THE CORPORATE LIBRARY

Related Party Transactions and Outside Related Director Information

North Pittsburgh Systems, Inc. (NPSI)

4/21/2006 Proxy Information

The Company and its subsidiaries paid approximately $2,955,000 to JUDCO Management, Inc., a subsidiary of Armstrong Holdings, Inc., for data processing functions during 2005. Jay L. Sedwick, Chairman of the Board and a Director of Armstrong Holdings, Inc., was a director of the Company for many years until his 2004-2005 term as a Director of the Company ended on May 20, 2005. The Company and its subsidiaries also had approximately $269,000 outstanding to JUDCO Management, Inc. as of December 31, 2005. In addition, in the ordinary course of business, the Company and its subsidiaries both provide and receive telecommunication transport services from Boulevard Communications, L.L.P. (Boulevard), a competitive access provider jointly owned by the Company and a company in the Armstrong Holdings, Inc. group of companies (Armstrong Group). Total revenues recognized from providing services to Boulevard were approximately $30,000, and total expenses incurred from receiving services from Boulevard were approximately $168,000, for 2005. The Company and its subsidiaries also provide in the ordinary course of business telecommunication and transport services to other member companies of the Armstrong Group, with total revenues recognized for such telecommunication and transport services of approximately $96,000 for 2005. The amounts outstanding between the Company and its subsidiaries, on the one hand, and Boulevard and the companies in the Armstrong Group, on the other hand, as of December 31, 2005 were negligible.

Charles E. Thomas, Jr., Chairman of the Board of the Company, is a partner in the law firm of Thomas, Thomas, Armstrong & Niesen, Harrisburg, PA. Thomas, Thomas, Armstrong & Niesen has been retained as general counsel to the Company since before 2005 and may be retained by the Company in the future. The Company and its subsidiaries paid Thomas, Thomas, Armstrong & Niesen a total of approximately $280,000 in fees during 2005 and at December 31, 2005 owed Thomas, Thomas, Armstrong & Niesen approximately $33,000 for services rendered before, but not billed until after, December 31, 2005.

Albert W. Weigand is an executive officer of the Company. A brother of Mr. Weigand has been employed by a subsidiary of the Company since before 2005. The Company’s subsidiary has paid to or for the benefit of Mr. Weigand’s brother compensation (salary, bonus and a contribution to a defined contribution retirement plan) aggregating $63,308 for his services rendered during 2005. At December 31, 2005, the subsidiary did not owe Mr. Weigand’s brother any other compensation for services rendered during 2005.

Stephen G. Kraskin is a Director of the Company and a member of the Compensation Committee of the Board of Directors of the Company. A description of transactions between the Company and the legal and consulting firm of which Mr. Kraskin is a member is provided under the heading Compensation Committee Interlocks and Insider Participation above in this Proxy Statement.