in 
full and complete compliance with the Exchange Act and the Securities Act and   
all other applicable securities laws.                                           

8.       REPRESENTATIONS AND WARRANTIES OF BUYER.                               

Buyer represents and warrants to Acquired Company as follows: 

8.1   ORGANIZATION AND GOOD STANDING.                         

         (a)   ATSMACO is a corporation duly organized, validly existing, and in
good standing under the laws of the State of New Jersey. De La Rue Inc. is a    
corporation duly organized, validly existing and in good standing under the laws
of Virginia.                                                                    

         (b)   True and complete copies of the Organizational Documents of De La
Rue Inc. and of ATSMACO as currently in effect, have been delivered to the      
Acquired Company.                                                               

8.2   AUTHORITY; NO CONFLICT.                                 

      (a)   This Agreement, subject to any contingencies set forth herein,
constitutes the legal, valid, and binding obligation of Buyer, enforceable      
against Buyer in accordance with its terms. Upon the execution and delivery of  
the documents to be executed by Buyer at Closing (collectively, the "BUYER'S    
CLOSING DOCUMENTS"), the Buyer's Closing Documents will at the time of Closing  

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constitute the legal, valid, and binding obligations of Buyer, enforceable      
against Buyer in accordance with their respective terms. Buyer has the absolute 
and unrestricted right, power, and authority to execute and deliver this        
Agreement and the Buyer's Closing Documents and to perform its obligations under
this Agreement and the Buyer's Closing Documents.                               

         (b)   Neither the execution and delivery of this Agreement by Buyer nor
the consummation or performance of any of the Contemplated Transactions by Buyer
will directly or indirectly (with or without notice or lapse of time):          

               (i)    (A) contravene, conflict with or results in a violation of
        any provision of the Organizational Documents of the Buyer, or (B) any
       resolution adopted by the board of directors or stockholders of De La
Rue Inc. or ATSMACO;                                          

               (ii)   contravene, conflict with, or result in a violation of, or
       give any Governmental Body or other Person the right to challenge any
      of the Contemplated Transactions or to exercise any remedy or obtain
         any relief under, any Legal Requirement or any Order to which the Buyer
 or any of the assets owned or used by the Buyer may be subject;

              (iii)  contravene, conflict with, or result in a violation of or
     give any Person the right to prevent, delay, or otherwise interfere
with any of the Contemplated Transactions pursuant to:        

                   (A)  any provision of Buyer's Organizational Documents;

                    (B)  any resolution adopted by the board of directors or
the stockholders of Buyer;                        

                     (C)  any Legal Requirement or Order to which Buyer may be
subject; or                                       

                   (D)  any Contract to which Buyer is a party or by which
Buyer may be bound.                               

               (iv)   contravene, conflict with, or result in a violation of, or
     given any Governmental Body the right to revoke, withdraw, suspend,
         cancel, terminate, or modify, any Governmental Authorization that might
in any way affect the Buyer's right or ability to perform its 
obligations under this Agreement or carry out the Contemplated
Transactions; or                                              

            (v)    result in the imposition or creation of any Encumbrance
       upon or with respect to any of the assets owned or used by the Buyer.

The execution, delivery and performance of this Agreement and the Contemplated  
Transactions have been duly authorized and approved by the board of directors   
and shareholders of ATSMACO and by the board of directors and shareholders of De
La Rue Inc.                                                                     

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8.3   FINANCIAL STATEMENTS.                                   

  The balance sheet of De La Rue as at December 31, 2000 (the "DLR
BALANCE SHEET"), delivered to the Acquired Company, at or before the execution  
hereof, fairly presents the financial condition of De La Rue as at the date of  
such balance sheet, all in accordance with GAAP; the financial statements       
referred to in this Section 8.3 reflect the consistent application of such      
accounting principles in this balance sheet and in the year end balance sheet of
De La Rue Inc. as at the end of its most recent fiscal year. Since the date of  
the DLR Balance Sheet, there has not been any event or condition of any kind    
that, to the knowledge of Buyer, might have a material adverse impact on the    
financial condition of the Buyer. The Buyer has no liabilities or obligations of
any nature except for liabilities or obligations reflected or reserved against  
in the DLR Balance Sheet other than current liabilities incurred in the Ordinary
Course of Business since the date of the DLR Balance Sheet, which taken as a    
whole, do not and will not have a material adverse effect on the financial      
condition of the Buyer.                                                         

8.4   FINANCIAL ABILITY.                                      

  The Buyer has the financial ability to complete the Contemplated
Transactions. In addition, Buyer has delivered to the Acquired Company the      
comfort letter of De La Rue Holding, plc dated February 27, 2001 which is true, 
complete and accurate but which does not constitute a guarantee.                

8.5   NO MATERIAL ADVERSE CHANGE.                             

       Since the DLR Balance Sheet through the date of this Agreement, there
has not been any material adverse change in the business, operations,           
properties, assets of conditions of the Buyer and no event has occurred or      
circumstance exist that may result in such a material adverse change.           

8.6  DISCLOSURE.                                              

         (a)   No representation or warranty of Buyer in this Agreement omits to
state a material fact necessary to make the statements herein, in light of the  
circumstances in which they are made, not misleading.                           

   (b)   No notice given pursuant to this Agreement will contain any
untrue statement or omit to state a material fact necessary to make the         
statements therein or in this Agreement, in light of the circumstances in which 
they were made, not misleading.                                                 

      (c)   The DLR Balance Sheet does not contain any untrue statement or
omit to state a material fact necessary to make the statements therein, or in   
this Agreement, in light of the circumstances in which they were made, not      
misleading.                                                                     

8.7   INVESTMENT INTENT.                                      

       Buyer is acquiring the Shares for its own account and not with a view
to their distribution within the meaning of Section 2(11) of the Securities Act.

8.8   CERTAIN PROCEEDINGS.                                    

      There is no pending Proceeding that has been commenced against Buyer
and that challenges, or may have the effect of preventing, delaying, making     
illegal, or otherwise interfering with, any of the Contemplated Transactions. To
Buyer's Knowledge, no such Proceeding has been Threatened.                      

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8.9   BROKERS OR FINDERS.                                     

  Buyer and its officers and agents have incurred no obligation or
liability, contingent or otherwise, for brokerage or finders' fees or agents'   
commissions or other similar payment in connection with this Agreement and will 
indemnify and hold Acquired Company harmless from any such payment alleged to be
due by or through Buyer as a result of the action of Buyer or its officers or   
agents.                                                                         

8.10  INFORMATION IN PROXY STATEMENT.                         

  The information supplied by the Buyer for inclusion in the Proxy
Statement or in any announcement or letter of transmittal shall not, at the date
of the Proxy Statement (or any supplement thereto) is first mailed to the       
Shareholders of the Acquired Company or at the time of the Acquired Company     
Shareholder Meeting, or, as of the date of the announcement or letter of        
transmittal is mailed or announced, contain any untrue statement of a material  
fact or omit to state any material fact required to be stated therein in order  
to make the statements therein, in light of the circumstances under which they  
were made, not misleading. If at any time prior to the Acquired Company         
Shareholder Meeting any event or circumstance relating to the Acquisition       
Company or any of its affiliates, or its or their respective officers or        
directors should be discovered by the Buyer that should be set forth in a       
supplement to the Proxy Statement, Buyer shall promptly inform the Acquired     
Company.                                                                        

8.11  TERMINATION PAYMENT.                                    

  The amount of the Termination Payment is a reasonable good faith
estimate of direct and indirect costs incurred by Buyer in connection with this 
Agreement.                                                                      

9.       COVENANTS OF THE ACQUIRED COMPANY OR THE SUBSIDIARY PRIOR TO CLOSING   
DATE.                                                         

9.1   ACCESS AND INVESTIGATION.                               

   Between the date of this Agreement and the Closing Date, Acquired
Company will and will cause its Representatives to:                             

      (a)   afford Buyer and their Representatives full and free access to
the Acquired Company's personnel, properties, contracts, books and records, and 
other documents and data at reasonable times without unreasonable disturbance to
the operations of the Acquired Company or the Subsidiary;                       

         (b)   furnish Buyer and Buyer's Representatives with copies of all such
contracts, books and records, and other existing documents and data as Buyer may
reasonably request; and                                                         

      (c)   furnish Buyer and Buyer's Representatives with such additional
existing financial, operating, and other data and information as Buyer may      
reasonably request.                                                             

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9.2   OPERATION OF THE BUSINESSES OF THE ACQUIRED COMPANY.    

   Between the date of this Agreement and the Closing Date, Acquired
Company and Subsidiary will:                                                    

        (a)   conduct the business of the Acquired Company and Subsidiary only
in the Ordinary Course of Business;                                             

      (b)   use their Best Efforts to preserve intact the current business
organization of the Acquired Company and Subsidiary, keep available the services
of the current officers, employees, and agents of the Acquired Company and      
Subsidiary, and maintain the relations and good will with suppliers, customers, 
landlords, creditors, employees, agents, and others having business             
relationships with the Acquired Company and Subsidiary;                         

      (c)   confer with Buyer concerning operational matters of a material
nature; and                                                                     

        (d)   otherwise report at reasonable intervals to Buyer concerning the
status of the business, operations, and finances of the Acquired Company and    
Subsidiary.                                                                     

9.3   REQUIRED APPROVALS.                                     

       As promptly as practicable after the date of this Agreement, Acquired
Company will make all filings required by Legal Requirements to be made by them 
in order to consummate the Contemplated Transactions (including, if applicable, 
all filings under the HSR Act and the Exchange Act). Between the date of this   
Agreement and the Closing Date, Acquired Company will:                          

      (a)   cooperate with Buyer with respect to all filings that Buyer is
required by Legal Requirements to make in connection with the Contemplated      
Transactions; and                                                               

    (b)   cooperate with Buyer in obtaining all consents identified in
Schedule 4.2 (including taking all actions requested by Buyer to cause early    
termination of any applicable waiting period under the HSR Act).                

9.4   PAYMENT OF INDEBTEDNESS BY RELATED PERSONS.             

       Except as expressly provided in this Agreement, Acquired Company will
cause all indebtedness owed to the Acquired Company by any Related Person of    
Acquired Company to be paid in full at or prior to Closing.                     

9.5   NO SOLICITATION.                                        

      (a)   The Acquired Company shall not, and the Acquired Company shall
cause Subsidiary not to, and the Acquired Company agrees that it shall not      
authorize any of its directors, officers, employees, agents or Representatives  
to, directly or indirectly, solicit, initiate or encourage (including by way of 

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furnishing or disclosing non-public information) any inquiries, discussions or  
the making of any proposal with respect to any merger, consolidation or other   
business combination involving the Acquired Company or the acquisition of any   
nature of a material portion of the assets (including stock of Subsidiary) of   
the Company (a "COMPETING TRANSACTION") or negotiate or discuss a proposal with 
respect to a Competing Transaction with any person other than the Buyer and the 
directors, officers, employees and Representatives of the Buyer;                

      (b)   Notwithstanding the provisions of Section 9.5(a), the Acquired
Company and its directors, officers, employees, agents or Representatives may,  
in response to an unsolicited proposal (an "UNSOLICITED PROPOSAL") for or       
request to discuss a Competing Transaction from any Person that was not         
solicited by the Acquired Company after the date hereof and did not otherwise   
result from a breach of Section 9.5(a) do the following:                        

             (i)    Furnish information with respect to the Acquired Company
   to such Person pursuant to a customary confidentiality agreement;

             (ii)   Participate in any discussions or negotiations with such
Person regarding any Competing Transaction;                   

             (iii)  Conduct or participate in "due diligence" inquiries; and

          (iv)   Take all such other actions as the Acquired Company's
   Board of Directors determine are reasonably necessary in order to
review or respond to the proposed Competing Transaction.      

   (v)    If in receipt of an Unsolicited Proposal, may:

                     (A)  Withdraw or modify or propose to withdraw or modify,
     in a manner adverse to Buyer, the approval, adoption or
              recommendation by the Board of Directors of the Acquired Company
 of this Agreement or the Contemplated Transactions;

               (B)  Approve or recommend, or propose to approve or
recommend, any Competing Transaction;             

               (C)  Approve or recommend, or propose to approve or
        recommend, or execute or enter into, any letter of intent,
              agreement in principle, merger agreement, acquisition agreement,
           option agreement or other agreement relating to any Competing
Transaction or agree to do any of the foregoing;  

                 (D)  Submit any Competing Transaction at the Acquired
       Company Shareholder's Meeting for purpose of approval and
adoption of the Competing Transaction; or         

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                     (E)  Terminate this Agreement pursuant to Section 13.1(f)
             and pay Buyer the Termination Payment required by that section.

        (c)   The Acquired Company shall promptly (and in any event within two
(2) business days after the Board of Directors of the Acquired Company first    
considers any Unsolicited Proposal) advise Buyer orally and in writing of any   
such Unsolicited Proposal with respect to any Competing Transaction, the        
identity of the Person making such Unsolicited Proposal and the material terms  
and conditions thereof, including any material amendment or other modifications 
to the terms of such Competing Transaction or inquiry and shall keep the Buyer  
reasonably apprised of the status of any proposal relating to a Competing       
Transaction.                                                                    

9.6   BEST EFFORTS.                                           

      Subject to the provisions of Section 9.5, the Acquired Company will,
between the date of this Agreement and the Closing Date, use its Best Efforts to
cause the conditions in Section 11 to be satisfied.                             

9.7   ACQUIRED COMPANY SHAREHOLDER MEETING.                   

       (a)   The Acquired Company shall cause a meeting of Shareholders (the
"ACQUIRED COMPANY SHAREHOLDER MEETING") to be held as soon as reasonably        
practicable, for the purpose of voting to approve this Agreement and the Plan of
Merger and all other actions contemplated hereby or thereby which requires the  
approval of the Acquired Company's Shareholders. The board of directors of the  
Acquired Company shall, if consistent with the requirements of applicable law,  
recommend to its Shareholders the approval of the transactions contemplated by  
this Agreement.                                                                 

      (b)   As promptly as practicable, the Acquired Company shall prepare
and file with the SEC a proxy statement in connection with the matters to be    
considered at the Acquired Company Shareholder Meeting (such proxy statement,   
together with any amendments or supplements thereto is called the "PROXY        
STATEMENT"). Unless the Board of Directors of the Acquired Company has withdrawn
its recommendation of this Agreement in compliance with the terms of this       
Agreement, the Proxy Statement shall include the recommendation of the Board of 
Directors of the Acquired Company in favor of the approval of this Agreement.   
The Acquisition Company shall have the right to review and comment, before      
submission to the SEC, on the drafts of the Proxy Statement, on any comments    
from the SEC on the Proxy Statement and on any draft responses by the Company to
any SEC comments; PROVIDED, HOWEVER, that any such review and comment by the    
Acquisition Company shall be done in a timely manner that will not cause delay  
to the Acquired Company in processing SEC clearance; and PROVIDED, FURTHER, that
the contents of the Proxy Statement shall be prepared in the sole and absolute  
discretion of the Acquired Company.                                             

    (c)   All information contained in the Proxy Statement (other than
information provided by the Buyer for inclusion therein) shall not, at the date 
of the Proxy Statement (or any supplement thereto) is first mailed to the       
holders of the Acquired Company Common Stock or at the time of the Acquired     
Company Shareholder Meeting, contain any untrue statement of a material fact or 
omit to state any material fact required to be stated therein in order to make  
the statements therein, in light of the circumstances under which the are made, 

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not misleading. If, at any time prior to the Acquired Company Shareholder       
Meeting, any event or circumstance relating to the Acquired Company or the      
Subsidiary, or to its or their respective officers or directors, should be      
discovered by the Acquired Company that should be set forth in a supplement to  
the Proxy Statement, the Company will promptly inform the Acquisition Company,  
keep the Acquisition Company informed on a current basis on any developments    
thereafter and mail such supplement to the holders of the Acquired Company      
Common Stock within five (5) business days of the occurrence of any event or    
circumstance. All documents that the Acquired Company is responsible for filing 
with the SEC in connection with the Contemplated Transactions, including the    
Proxy Statement, will comply in all material respects with the applicable       
requirements of the Exchange Act and the rules and regulations thereunder       

9.8   EXISTING STOCK OPTION PLANS.                            

       The Acquired Company, prior to Closing, shall terminate, effective as
of the Effective Time, the existing employer stock option plan and directors    
stock option plan so that, after the Effective Time, no participant therein     
shall have the right to receive options with respect to the Acquired Company    
Common Stock after the Closing.                                                 

10.      COVENANTS OF BUYER PRIOR TO CLOSING DATE.                              

10.1  APPROVALS OF GOVERNMENTAL BODIES.                       

    As promptly as practicable after the date of this Agreement, Buyer
will, and will cause each of its Related Persons to, make all filings required  
by Legal Requirements to be made by them to consummate the Contemplated         
Transactions (including, if applicable, all filings under the HSR Act). Between 
the date of this Agreement and the Closing Date, Buyer will, and will cause each
Related Person to, cooperate with Acquired Company with respect to all filings  
that Acquired Company is required by Legal Requirements to make in connection   
with the Contemplated Transactions, and (ii) cooperate with Acquired Company in 
obtaining all consents identified in Part 7.2 of the Disclosure Letter; provided
that this Agreement will not require Buyer to dispose of or make any change in  
any portion of its business or to incur any other burden to obtain a            
Governmental Authorization.                                                     

10.2  NOTIFICATION.                                           

     Between the date of this Agreement and the Closing Date, Buyer will
promptly notify the Acquired Company in writing if Buyer becomes aware of any   
fact or condition that causes or constitutes a Breach of any of Buyer's         
representations and warranties as of the date of this Agreement, or if Buyer    
becomes aware of the occurrence after the date of this Agreement of any fact or 
condition that would (except as expressly contemplated by this Agreement) cause 
or constitute a Breach of any such representation or warranty had such          
representation or warranty been made as of the time of occurrence or discovery  
of such fact or condition. Should any such fact or condition require any change 
in the Disclosure Letter if the Disclosure Letter were dated the date of the    
occurrence or discovery of any such fact or condition, Acquired Company will    
promptly deliver to Buyer a supplement to the Disclosure Letter specifying such 
change. During the same period, Buyer will promptly notify the Acquired Company 

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of the occurrence of any Breach of any covenant of Buyer's in this Section 10 or
of the occurrence of any event that may make the satisfaction of the conditions 
in Section 11 impossible or unlikely.                                           

10.3  FINANCIAL ABILITY.                                      

    Between the date of this Agreement and the Closing Date, the Buyer
shall use its Best Efforts to obtain sufficient cash to make the payment        
required of it at the Closing and shall take no action to place any Encumbrance 
on its assets or otherwise take any action that would cause a material adverse  
change in its financial condition, properties or assets from that which existed 
on the date of the DLR Balance Sheet.                                           

10.4  BEST EFFORTS.                                           

         Between the date of this Agreement and the Closing Date, Buyer will use
its Best Efforts to cause the conditions in Section 12 to be satisfied.         

10.5  INDEMNIFICATION AND INSURANCE.                          

       (a)   For six (6) years after the Effective Time, the indemnification
obligations set forth in the Organizational Documents of the Acquired Company in
effect on the date of this Agreement shall survive the Merger as continuing     
obligations of the Surviving Corporation and shall not be amended, repealed or  
otherwise modified after the Effective Time in any manner that would adversely  
affect the rights thereunder of the individuals who, on or at any time prior to 
the Effective Time, were entitled to indemnification thereunder with respect to 
matters occurring prior to the Effective Time.                                  

       (b)   The Surviving Corporation shall maintain in effect, for six (6)
years, from and after the Effective Time, coverage of the directors and officers
of the Acquired Company in office at the Closing Date (the "COVERED PARTIES") on
terms not materially less favorable to the Covered Parties with respect to      
matters occurring prior to the Effective Time than the directors' and officers' 
liability insurance policies delivered to Buyer pursuant to Section 7.18 (the   
"D&O POLICIES").                                                                

10.6  PROXY MATERIALS.                                        

    The Buyer shall provide information requested for inclusion in the
Proxy Statement in a timely manner that will not cause delay to the Acquired    
Company in processing SEC clearance of the Proxy Statement.                     

11.      CONDITIONS PRECEDENT TO BUYER'S OBLIGATION TO CLOSE.                   

         Buyer's obligation to Execute the Articles of Merger and consummate the
Contemplated Transactions and to take the other actions required to be taken by 
Buyer at the Closing is subject to the satisfaction, at or prior to the Closing,
of each of the following conditions (any of which may be waived by Buyer, in    
whole or in part):                                                              

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11.1  ACCURACY OF REPRESENTATIONS.                            

  All representations and warranties of Acquired Company's in this
Agreement (considered collectively), and each of these representations and      
warranties (considered individually), must have been accurate in all material   
respects as of the date of this Agreement, and must be accurate in all material 
respects as of the Closing Date as if made on the Closing Date, subject to      
changes resulting from operation of the Acquired Company in the Ordinary Course 
of Business between the date of this Agreement and the Closing Date as such     
changes are reflected in any supplement to the Disclosure Letter as of such     
Closing Date.                                                                   

11.2  ACQUIRED COMPANY'S PERFORMANCE.                         

     (a)   All of the covenants and obligations that Acquired Company is
required to perform or to comply with pursuant to this Agreement at or prior to 
the Closing (considered collectively), and each of these covenants and          
obligations (considered individually), must have been duly performed and        
complied with in all material respects.                                         

         (b)   Each document required to be delivered pursuant to Section 5 must
have been delivered, and each of the other covenants and obligations of Acquired
Company hereunder must have been performed and complied with in all respects.   

11.3  CONSENTS.                                               

       Each of the Consents identified in Part 7.2 (b)(vi) of the Disclosure
Letter, must have been obtained and must be in full force and effect.           

11.4  DISSENTER'S RIGHTS.                                     

       The aggregate number of Shares of Acquired Company Common Stock whose
holders shall be Preliminary Dissenters shall not exceed five (5%) percent of   
the total number of the Acquired Company Common Shares eligible to vote at the  
Acquired Company Shareholder Meeting.                                           

11.5  NO PROHIBITION.                                         

      No notice shall have been given or Proceeding commenced the basis of
which is that the performance of any of the Contemplated Transactions would,    
directly or indirectly (with or without notice or lapse of time), materially    
contravene, or conflict with, or result in a material violation of, or cause    
Acquired Company to suffer any material adverse consequence under:              

(a)   any applicable Legal Requirement or Order; or           

(b)   any Legal Requirement or Order that has been published, 
introduced, or otherwise proposed by or before any Governmental Body.           

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11.6  NO PROCEEDINGS.                                         

         Since the date of this Agreement, there must not have been commenced or
Threatened against Acquired Company or against any Person affiliated with the   
Acquired Company, or against Buyer, or against any Person affiliated with Buyer,
any Proceeding:                                                                 

         (a)   involving any challenge to, or seeking damages or other relief in
connection with, any of the Contemplated Transactions; or                       

         (b)   that may have the effect of preventing, delaying, making illegal,
or otherwise interfering with any of the Contemplated Transactions.             

11.7  SHAREHOLDER CONSENT.                                    

  This Agreement and the Contemplated Transactions shall have been
authorized and approved by a majority of the holders of the Acquired Company    
Common Shares eligible to vote at the Acquired Company Shareholder Meeting.     

12.      CONDITIONS PRECEDENT TO THE OBLIGATION OF THE ACQUIRED COMPANY TO      
CLOSE.                                                        

     Acquired Company's obligation to execute the Articles of Merger and
consummate the Contemplated Transaction and to take the other actions required  
to be taken by Acquired Company at the Closing is subject to the satisfaction,  
at or prior to the Closing, of each of the following conditions (any of which   
may be waived by Acquired Company, in whole or in part):                        

12.1  ACCURACY OF REPRESENTATIONS.                            

 All of Buyer's representations and warranties in this Agreement
(considered collectively), and each of these representations and warranties     
(considered individually), must have been accurate in all material respects as  
of the date of this Agreement and must be accurate in all material respects as  
of the Closing Date as if made on the Closing Date.                             

12.2  BUYER'S PERFORMANCE.                                    

      (a)   All of the covenants and obligations that Buyer is required to
perform or to comply with pursuant to this Agreement at or prior to the Closing 
(considered collectively), and each of these covenants and obligations          
(considered individually), must have been performed and complied with in all    
material respects and;                                                          

    (b)   Buyer must have made the deliveries required by Section 5.2;

12.3  CONSENTS.                                               

       Each of the Consents identified in Part 7.2 (b)(vi) of the Disclosure
Letter must have been obtained and must be in full force and effect.            

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12.4  NO PROCEEDINGS.                                         

         Since the date of this Agreement, there must not have been commenced or
Threatened against Acquired Company or against any Person affiliated with the   
Acquired Company or against Buyer, or against any Persona affiliated with Buyer,
any Proceeding:                                                                 

         (a)   involving any challenge to, or seeking damages or other relief in
connection with, any of the Contemplated Transactions; or                       

         (b)   that may have the effect of preventing, delaying, making illegal,
or otherwise interfering with any of the Contemplated Transactions.             

12.5  NO PROHIBITION.                                         

      No notice shall have been given or Proceeding commenced the basis of
which is that the performance of any of the Contemplated Transactions would,    
directly or indirectly (with or without notice or lapse of time), materially    
contravene, or conflict with, or result in a material violation of, or cause    
Buyer to suffer any material adverse consequence under:                         

(a)   any applicable Legal Requirement or Order; or           

(b)   any Legal Requirement or Order that has been published, 
introduced, or otherwise proposed by or before any Governmental Body.           

12.6  DISSENTER'S RIGHTS.                                     

       The aggregate number of Shares of Acquired Company Common Stock whose
holders shall be Preliminary Dissenters shall not exceed five (5%) percent of   
the total number of Acquired Company Common Shares eligible to vote at the      
Acquired Company Shareholder Meeting.                                           

12.7  SHAREHOLDER CONSENT.                                    

  This Agreement and the Contemplated Transactions shall have been
authorized and approved by a majority of the holders of the Acquired Company    
Common Shares eligible to vote at the Acquired Company Shareholder Meeting.     

13.      TERMINATION AND REMEDIES.                                              

13.1  TERMINATION EVENTS.                                     

    This Agreement may, by notice given prior to or at the Closing, be
terminated:                                                                     

(a)   by the Acquired Company if                              

             (i)    a material Breach of any provision of this Agreement has
        been committed by the Buyer and such breach has not been waived by the
Acquired Company; or                                          

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            (ii)   holders of more than 5% of the total number of Acquired
Company Common Shares eligible to vote at the Acquired Company
         Shareholder meeting are Preliminary Dissenters and Buyer has not waived
such condition;                                               

         (iii)  if any of the other material conditions precedent in
Section 12 has not been satisfied of the Closing Date or if   
       satisfaction of such a condition is or becomes impossible (other than
        through the failure of Acquired Company to comply with its obligations
under this Agreement) and Acquired Company has not waived such
condition on or before the Closing Date; or                   

               (iv)   Acquired Company has the right to terminate this Agreement
  under Section 6.1(c) and such right has not been waived pursuant
thereto.                                                      

(b)   by Buyer if:                                            

             (i)    a material Breach of any provision of this Agreement has
    been committed by the Acquired Company and such breach affects the
      financial condition of the Acquired Company by more than $225,000.00
and such breach has not been waived by Buyer; or              

               (ii)   any supplement to the Disclosure Letter reveals an adverse
     change affecting the financial condition of the Acquired Company by
more than $225,000;                                           

            (iii)  holders of more than 5% of the total number of Acquired
     Company Shares eligible to vote at the Acquired Company Shareholder
meeting are Preliminary Dissenters;                           

              (iv)   any of the other material conditions precedent in Section
         11 have not been satisfied as of the Closing Date or if satisfaction of
   such a condition is or becomes impossible (other than through the
       failure of Buyer to comply with its obligations under this Agreement)
        and Buyer has not waived such condition on or before the Closing Date;
or.                                                           

          (v)    Buyer has the right to terminate this Agreement under
     Section 6.1(c) and such right has not been waived pursuant thereto.

(c)   by mutual consent of Buyer and Acquired Company;        

  (d)   by either Buyer or Acquired Company if the Closing has not
occurred on or before May 31, 2001, (provided, however, that if there are delays
caused by the receipt of a proposal for a Competing Transaction, Acquired       
Company shall not have the right to terminate under this Paragraph, but shall   
have the right to do so only under Section 13.1(f));                            

      (e)   automatically if at the Acquired Company Shareholder's Meeting
(including any adjournment thereof) this Agreement and the Merger contemplated  
thereby shall fail to be adopted by a vote of the Acquired Company Shareholders 
in accordance with Section 11.8; provided however, that if such failure is the  
result of submission of a Competing Transaction, the Acquired Company shall have
the obligation to make the Termination Payment to De La Rue at the time and in  
the manner set forth in Section 13.1(f);                                        

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  (f)   by the Acquired Company by Notice to Buyer if the Acquired
Company determines to terminate this Agreement by reason of a Competing         
Transaction pursuant to Section 9.5(b)(v)(E). In such event, the amount of Seven
Hundred Thousand and 00/100 ($700,000.00) Dollars (the "TERMINATION PAYMENT")   
shall be paid to Buyer by the Acquired Company. Such Termination Payment shall  
be paid by certified, bank or cashier's check payable to De La Rue (i) with the 
Notice of termination or (ii) within three (3) business days of any automatic   
termination. The Termination Payment shall be the sole remedy the Buyer is      
entitled to if the Acquired Company terminates the Agreement in accordance with 
this Subsection and the Acquired Company shall not be liable for Damages or any 
indemnification of the Buyer or any Indemnified Person with respect to any such 
termination.                                                                    

13.2  ELECTION TO CLOSE.                                      

  If Buyer has the right to terminate this Agreement under Section
13.1(b)(i) or 13.1(b)(ii), Buyer may, at Buyer's option and in Buyer's sole and 
absolute discretion, elect in writing to (i) waive Buyer's right to terminate   
this Agreement and proceed to Closing, in which case Buyer shall be deemed to   
have waived its rights to indemnification under Section 14.2 with respect to the
Breach or supplement to the Disclosure Letter giving rise to Buyer's termination
right; or (ii) for any claim for which alleged Damages do not in the aggregate  
exceed $700,000.00 for which the Buyer seeks to reserve its right to            
indemnification, Buyer may proceed to Closing while reserving Buyer's right to  
indemnification with respect to the Breach or supplement to the Disclosure      
Letter giving rise to Buyer's termination right, only if the Acquired Company   
consents thereto, which consent the Acquired Company may elect in its sole and  
absolute discretion to withhold. The Acquired Company shall have no authority to
consent to the election of option (ii) by Buyer where Buyer's indemnification   
claim exceeds the sum of Seven Hundred Thousand and 00/100 ($700,000.00)        
Dollars.                                                                        

13.3  EFFECT OF TERMINATION.                                  

       If this Agreement is terminated pursuant to Section 13.1, the Initial
Escrow Fund (less the amounts to be paid to the Acquired Company hereafter) and 
all Pre-Closing Interest shall be returned by the Agent to Buyer and, upon such 
return, all further obligations of the parties under this Agreement will        
terminate; except that if Acquired Company has terminated the Agreement as a    
result of the failure of Buyer to cause the Purchase Price, as adjusted to be   
paid in cash at the Closing, (i) Acquired Company shall be entitled to receive  
from the Agent an amount equal to Seven Hundred Thousand and 00/100             
($700,000.00) Dollars which Acquired Company represents to be a good faith      
estimate of its direct and indirect costs of this Agreement; and (ii) the       
balance of the Initial Escrow Fund and all Pre-Closing Interest shall be        
returned to Seller. Notwithstanding the foregoing, the obligations in Sections  
15.1 and 15.3 will survive.                                                     

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14.      INDEMNIFICATION; REMEDIES.                                             

     14.1  SURVIVAL; RIGHT TO INDEMNIFICATION NOT AFFECTED BY KNOWLEDGE.

    All representations, warranties, covenants, and obligations of the
Acquired Company in this Agreement, the Disclosure Letter, the supplements to   
the Disclosure Letter, the CEO Certificate and any other certificate or document
delivered by the Acquired Company pursuant to this Agreement will survive the   
Closing but shall not survive Termination. Except as hereinafter provided, the  
right to indemnification, payment of Damages or other remedy based on such      
representations, warranties, covenants, and obligations will not be affected by 
any investigation conducted with respect to, or any Knowledge acquired (or      
capable of being acquired) by Buyer at any time, whether before or after the    
execution and delivery of this Agreement or the Closing Date, with respect to   
the accuracy or inaccuracy of or compliance with, any such representation,      
warranty, covenant, or obligation. Notwithstanding the foregoing, if the Buyer  
had Knowledge prior to the Closing of any Breach by the Acquired Company that   
would have allowed Buyer to terminate this Agreement, pursuant to Section       
13.1(b), Buyer shall be deemed to have waived the Buyer's right to              
Indemnification or to any other remedy arising out of such Breach unless Buyer  
and the Acquired Company have agreed to close on the terms set forth in Section 
13.2.                                                                           

   14.2  INDEMNIFICATION AND PAYMENT OF DAMAGES BY ACQUIRED COMPANY.

  From and after Closing, Acquired Company will indemnify and hold
harmless Buyer and the Surviving Corporation (including any successor)          
(collectively, the "INDEMNIFIED PERSON") for, and will pay to the Indemnified   
Person the amount of, any direct loss, liability, claim, damage (excluding      
incidental, consequential, exemplary and punitive damages), expenses (including 
costs of investigation and defense and reasonable attorneys' fees) whether or   
not involving a third-party claim (collectively, "DAMAGES"), arising, directly  
or indirectly, from or in connection with:                                      

     (a)   any Breach of any representation or warranty made by Acquired
Company in this Agreement (other than a Breach that is deemed to have been      
waived by Buyer pursuant to Section 14.1);                                      

       (b)   any Breach by Acquired Company of any covenant or obligation of
Acquired Company in this Agreement (other than a Breach that is deemed to have  
been waived pursuant to Section 14.1).                                          

     The remedies provided in this Section 14.2 will be exclusive of any
other remedies and shall constitute the sole remedy that might otherwise be     
available to Buyer or other Indemnified Person absent this limitation.          

14.3  TIME LIMITATION.                                        

        The Acquired Company and the Shareholders shall have no liability with
respect to any matter that arises out of or results in any way from this        
Agreement or the Contemplated Transactions pursuant to this Agreement or        
otherwise unless on or before one (1) year from the Closing Date an Indemnified 
Person simultaneously notifies Shareholders Representative and the Agent of a   
claim specifying the factual basis of that claim in reasonable detail.          

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14.4  LIMITATIONS ON AMOUNT.                                  

   Acquired Company and the Shareholders will have no liability with
respect to the matters described in Section 14.2 or that otherwise arise out of 
or result in any way from this Agreement or the Contemplated Transactions that  
exceed, in the aggregate, the amount of the Escrow Fund.                        

14.5  ELIGIBLE CLAIMS AND AGGREGATE AMOUNT.                   

      The Acquired Company and the Shareholders will have no liability for
Damages for any individual claim whether arising out of a Third Party Claim or  
otherwise that is less than Fifteen Thousand ($15,000.00) Dollars and unless the
aggregate of all individual claims in excess of Fifteen Thousand ($15,000.00)   
Dollars ("ELIGIBLE CLAIMS") exceed Two Hundred Twenty Five Thousand and 001/00  
($225,000.00) (the "AGGREGATE AMOUNT"), in which case the Acquired Company and  
the Shareholders will have liability for all Eligible Claims.                   

14.6  PROCEDURE FOR INDEMNIFICATION--THIRD PARTY CLAIMS.      

        (a)   Promptly after receipt by the Surviving Corporation of notice of
the commencement of any Proceeding against it by a third party for an Eligible  
Claim the Surviving Corporation will give notice to the Shareholders            
Representative and the Agent of the commencement of such claim, Acquired Company
and the Shareholders Representative and specify in such notice with reasonable  
detail why Surviving Corporation is entitled to Indemnification.                

   (b)   The Surviving Corporation shall have the exclusive right to
defend, compromise, or settle such Proceeding, but the Acquired Company and its 
Shareholders shall not be bound by any compromise or settlement effected without
the consent of the Shareholders Representative. No Indemnified Person shall be  
entitled to Indemnification for any third party claim for which a settlement or 
compromise is effected without the consent of the Shareholders Representative.  

14.7  PROCEDURE FOR INDEMNIFICATION--OTHER CLAIMS.            

  (a)   A claim for indemnification for any matter not involving a
Proceeding on a third-party claim shall be asserted by the Indemnified Party by 
simultaneous Notice to the Shareholders Representative and the Agent and specify
in such notice with reasonable detail why Surviving Corporation is entitled to  
Indemnification.                                                                

        (b)   After the Closing, the parties to this Agreement will attempt to
settle any claim or controversy for which the Indemnified Parties have a right  
to indemnification arising out of or under this Agreement (the "DISPUTE")       
through consultation and negotiation in good faith and a spirit of mutual       
cooperation. However, at any time before or during such negotiations, or        
following any unsuccessful negotiations, either party may by written notice to  
the other demand that the Dispute be submitted to binding arbitration. The      
binding arbitration shall be conducted by JAMS/ENDISPUTE or such other          
alternative dispute resolution provider as may agreed upon by the parties (the  
"ADR SERVICE PROVIDER"). The arbitrator shall decide the Dispute applying the   
laws of the State of New Jersey. The arbitration shall take place in the State  
of New Jersey, in accordance with the ADR Service Provider's then current rules 
for arbitration of business disputes; provided, however, the parties shall be   
entitled to reasonable discovery (the "DISCOVERY"). If the parties cannot agree 
upon the Discovery, the Discovery shall be determined by the arbitrator. The    
cost of the ADR Service Provider shall initially be shared by the parties, with 
the prevailing party being entitled to recover its share of said costs from the 
other party. Judgment upon the award rendered by the arbitrator may be entered  
by any court having jurisdiction thereof. The arbitrator is not empowered to    
award Damages other than compensatory damages or in excess of the Escrow        
Indemnity Fund and shall otherwise apply the terms of the Agreement to the      
proceeding and his or her determination. Any negotiations which takes place     
pursuant to this Agreement shall be confidential and shall be treated as a      
compromise and settlement negotiations for purposes of the federal and state    
rules of evidence.                                                              

       Unless otherwise agreed upon by the parties, the arbitration shall be
conducted by a single arbitrator selected by mutual agreement of the parties    
within twenty (20) days after the date of submission of the Dispute to binding  
arbitration. If the parties cannot agree upon the arbitrator, the arbitrator    
shall be selected from a list of at least six (6) arbitrators provided by the   

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ADR Service Provider according to the following procedure: Each party shall rank
the arbitrators on the list by number, with one (1) being the highest rank. The 
arbitrator with the best ranking (i.e., the lowest combined number ranking shall
be the arbitrator.) In the event that more than one arbitrator has the best     
ranking, the arbitrator shall be selected by lot by the ADR Service Provider    
from those who have the best ranking.                                           

15.      GENERAL PROVISIONS.                                                    

15.1  EXPENSES.                                               

         Except as otherwise expressly provided in this Agreement, each party to
this Agreement will bear its respective expenses incurred in connection with the
preparation, execution, and performance of this Agreement and the Contemplated  
Transactions, and the assertion of any right or remedy arising out of a breach  
including all fees, costs and expenses of agents, representatives, counsel, and 
accountants. The Surviving Corporation will pay all Transaction Expenses in     
connection with this Agreement and the Contemplated Transactions.               

15.2  PUBLIC ANNOUNCEMENTS.                                   

        Prior to the execution of this Agreement, the Acquired Company and the
Buyer have agreed upon a form of public announcement which shall be issued at 9 
a.m. EST on the day following the execution hereof. The parties will consult, to
the extent feasible, prior to any further public announcement or similar        
publicity with respect to this Agreement or the Contemplated Transactions as to 
the substance, form and timing thereof. Acquired Company and Buyer will consult 
with each other concerning the means by which the Acquired Company' employees,  
customers, and suppliers and others having dealings with the Acquired Company   
will be informed of the Contemplated Transactions, and Buyer will be invited to 
be present for any such communication.                                          

15.3  NONDISCLOSURE.                                          

 The Acquired Company and De La Rue entered into a Nondisclosure
Agreement dated as of November 22, 2000 (the "NONDISCLOSURE AGREEMENT"). The    
terms and provisions of such Nondisclosure Agreement are hereby incorporated in 
and made a part of this Agreement as if set forth at length. Notwithstanding    
anything to the contrary contained in this Agreement, all of the provisions of  
the Nondisclosure Agreement shall survive the Termination of this Agreement.    

15.4  NOTICES.                                                

     All notices, consents, waivers, and other communications under this
Agreement must be in writing and will be deemed to have been duly given when (a)
delivered by hand (with written confirmation of receipt), (b) sent by telecopier
(with written confirmation of receipt), provided that a copy is simultaneously  
mailed by registered mail, return receipt requested, or (c) when received by the
addressee, if sent by a nationally recognized overnight delivery service        
(receipt requested), in each case to the appropriate addresses and telecopier   
numbers set forth below (or to such other addresses and telecopier numbers as a 
party may designate by notice to the other parties):                            

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Acquired Company:                                             

ATS Money Systems, Inc.   
25 Rockwood Place         
  Englewood, New Jersey  07632
Attn: Gerard F. Murphy    
 Facsimile No.: 201-894-0958

Shareholders Representative:                                  

Thomas J. Carey           
52 Hominy Hill Road       
Colts Neck, NJ 07772      
  Facsimile No.:  732-866-0072

With a                                                        
Copy in Each Case to:                                         

                   Kraemer, Burns, Mytelka, Lovell & Kulka, P.A.
675 Morris Avenue         
    Springfield, New Jersey  07681
Attn: Ellen B. Kulka, Esq.
 Facsimile No.: 973-912-8700

Buyer or Surviving Corporation:                               

De La Rue plc             
De La Rue House           
Jays Close                
Viables                   
Basingstoke               
Hampshire RG22 4BS England
  Attn: C. Louise Fluker, Esq.
       Facsimile No.: 011-44-1256-605336

With a                                                        
Copy in Each Case to:                                         

Beattie Padovano, LLC     
50 Chestnut Ridge Road    
P.O. Box 244              
 Montvale, New Jersey  07645
 Attn: Adolph A. Romei, Esq.
 Facsimile No.: 201-573-9736

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Agent:            First Union National Bank                   
Corporate Trust Department
  21 South Street, Third Floor
  Morristown, New Jersey 07960
                  Att: Christopher E. Golabeck, Vice President
Facsimile No. 973-682-4539

15.5  JURISDICTION; SERVICE OF PROCESS.                       

        Any action or proceeding seeking to enforce any provision of, or based
on any right arising out of, this Agreement may be brought against any of the   
parties in the courts of the State of New Jersey, or, if it has or can acquire  
jurisdiction, in the United States District Court for the District of New       
Jersey, and each of the parties consents to the jurisdiction of such courts (and
of the appropriate appellate courts) in any such action or proceeding and waives
any objection to venue laid therein. Process in any action or proceeding        
referred to in the preceding sentence may be served on any party anywhere in the
world.                                                                          

15.6  FURTHER ASSURANCES.                                     

The parties agree:                                            

       (a)   to furnish upon request to each other such further information;

      (b)   to execute and deliver to each other such other documents; and

    (c)   to do such other acts and things, all as the other party may
reasonably request for the purpose of carrying out the intent of this Agreement 
and the documents referred to in this Agreement.                                

15.7  WAIVER.                                                 

      The rights and remedies of the parties to this Agreement are, to the
extent permitted in this Agreement, cumulative and not alternative. Except as   
otherwise set forth in this Agreement, neither the failure nor any delay by any 
party in exercising any right, power, or privilege under this Agreement or the  
documents referred to in this Agreement will operate as a waiver of such right, 
power, or privilege, and no single or partial exercise of any such right, power,
or privilege will preclude any other or further exercise of such right, power,  
or privilege or the exercise of any other right, power, or privilege. To the    
maximum extent permitted by applicable law:                                     

        (a)   no claim or right arising out of this Agreement or the documents
referred to in this Agreement can be discharged by one party, in whole or in    
part, by a waiver or renunciation of the claim or right unless in writing signed
by such party;                                                                  

        (b)   no waiver that may be given by a party will be applicable except
in the specific instance for which it is given; and                             

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         (c)   no notice to or demand on one party will be deemed to be a waiver
of any obligation of such party.                                                

15.8  ENTIRE AGREEMENT AND MODIFICATION.                      

     This Agreement including the Nondisclosure Agreement supersedes all
prior agreements between the parties with respect to its subject matter and     
constitutes (along with the documents referred to in this Agreement) a complete 
and exclusive statement of the terms of the agreement between the parties with  
respect to its subject matter. This Agreement may not be amended except by a    
written agreement executed by the party to be charged with the amendment.       

15.9  ASSIGNMENTS, SUCCESSORS, AND NO THIRD-PARTY RIGHTS.     

         Neither party may assign any of its rights under this Agreement without
the prior consent of the other parties. Subject to the preceding sentence, this 
Agreement will apply to, be binding in all respects upon, and inure to the      
benefit of the successors and permitted assigns of the parties. Nothing         
expressed or referred to in this Agreement will be construed to give any Person 
other than the parties to this Agreement any legal or equitable right, remedy,  
or claim under or with respect to this Agreement or any provision of this       
Agreement. This Agreement and all of its provisions and conditions are for the  
sole and exclusive benefit of the parties to this Agreement and their successors
and assigns.                                                                    

15.10 SEVERABILITY.                                           

        If any provision of this Agreement is held invalid or unenforceable by
any court of competent jurisdiction, the other provisions of this Agreement will
remain in full force and effect. Any provision of this Agreement held invalid or
unenforceable only in part or degree will remain in full force and effect to the
extent not held invalid or unenforceable.                                       

15.11 SECTION HEADINGS, CONSTRUCTION.                         

         The headings of Sections in this Agreement are provided for convenience
only and will not affect its construction or interpretation. All references to  
"Section" or "Sections" refer to the corresponding Section or Sections of this  
Agreement. All words used in this Agreement will be construed to be of such     
gender or number as the circumstances require. Unless otherwise expressly       
provided, the word "including" does not limit the preceding words or terms.     

15.12 GOVERNING LAW.                                          

        This Agreement will be governed by the laws of the State of New Jersey
without regard to conflicts of laws principles except to the extent that the    
Nevada Corporation Act applies to the Plan of Merger contained herein.          

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15.13 COUNTERPARTS.                                           

     This Agreement may be executed in one or more counterparts, each of
which will be deemed to be an original copy of this Agreement and all of which, 
when taken together, will be deemed to constitute one and the same agreement.   

  IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date first written above.                                   

ATTEST:                                     ATS MONEY SYSTEMS, INC.             

                                By: /s/ GERARD F. MURPHY
--------------------------------                --------------------------------
                                      Name: Gerard F. Murphy
                                Title: President

ADDITIONAL SIGNATURES ON NEXT PAGE

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  IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date first written above.                                   

ATTEST:                                     ATSMACO INC.                        

           By:
--------------------------------                --------------------------------
Secretary                                       President                       

ATTEST:                                     DE LA RUE INC.                      

/s/ ADOLPH A. ROMEI                         By: /s/ MICHAEL LITTLE              
--------------------------------                --------------------------------
Adolph A. Romei                                 Michael Little                  
Assistant Secretary                             President                       

69

Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘PREM14A’ Filing		Date		First		Last			Other Filings
Changed as of / Corrected on:		11/15/02
		5/31/01		66
Filed on / For Period End:		4/9/01
		3/1/01		7
		2/27/01		56
		1/10/01		15
		1/1/01		9		23
		12/31/00		7		56
		11/22/00		70
		2/1/00		7
		12/31/99		14		41			10KSB
		12/31/98		14					10KSB
		1/1/98		39		53
		12/31/97		14					10KSB
		12/31/94		34
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