J.L. Halsey Corporation Acquires EmailLabs; A Leading Provider of Email Marketing Hosted Software Solutions; Acquisitions of Lyris and EmailLabs Creates Email Marketing Powerhouse

Business Wire, Oct 12, 2005

WILMINGTON, Del. -- J.L. Halsey Corporation (OTCBB:JLHY) announced today that it has acquired Uptilt, Inc., dba EmailLabs, based in Menlo Park, California, an award-winning leader in email marketing hosted software and services. This acquisition follows the purchase of Lyris Technologies in May 2005, making Halsey the largest publicly-held company focused solely on email marketing.

The Merger Agreement provides that Halsey will pay to the owners of Uptilt approximately $19.5 million in cash at closing (of which approximately $2.8 million will be funded through Uptilt's available cash) and will pay two annual installments totaling up to approximately $3.5 million if EmailLabs achieves specified revenue targets in the first and second year following the closing. In addition, Halsey set aside a $500,000 holdback as security that EmailLabs has met specified working capital and similar targets as of the closing. The acquisition was funded through a five year $18.5 million revolving credit line with Comerica Bank. Borrowings on the line bear interest at the prime rate plus 75 basis points or LIBOR plus 375 basis points and the credit line is subject to customary conditions, including certain financial covenants.

EmailLabs has been named a Top 25 ASP by ASPNews in 2003, 2004 and 2005, a Top 10 Email Service Provider by JupiterResearch in 2003, 2004 and 2005 and a ClickZ Marketing Excellence Award Finalist in 2003, 2004 and 2005. Uptilt has also been recognized for outstanding growth by the San Jose Business Journal, San Francisco Business Times and Deloitte.

Luis Rivera, Chief Operating Officer of Halsey stated, "With this acquisition, we become the largest independent, publicly-traded email marketing firm. EmailLabs is one of the premier brands in the high-end market for hosted email marketing software. Their success with hosted services complements Lyris' success in selling installed email marketing software." He added, "The combination of EmailLabs and Lyris, with its ListManager, Sparkllist and EmailAdvisor products, enables Halsey to offer either installed or hosted software solutions to marketers who require the most advanced email marketing features in the industry."

David Sousa, co-founder, Chairman and CEO of Uptilt, commented, "I am pleased that EmailLabs is being acquired by a company that will fund its continued growth as a leader in email marketing and whose management shares my vision of building the dominant provider of email marketing technology in the industry." After the closing, Sousa and co-founder and CTO, Adrian Liang, will resign but remain as advisors.

Approximately 97% of EmailLabs revenues comes from hosted email marketing services. For the period from January 1, 2005, through September 30, 2005, EmailLabs had approximately $6.4 million in revenue. For all of calendar 2004, revenue for EmailLabs was approximately $5.7 million. Revenue in 2004 was approximately 80% higher than revenue in 2003. Audited financials for EmailLabs will be filed with the SEC within 75 days.

"EmailLabs became an industry leader in providing advanced email marketing automation solutions to middle market and Global 2000 companies by being responsive, nimble and focused on enhancing our application to meet the needs of our most demanding clients. The acquisition by J.L. Halsey enables EmailLabs to invest even greater resources in R&D, feature enhancement and human capital, to further the company's leadership in high-performance hosted email marketing solutions," added Jim Herbold, Vice-President of Sales and General Manager of EmailLabs. Along with Herbold, other senior managers of EmailLabs, including Loren McDonald, Vice-President of Marketing, and Akshay Vyas, Director of Engineering, will remain with EmailLabs and continue to provide their clients with exceptional service.

Halsey continues to look for acquisition opportunities in email marketing technology and may also acquire companies in other markets. Please contact David Burt, Chief Executive Officer of JL Halsey with acquisition opportunities at 302-691-6189.

Cautionary Statement

Except for historical information contained herein, the statements in the press release are forward-looking statements that are made pursuant to the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements and the business prospects of the Company are subject to a number of risks and uncertainties that may cause the Company's actual results in future periods to differ materially from the forward-looking statements. These risks and uncertainties include, among other things, the following: Halsey has incurred significant debt to purchase Uptilt, Inc.; no information about Uptilt, Inc. has been filed with the Securities and Exchange Commission; there are risks related to Uptilt's businesses. There can be no assurance that Uptilt, Inc. will achieve the financial and business performance that Halsey anticipated when it agreed to purchase Uptilt, Inc. Other risks related to Halsey are described in the J.L. Halsey Corporation 10-K report for the year ending June 30, 2005, and other filings with the Securities and Exchange Commission.