Exhibit 10.1
December 30, 2008
AMENDED AND RESTATED EARNOUT AGREEMENT
     This Amended and Restated Earnout Agreement (“Agreement”) is made and
entered into as of April 10, 2008, among Agilysys, Inc., an Ohio corporation
(“Parent”), Agilysys NJ, Inc., a New Jersey corporation and wholly-owned
subsidiary of Parent (f/k/a Innovative Systems Design, Inc. d/b/a Innovativ
Systems Design, Inc.) (the “Company” or the “Surviving Corporation”), each of
Anthony Mellina, David Vogelzang and Frank G. Batula (the “Remaining Sellers”)
and, solely for purposes of acting as the representative for the Remaining
Sellers, Anthony Mellina (the “Seller Representative”).
RECITALS
     A. Pursuant to an Agreement and Plan of Merger, dated as of May 25, 2007
(the “Merger Agreement”), among Parent, Merger Sub, the Company, and Vincent
James Spinella, as the Stockholder Representative for the Company Stockholders
(as defined in the Merger Agreement), on July 2, 2007, Parent acquired the
Company through the merger of the Merger Sub with and into the Company with the
Company as the Surviving Corporation (the “Merger”).
     B. Pursuant to the terms of the Merger Agreement, Parent, Merger Sub, the
Company and Vincent James Spinella, as Stockholder Representative for the
Company Stockholders, entered into an Earnout Agreement, dated July 2, 2007 (the
“Original Agreement”), which Original Agreement provided that a portion of the
purchase price was to be calculated and paid as Additional Consideration based
upon the Surviving Corporation’s EBITDA (as defined in the Original Agreement)
over the Period (as defined in the Original Agreement).
     C. Pursuant to the terms of a Settlement, Withdrawal ands Release
Agreement, dated of even date herewith (the “Settlement Agreement”), among
Parent, the Company and the Company Stockholders, including the Sellers,
(i) Parent will, conditioned upon the execution and delivery of this Agreement
and the other conditions set forth in the Settlement Agreement, pay Thirty Five
Million Dollars ($35,000,000) to the Payment Agent for distribution to each
Company Stockholder; (ii) immediately upon such payment, the Company
Stockholders other than the Remaining Sellers agree to withdraw as parties to
and terminate all rights, interests and claims under the Original Agreement and
not become parties to this Agreement; and (iii) the parties hereto have agreed
to enter into this Amended and Restated Earnout Agreement to amend and restate
the Original Agreement.
     D. The Remaining Sellers have agreed to enter into and deliver this
Agreement in order to induce Parent and the Company to enter into the Settlement
Agreement and pay the Thirty Five Million Dollars ($35,000,000) to the Payment
Agent for distribution to each Company Stockholder.
     NOW, THEREFORE, in consideration of the premises and of the respective
covenants and provisions herein contained, Parent, the Company, the Remaining
Sellers and the Seller Representative agree as follows:

 

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ARTICLE I. DEFINITIONS
     1.1 Certain Defined Terms. Capitalized terms used but not otherwise defined
herein shall have the respective meanings given such terms in the Merger
Agreement. In addition to the terms defined in the Merger Agreement, for
purposes of this Agreement, the terms listed below have the following meanings.
     1.2 Additional Consideration means the amount determined in accordance with
Section 2.2 hereof.
     1.3 Business Plan is defined in Section 4.2.
     1.4 EBITDA is defined in Article III.
     1.5 Final Payment is defined in Section 2.2(d).
     1.6 Final Target means an amount equal to Fifty Million Dollars
($50,000,000).
     1.7 First Anniversary Payment means an amount equal to Thirty Five Million
Dollars ($35,000,000).
     1.8 Income Statement is defined in Section 2.2(b).
     1.9 Operationally Autonomous is defined in Section 4.3.
     1.10 Parent’s Accountants is defined in Section 3.1.
     1.11 Period means the first full eight (8) fiscal quarters commencing as of
the Closing Date.
     1.12 Quarterly Earn-Out Meetings is defined in Section 4.4.
     1.13 Seller Representative is defined in the Preamble and in
Section 5.9(a).
ARTICLE II. ADDITIONAL CONSIDERATION PAYMENT
     2.1 Nature of Additional Consideration Payment. The parties hereto
acknowledge that, contemporaneously with and subject to the execution and
delivery of this Agreement, the First Anniversary Payment was paid to the
Payment Agent for distribution to each Company Stockholder in the same
allocation and same manner as the Merger Consideration. The balance of the
Additional Consideration, if any, will be payable solely to the Remaining
Sellers as provided for in Section 2.2 below; provided, however, that such
Additional Consideration, which the Remaining Sellers acknowledge and agree is
inclusive of the First Anniversary Payment, in no event will exceed Fifty Eight
Million Six Hundred Fifty Thousand Dollars ($58,650,000) (the “Maximum Total
Payment”). The parties hereto acknowledge that the Maximum Total Payment in this
Agreement was calculated and determined as (i) the First Anniversary Payment
plus (ii) forty-three percent (43%) of the excess of the $90 million maximum
payment from the Original Agreement less the $35 million First Anniversary
Payment under this Agreement; with the forty-

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three percent (43%) representing the percentage of the Additional Consideration
allocable solely to the Remaining Sellers.
     2.2 Final Payment of Additional Consideration.
          (a) As soon as practical and in no event later than forty-five
(45) days after the end of the Period, Parent will determine for distribution to
each Remaining Seller to be allocated among the Remaining Sellers based on the
percentages next to their names on the signature page hereto (which percentages,
the Remaining Sellers acknowledge and agree, are based on their percentage
allocation of Merger Consideration in the Merger Agreement), the Additional
Consideration and any resulting Final Payment as determined in this Section 2.2.
Additional Consideration will be available only if the Surviving Corporation
generates EBITDA for the entire Period, greater than the Final Target. The
Additional Consideration will be paid as follows: (i) if EBITDA during the
Period is less than or equal to the Final Target, no Final Payment will be
payable or (ii) if EBITDA during the Period is greater than the Final Target,
then for each one dollar ($1.00) of EBITDA in excess of the Final Target, two
dollars ($2.00) of Additional Consideration will be payable in accordance with
Section 2.2(d) below up to the Maximum Total Payment of Additional Consideration
— comprised of both the First Anniversary Payment and the Final Payment — of
Fifty Eight Million Six Hundred Fifty Thousand Dollars ($58,650,000).
          (b) As soon as practical (and in no event later than sixty (60) days
after the end of the Period), Parent shall cause to be prepared and delivered to
the Seller Representative (i) an income statement of the Surviving Corporation
for the entire Period (the “Income Statement”) and (ii) a calculation of the
Additional Consideration, if any, based on the calculation of EBITDA for the
Period determined from the financial information contained in the Income
Statement, including such schedules and data as may be appropriate to support
such calculation. The Income Statement shall be prepared in accordance with GAAP
subject to the guidelines described in Section 3 below. The Seller
Representative or his designees and agents shall be entitled to review the
Income Statement, Parent’s calculations of the Additional Consideration, and any
working papers and similar materials relating to such Income Statement prepared
by Parent or Parent’s Accountants. Parent also shall provide the Seller
Representative with timely access, during normal business hours, to the
personnel, properties, books and records of the Surviving Corporation and all
other information reasonably requested, to the extent related to the
determination of the Income Statement and the applicable Additional
Consideration, if any. The Seller Representative agree to keep any and all such
information received by him confidential and not to disclose such information or
otherwise use it for any purposes other than reviewing the Income Statement, the
related calculation of EBITDA and the Additional Consideration (if any) and to
resolve any disputes with respect to the foregoing.
          (c) The Seller Representative shall review the Income Statement and,
on or before the sixtieth (60th) day after the Seller Representative’s receipt
of the Income Statement, the Seller Representative shall deliver to Parent, in
writing, any objection or dispute thereto which the Seller Representative may
have with respect to the Income Statement, including Parent’s calculation of
EBITDA or the Additional Consideration, which shall be quantified and items so
contested shall be described in sufficient detail in order to permit Parent to
evaluate the basis for such dispute. If the Seller Representative fail to make
an objection to the Income

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Statement or to Parent’s calculation of the Additional Consideration during this
sixty (60) day period, the Seller Representative, on behalf of the Remaining
Sellers, will be deemed to have accepted the calculation of EBITDA and the
amount of Additional Consideration. If the Seller Representative make a timely
objection to the Income Statement or to Parent’s calculation of the Additional
Consideration, and Parent and the Seller Representative are unable to resolve
their disputes within fifteen (15) days after the objection of the Seller
Representative, the dispute shall be resolved by the Independent Accountants.
The determinations of the Independent Accountants shall be final, binding and
conclusive to Parent, the Seller Representative and the Remaining Sellers and
their respective Affiliates, successors, assigns or heirs. The fees, expenses
and disbursements of the Independent Accountants (i) shall be borne by the
Seller Representative (and payable first from any Additional Consideration due
the Remaining Sellers) in the proportion that the aggregate dollar amount of
such disputed items so submitted that are unsuccessfully disputed by the Seller
Representative bears to the aggregate dollar amount of such items so submitted
and (ii) shall be borne by Parent in the proportion that the aggregate dollar
amount of such disputed items so submitted that are successfully disputed by the
Seller Representative bears to the aggregate dollar amount of such items so
submitted.
          (d) The Additional Consideration less the amount of the First
Anniversary Payment (the “Final Payment”) shall, within ten (10) days after the
Additional Consideration has been finally determined, be paid by Parent to the
Remaining Sellers based on the percentage allocation of such Remaining Seller as
set forth next to such Remaining Seller’s name on the signature page hereto.
Notwithstanding anything in this Agreement, the Merger Agreement, the Original
Agreement, the Settlement Agreement or any other agreement to the contrary, in
no event shall the aggregate of the First Anniversary Payment plus the Final
Payment exceed the Maximum Total Payment. In the event that the First
Anniversary Payment exceeds the Additional Consideration, no Final Payment will
be due or owing by Parent under this Agreement and the Remaining Sellers will
not be liable for or otherwise obligated to pay or reimburse any such excess to
Parent.
ARTICLE III. COMPUTATION OF EBITDA
     3.1 Manner of Computation. For purposes of this Agreement, “EBITDA” of the
Surviving Corporation for any period shall mean its cumulative earnings before
interest, taxes, depreciation, amortization and reasonable allocations for such
period. EBITDA shall be determined in accordance with the principals and methods
of accounting set forth on Addendum A attached hereto and incorporated herein
and, to the extent not covered in Addendum A, otherwise in accordance with
generally accepted accounting principles (GAAP) applied by Parent in a manner
substantially consistent with the past practices of the Company and as
determined by the firm of independent certified public accountants engaged by
Parent for purposes of its own audit (the “Parent’s Accountants”).
     3.2 Specific Items. In determining such EBITDA:
          (a) EBITDA shall be computed without regard to “extraordinary items”
of gain or loss as that term is defined in GAAP;

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          (b) EBITDA shall not include any gains, losses or profits realized
from the sale of any assets other than in the ordinary course of business;
          (c) no deduction shall be made for any management fees, general
overhead expenses or other intercompany charges, of whatever kind or nature,
charged by Parent to the Surviving Corporation except to the extent provided for
in Addendum A;
          (d) no deduction shall be made for legal or accounting fees and
expenses arising out of this Agreement, the Merger Agreement, the Original
Agreement or the Settlement Agreement except for fees in support of receivables’
collection or contract enforcement with a customer of the Business;
          (e) the purchase and sales prices of goods and services sold by the
Surviving Corporation to Parent or its Affiliates or purchased by the Surviving
Corporation from Parent or its Affiliates shall be adjusted to reflect the
amounts that the Surviving Corporation would have realized or paid if dealing
with an independent party in an arm’s-length commercial transaction; and
          (f) EBITDA will be determined on a cumulative basis during the Period
(with respect to the Surviving Corporation only) from the financial statements
prepared by Parent. For purposes of determining EBITDA, except as specifically
provided for on Addendum A, no corporate overhead or intercompany charges,
including, without limitation, any additional costs or expenses associated with
the Surviving Corporation being a subsidiary of a publicly traded company (e.g.
management expenses or regulatory compliance) will be allocated to the business
of the Surviving Corporation during the Period.
ARTICLE IV. COVENANTS REGARDING OPERATIONS
     4.1 Covenants of Parent, Surviving Corporation, the Remaining Sellers and
the Seller Representative During the Period. Parent, Surviving Corporation, the
Remaining Sellers and the Seller Representative agree that each party will act
in good faith with respect to the covenants set forth in this Article IV.
     4.2 Operations of the Business. Except to the extent specifically provided
in Section 4.3 below, the Business of the Surviving Corporation will be operated
during the Period in accordance with the Parent’s policies and procedures
applicable to its subsidiaries in general as such policies and procedures may be
modified or amended from time to time by Parent at its sole and absolute
discretion (including, by way of example only, that the Surviving Corporation
will refrain from booking unprofitable business that may enhance revenue at the
risk of impairing the long-term success of the Surviving Corporation; and that
the Board of Directors of the Surviving Corporation, as appointed by Parent,
will have the ultimate control and responsibility for the material operations
and decision making of the Surviving Corporation such as geographic expansion
and entering into new lines of business).
     4.3 Operational Autonomy. During the Period, Parent agrees that, so long as
the Company is operating at an aggregate gross margin for the Company’s business
as a whole of not less than 15% on a trailing 12-month basis and is generating,
on a trailing 12-month basis beginning for the period ended December 31, 2007,
EBITDA in excess of $25,000,000, (i) the

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Surviving Corporation shall remain Operationally Autonomous (as defined below)
and (ii) Anthony Mellina and David Vogelzang shall have the authority to manage
the Surviving Corporation as provided by the terms of their employment
agreements entered into with Parent in connection with the Settlement Agreement
(the “Management Employment Agreements”); provided, however, that payment of
Additional Consideration to a Remaining Seller is not conditioned upon the
continuing employment of such Remaining Seller with Parent, the Company or any
Affiliate thereof. As used in this Section 4.3, “Operationally Autonomous” means
that, from and after the Effective Time, Parent shall (i) cause the Surviving
Corporation to maintain, in all material respects, its existence as a distinct
operating entity apart from the other Affiliates of Parent, including
maintaining for the Surviving Corporation a separate income statement,
(ii) allow the Surviving Corporation to make employment decisions that are
reasonable and in the best interests of the Business, (iii) allow capital
investments that are approved in accordance with the Parent’s capital approval
process, (iv) subject to (v) below, allow the Surviving Corporation to enter
into customer agreements so long as such contracts meet risk tolerances as
established by the Parent and (v) allow the Surviving Corporation to enter into
customer agreements so long as such contracts, on a pro forma basis, generate at
least 10% gross margins, whereby gross margin is defined as gross profit divided
by revenue, as calculated in accordance with GAAP; provided, however, part
(v) of this Section 4.3 shall not apply to a transaction or a series of related
transactions that have a pro forma revenue amount of less than of $1 million or
that otherwise have been pre-approved, in writing, by Parent.
     4.4 Quarterly Meetings. During the Period, Parent shall, at the Seller
Representative’s reasonable request, but not more frequently than quarterly,
meet (telephonically or in person) (the “Quarterly Earn-Out Meetings”) with
Seller Representative to discuss the operation of the Business, including, but
not limited to, financial results or other issues relating to the Additional
Consideration.
     4.5 Acknowledgment of the Company, the Remaining Sellers and the Seller
Representative. Each of the Company, the Remaining Sellers and the Seller
Representative acknowledges and agrees that (i) Parent makes no representations
nor provides any assurances whatsoever as to the feasibility of achieving the
Additional Consideration or any portion thereof (over and above the First
Anniversary Payment) and (ii) neither Parent nor the Surviving Corporation owe
any fiduciary duty to the Remaining Sellers or the Seller Representative.
     4.6 Remedy for Breach of Covenants. In the event that Parent or Surviving
Corporation materially breach the covenants set forth in this Section 4, and
(i) such material breach continues for a period of thirty (30) days after the
Seller Representative has provided written notice to Parent and Surviving
Corporation setting forth, in reasonable detail, the terms of such material
breach, and (ii) thereafter, the Seller Representative receives a final,
non-appealable order of a court of competent jurisdiction wherein Parent or the
Surviving Corporation is found to be in material breach of this Section 4, this
Agreement shall be subject to immediate termination at the option, to be
exercise in writing, of the Seller Representative. Upon any such termination,
Parent shall be obligated to pay to the Remaining Sellers for distribution in
accordance with the terms hereof, in immediately available funds, as Additional
Consideration, an amount equal to $1,000,000. Any such payment under this
Section 4.6 shall be the Remaining Sellers’ sole and exclusive remedy for a
breach by Parent or the Surviving

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Corporation for a breach of this Section 4.6 and, without limiting the
foregoing, shall be in lieu of any further payment of Additional Consideration.
ARTICLE V. MISCELLANEOUS
     5.1 Severability. If any provision of this Agreement is held to be illegal,
invalid or unenforceable under any present or future Law, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated
so long as the economic or legal substance of the transactions contemplated
hereby is not affected in any manner materially adverse to any party. Upon the
determination that any provision of this Agreement is illegal, invalid or
unenforceable, the parties hereto shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as
possible to the fullest extent permitted by applicable Law to the end that the
transactions contemplated hereby are fulfilled to the maximum extent possible.
     5.2 Entire Agreement; Assignment. This Amended and Restated Earnout
Agreement, including the Addendum hereto, and, to the extent referenced herein,
the Merger Agreement, the Management Employment Agreements and the Settlement
Agreement, constitute the entire agreement among the parties with respect to the
subject matter hereof and supersede all prior agreements and understandings,
both written and oral, among the parties with respect to the subject matter
hereof, including, specifically, the Original Agreement. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns; provided, that no party may assign, delegate
or otherwise transfer any of its rights or obligations under this Agreement
without the consent of the other parties hereto, except that Parent or the
Surviving Corporation may, without such prior written consent, at any time,
transfer or assign, in whole or from time to time in part, its rights or
obligations under this Agreement (i) to one or more of its Affiliates or (ii) to
any Person acquiring all or a significant portion of Parent’s or the Surviving
Corporation’s assets or equity interests.
     5.3 Counterparts. This Agreement may be executed in counterparts, all of
which shall be considered one and the same agreement and shall become effective
when one or more counterparts have been signed by each of the parties and
delivered to the other parties, it being understood that all parties need not
sign the same counterpart.
     5.4 Notices. All notices, requests and other communications hereunder shall
be in writing and shall be deemed given if delivered personally or sent by a
reputable overnight courier service (providing proof of delivery) or sent via
facsimile (with confirmation of receipt) to the parties at the following address
(or at such other address or facsimile number as such party may hereafter
specify by like notice):
          (a) if to Parent or Merger Sub, to:
Agilysys, Inc.
2255 Glades Road, Suite 301E
Boca Raton, Florida 33431
Attn: Chief Executive Officer
and Chief Financial Officer

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Facsimile No.: 561-999-8765
               with a copy to:
Calfee, Halter & Griswold LLP
800 Superior Avenue #1400
Cleveland, Ohio 44114-2688
Attention: Robert A. Ross
Facsimile No.: 216-241-0816
          (b) if to the Seller Representative, to:
Anthony Mellina
3 Colts Gait Lane
Colts Neck, NJ 07722
Facsimile: (     )      -     
               with copies (which shall not constitute notice) to:
Lowenstein Sandler PC
65 Livingston Avenue
Roseland, New Jersey
Facsimile: (973) 597-2569
Attention: Raymond P. Thek, Esq.
               All such notices, requests and other communications shall be
deemed received on the date of receipt by the recipient thereof if received
prior to 11:59 p.m. in the place of receipt and such day is a Business Day in
the place of receipt. Otherwise, any such notice, request or communication shall
be deemed not to have been received until the next succeeding Business Day in
the place of receipt
     5.5 Waiver of Compliance. The party for whose benefit a warranty,
representation, covenant or condition is intended may, in writing, waive any
inaccuracies in the warranties, representations, covenants or conditions
contained in this Agreement or waive compliance with any of the foregoing and so
waive performance of any of the obligations of the other party hereto and any
defaults hereunder, provided, however, that such waiver shall not affect or
impair the waiving party’s rights in respect to any other warranty,
representation, covenant, condition or default hereunder.
     5.6 Headings. The headings contained in this Agreement are for the sole
purpose of convenience of reference, and shall not in any way limit or affect
the meaning or interpretation of any of the terms or provisions of this
Agreement.
     5.7 Amendment or Supplement. This Agreement may be amended, modified, or
supplemented solely by written agreement of all of the parties hereto making
specific reference to this Agreement.

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     5.8 Governing Law. This Agreement and all matters arising directly or
indirectly herefrom shall be governed by, and construed in accordance with, the
internal laws of the State of Delaware, without giving effect to any choice of
law or conflict of law provision or rule (whether of the State of Delaware or
any other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of Delaware. All Legal Proceedings arising out
of or relating to this Agreement shall be heard and determined in any state or
federal court sitting in the State of Ohio, and the parties hereto hereby
irrevocably submit to the exclusive jurisdiction of such courts in any such
Legal Proceeding and irrevocably waive the defense of an inconvenient forum to
the maintenance of any such Legal Proceeding. The consents to jurisdiction set
forth in this paragraph shall not constitute general consents to service of
process in the state described in the preceding sentence and shall have no
effect for any purpose except as provided in this paragraph and shall not be
deemed to confer rights on any Person other than the parties hereto. The parties
hereto agree that a final judgment in any such Legal Proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by applicable law.
     5.9 Appointment of Seller Representative.
          (a) The Seller Representative is hereby appointed as agent and
attorney-in-fact for and on behalf of the Remaining Sellers (the “Seller
Representative”), to give and receive notices and communications, to agree to,
negotiate and enter into settlements and compromises of claims, to demand,
prosecute and defend claims arising out of this Agreement and to comply with
orders of courts and determinations and awards with respect to claims, and to
take all actions necessary or appropriate in the judgment of the Seller
Representative for the accomplishment of the foregoing. Such agency may be
changed by the Remaining Sellers from time to time upon not less than ten (10)
calendar days’ prior written notice to Parent. Any vacancy in the position of
Seller Representative shall be filled by a majority-in-interest of the Remaining
Sellers. The Seller Representative may resign upon ten (10) calendar days’ prior
written notice to Parent and the Company provided that no such resignation shall
become effective until the appointment of a successor Seller Representative. No
bond shall be required of the Seller Representative, and the Seller
Representative shall not receive compensation for his services. Notices or
communications to or from the Seller Representative shall constitute notice to
or from each Remaining Seller.
          (b) The Seller Representative shall not have any liability to the
Remaining Sellers for any action taken or suffered by him or omitted by him
hereunder as Seller Representative, except as caused by the Seller
Representative’s gross negligence or willful misconduct. The Seller
Representative may, in all questions arising hereunder, rely on the advice of
counsel and the Seller Representative shall not be liable to the Remaining
Sellers for anything done, omitted or suffered by the Seller Representative
based on such advice. The Seller Representative undertakes to perform such
duties and only such duties as are specifically set forth in this Agreement and
no implied covenants or obligations shall be read into this Agreement against
the Seller Representative.
          (c) A decision, act, consent or instruction of the Seller
Representative in a matter entrusted to the Seller Representative by this
Agreement shall be deemed to have been taken or given on behalf of all Remaining
Sellers and shall be final, binding and conclusive upon

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all Remaining Sellers, and Parent and the Company may rely upon any such
decision, act, consent or instruction of the Seller Representative as being the
decision, act, consent or instruction of, and binding on, each of the Remaining
Sellers. Parent, the Company and their respective Affiliates are hereby relieved
from any liability to any person for any acts done by them in accordance with
such decision, act, consent or instruction of the Seller Representative.
[signature page to follow]

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          IN WITNESS WHEREOF, the parties hereto have caused this Amended and
Restated Earnout Agreement to be executed and delivered all as of the date first
written above.

         
 
  PARENT    
 
       
 
  Agilysys, Inc., an Ohio corporation    
 
       
 
       /s/ Martin F. Ellis    
 
       
 
  By: Martin F. Ellis    
 
  Its: EVP, Treasurer & CFO    
 
       
 
  COMPANY/MERGER SUB    
 
       
 
  Agilysys NJ, Inc., a New Jersey corporation    
 
       
 
       /s/ Martin F. Ellis    
 
       
 
  By: Martin F. Ellis    
 
  Its: Vice President    
 
       
 
  REMAINING SELLERS    
 
       
 
  Anthony Mellina (44.2%)    
 
       
 
       /s/ Anthony Mellina    
 
       
 
       Anthony Mellina    
 
       
 
  David Vogelzang (44.2%)    
 
       
 
       /s/ David Vogelzang    
 
       
 
       David Vogelzang    
 
       
 
  Frank G. Batula (11.6%)    
 
       
 
       /s/ Frank Batula    
 
       
 
       Frank Batula    
 
       
 
  SELLER REPRESENTATIVE    
 
       
 
       /s/ Anthony Mellina    
 
       
 
       Anthony Mellina    

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ADDENDUM A
EBITDA Principals
EBITDA shall be defined as the Surviving Corporation’s operating income, as
defined by GAAP, plus any depreciation and amortization charged to the Surviving
Corporation’s income statement. Revenues and expenses shall be calculated in
accordance with GAAP consistently applied in accordance with the Parent’s
accounting policies. Solely for purposes of determining EBITDA during the
Period:
1. The Surviving Corporation shall earn a 3% finders fee for all revenue
recognized by the Parent during the Period on sales of non-Sun related products
and services to existing customer accounts of the Surviving Corporation at the
Effective Time, which is not directly recorded on the Surviving Corporation’s
income statement. The finders fee shall be the product of the revenue recognized
by the Parent and .03.
2. The Surviving Corporation may be charged allocations for marketing and inside
sales functions to the extent such functions are recorded on the Parent’s or an
Affiliate’s income statement. Calculation of these allocations will be on a
basis consistent with such charges to Parent’s other operating business units
and will be commensurate with the actual costs related to providing such
support.
3. Expenses related to corporate functions, including financial accounting,
accounts payable, accounts receivable collection, payroll, customer credit
evaluation, tax, treasury, information technology, legal, and human resource
provided to the Surviving Corporation will be determined by taking two times the
expense incurred by the Company for such functions in the twelve months prior to
the Effective Time.
4. Provisions for bad debt and inventory obsolescence shall be calculated on a
basis that is consistent with the Parent’s estimate for these items, which
estimates will be applied consistent with GAAP and the Parent’s accounting
policies.
5. The Surviving Corporation’s expenses for payroll taxes and employee benefits
shall be 14.00% of salaries, wages, incentives and overtime for the period
ending June 30, 2008, and 15.75% of salaries, wages, incentives and overtime for
all periods thereafter.
6. Severance expense related to terminating any Surviving Corporation employee
shall be charged to the Surviving Corporation’s income statement and included in
the calculation of EBITDA only if the termination decision is agreed to by the
management of the Surviving Corporation. Such severance expense will be
calculated in accordance with the Parent’s severance policy.
7. Parent and its Subsidiaries shall account for all revenue generated by the
Parent and its Subsidiaries from sales of Sun products by Parent and its
Subsidiaries, except for those in the Southern California region covered by
Agilysys CA, Inc. (fka Stack Computer), as sales of the Company, subject to
appropriate and good faith adjustments in the event of subsequent acquisitions
by Agilysys CA, Inc.

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