Exhibit 2.1

ARRANGEMENT AGREEMENT

AMONG

SCHMITT INDUSTRIES, INC.,

SCHMITT INDUSTRIES (CANADA) LIMITED ,

and

XTERO DATACOM INC.

December 14, 2007

TABLE OF CONTENTS

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ARRANGEMENT AGREEMENT

THIS ARRANGEMENT AGREEMENT (“ Agreement ”) is made and entered into as of December 14, 2007 by and among SCHMITT INDUSTRIES, INC. , an Oregon corporation (“ Parent ”), SCHMITT INDUSTRIES (CANADA) LIMITED , a British Columbia corporation and a wholly owned subsidiary of Parent (“ ExchangeCo ”), and XTERO DATACOM INC. , a British Columbia corporation (the “ Company ”).   Certain capitalized terms used in this Agreement are defined in Schedule A.

R E C I T A L S

A.                                                                                    Parent and the Company entered into an interim acquisition agreement (the “ Interim Agreement ”) dated October 4, 2007 whereby Parent proposed to acquire all of the issued and outstanding common shares of the Company;

B.                                                                                      The parties have agreed to effect the proposed acquisition by way of an arrangement pursuant to the terms of the BCA;

C.                                                                                      The respective boards of directors of the Company, Parent and ExchangeCo have determined that the acquisition to be effected by means of the Plan of Arrangement is advisable and in the best interests of the respective companies and have approved the transactions contemplated by this Agreement;

D.                                                                                     The board of directors of the Company has agreed to submit the Plan of Arrangement and the other transactions contemplated hereby to its shareholders and the Court for approval; and

E.                                                                                       Pursuant to the Interim Agreement, the parties have agreed to enter into this Agreement setting out the terms and conditions on which the Arrangement will be carried out.

AGREEMENT

The parties to this Agreement, intending to be legally bound, agree as follows:

ARTICLE 1DESCRIPTION OF TRANSACTION

1.1                          Implementation Steps by the Company

The Company covenants in favour of Parent and ExchangeCo that the Company will:

(a)                                   as soon as practicable after the execution of this Agreement, apply in a manner acceptable to Parent, acting reasonably, under Section 291 of the BCA for the Interim Order, and thereafter proceed with and diligently pursue the Interim Order;

(b)                                  as soon as practicable after the execution of this Agreement, convene and hold the Company Shareholders’ Meeting in accordance with Section 5.1 for the purpose of considering the Arrangement Resolution (and for any other proper purpose as may be acceptable to Parent, acting reasonably, and as may be set out in the notice for such meeting); provided, however, that the Company and Parent, acting reasonably and jointly, will be entitled to adjourn or postpone the Company Shareholders’ Meeting for a period of time agreed to by both the Company and Parent, if on the scheduled date of such Company Shareholders’ Meeting all of the Consents required pursuant to Section 6.4 have not been obtained;

(c)                                   subject to obtaining such approvals as are required by the Interim Order, as soon as practicable after the Company Shareholders’ Meeting, proceed with and diligently pursue the application to the Court for the Final Order;

(d)                                  subject to obtaining the Final Order and the satisfaction or waiver of the other conditions herein contained in favour of each party, as soon as reasonably practicable, take all steps and actions necessary to give effect to the Arrangement;

(e)                                   on or prior to the Effective Date and subject to obtaining the Final Order and the satisfaction or waiver of the other conditions herein contained in its favour, execute and deliver the Support and Exchange Agreement; and

(f)                                     provide Parent with copies of and a reasonable opportunity to comment on all applications, circulars and other documents prepared by or on behalf of the Company in connection with the Arrangement and make any changes to such applications, circulars and documents as are acceptable to the Company and Parent, each acting reasonably.

1.2                          Implementation Steps by Parent and ExchangeCo

Parent and ExchangeCo covenant in favour of the Company that, on or prior to the Effective Date and subject to obtaining the Final Order and the satisfaction or waiver of the other conditions herein contained in favour of Parent and ExchangeCo:

(a)                                   Parent will amend the constating documents of ExchangeCo to create the Exchangeable Shares and the Redeemable Shares prior to the Effective Time in a manner reasonably acceptable to the Company; and

(b)                                  Parent and ExchangeCo will execute and deliver the Support and Exchange Agreement.

1.3                          Interim Order

In the notice of motion for the application contemplated by Section 1.1(a), the Company will request that the Interim Order provide:

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(a)                                   for the class of Persons to whom notice is to be provided in respect of the Arrangement and the Company Shareholders’ Meeting and for the manner in which such notice is to be provided;

(b)                                  that the requisite approval for the Arrangement Resolution will be 66 2/3% of the votes cast on the Arrangement Resolution by holders of Common Shares present in person or by proxy at the Company Shareholders’ Meeting and entitled to vote thereat (the “ Required Company Shareholder Vote ”);

(c)                                   that, in all other respects, the terms, restrictions and conditions of the articles of the Company, including quorum requirements and all other matters, will apply in respect of the Company Shareholders’ Meeting; provided, however, the Company will request that the Interim Order provide that the Company and Parent, acting reasonably and jointly, will be entitled to adjourn or postpone the Company Shareholders’ Meeting for a period of time agreed to by both the Company and Parent, if on the scheduled date of such Company Shareholders’ Meeting all of the Consents required pursuant to Section 6.4 have not been obtained; and

(d)                                  for the grant of Dissent Rights to the holders of Common Shares.

1.4                          Arrangement

Parent, ExchangeCo and the Company agree that the Arrangement will be implemented in accordance with and subject to the terms and conditions contained in this Agreement and the Plan of Arrangement.

1.5                          Adjustments in the Exchangeable Share Exchange Ratio

If, between the date of this Agreement and the Effective Time, the outstanding Common Shares or Parent Common Stock are changed into a different number or class of shares by reason of any stock split, division or subdivision of shares, stock dividend, reverse stock split, consolidation of shares, reclassification, recapitalization or other similar transaction, then the Exchange Ratio will be appropriately adjusted.

1.6                          Management Proxy Circular

As promptly as practicable after the execution of this Agreement, the Company, in consultation with Parent, will prepare the Management Proxy Circular (which will be in form and content acceptable to Parent, acting reasonably) together with any other documents required by the Canadian Securities Laws or other applicable Legal Requirements in connection with the Arrangement, and the Company will cause the Management Proxy Circular and other documentation required in connection with the Company Shareholders’ Meeting to be sent to each holder of Common Shares and Company Options and filed as required by the Interim Order and applicable Legal Requirements.

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1.7        Preparation of Filings

(a)                                   Parent and the Company will use their reasonable efforts to co-operate with one another in:

2.1A                       the preparation of any application for the Interim Order and the Final Order, any required registration statements and any other documents, applications or filings (including the NASDAQ Filings) reasonably deemed by Parent or the Company to be necessary to discharge their respective obligations under United States federal or state securities laws and under Canadian Securities Laws and to comply with applicable NASDAQ requirements in connection with the Arrangement and the other transactions contemplated hereby;

2.1A                       the taking of all such action as may be required under any applicable United States federal or state securities laws (including “blue sky laws”) and any applicable Canadian Securities Laws in connection with the issuance of the Parent Common Stock in connection with the Arrangement; provided, however, that, notwithstanding anything to the contrary contained in this Agreement, with respect to the United States “blue sky” and Canadian Securities Laws, neither Parent nor the Company (or any Subsidiary or Affiliate of Parent or the Company) will be required to register or qualify as a foreign corporation or reporting issuer where any such Entity is not now or on the Effective Date so registered or qualified; and

2.1A                       the taking of all such action as may be required under the BCA in connection with the transactions contemplated by this Agreement and the Plan of Arrangement.

(b)                                  Parent or ExchangeCo will:

2.1A                       use all reasonable commercial efforts to obtain all orders required from all applicable Canadian Securities Commissions, on terms and conditions acceptable to the Company, acting reasonably, to permit the first resale of the shares of Parent Common Stock issuable upon exchange of the Exchangeable Shares from time to time through NASDAQ or the facilities of another stock exchange or market in the United States (provided that such first resale is made in accordance with all applicable laws and rules of NASDAQ or the stock exchange or market upon which the trade is made) without qualification with or approval of or the filing of any document or the taking of any proceeding with, or the obtaining of any further order, ruling or consent from, any Canadian Governmental Body or Canadian Securities Commission, or the fulfilment of any other legal requirement in any Canadian federal, provincial or territorial jurisdiction (other than, with respect to such first resales, any restrictions on transfer

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by reason of, among other things, a holder being a “control person” for the purposes of any Canadian Securities Laws);

2.1A                       in the event that Parent is unable to obtain the orders described in Section 6.5(  )2.1A, Parent will (i) as expeditiously as reasonably practicable, prepare and file under the applicable securities laws of a jurisdiction listed in Appendix B to Multilateral Instrument 45-102 — Resale of Securities, a preliminary prospectus and related documents and obtain a receipt for such preliminary prospectus; (ii) use its reasonable best efforts to resolve as expeditiously as reasonably practicable any comments with respect to the preliminary prospectus made by the applicable Canadian Securities Commissions and receive confirmation from such Canadian Securities Commissions, prior to the Effective Date, that Parent is clear to file under the applicable Canadian Securities Laws a (final) prospectus; (iii) prepare a (final) prospectus and related documents; and (iv) as soon as possible after the Effective Date file under such applicable Canadian Securities Laws such (final) prospectus and related documents and use its reasonable best efforts to obtain, as expeditiously as reasonably practicable thereafter, a receipt for the (final) prospectus from such Canadian Securities Commissions; and

(c)                                   Each of Parent and the Company will notify the other promptly of the receipt of any comments from Canadian Securities Commissions, the SEC or its staff and of any request by Canadian Securities Commissions, the SEC or its staff for amendments or supplements to the Management Proxy Circular or for additional information, and will supply the other with copies of all correspondence with Canadian Securities Commissions, the SEC or its staff with respect to the Management Proxy Circular or any such registration statement.  Parent and the Company will each promptly notify the other if at any time before or after the Effective Time it becomes aware that the Management Proxy Circular or an application for an order contains any untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements contained therein not misleading in light of the circumstances in which they are made, or that otherwise requires an amendment or supplement to the Management Proxy Circular or such application or registration statement.  In any such event, Parent and the Company will co-operate in the preparation of a supplement or amendment to the Management Proxy Circular or such other document, as required and as the case may be, and, if required, will cause the same to be distributed to shareholders of the Company and/or filed with the relevant securities regulatory authorities and/or stock exchanges.

(d)                                  The Company will ensure that the Management Proxy Circular complies with all applicable Legal Requirements. Without limiting the generality of the foregoing, the Company will ensure that the Management Proxy Circular provides the Company Shareholders with information in sufficient detail to permit them to form a reasoned judgement concerning the matters to be placed before them at the

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Company Shareholders’ Meeting and Parent will provide all information regarding Parent reasonably necessary for the Company to do so.

ARTICLE 2REPRESENTATIONS AND WARRANTIES OF THE COMPANY

The Company represents and warrants to Parent and ExchangeCo that except as set forth in the Company Disclosure Schedule:

2.1        Organization and Standing; Subsidiaries

(a)                                   The Company is in good standing under the laws of the jurisdiction of its incorporation and has all necessary power and authority: (i) to conduct its business in the manner in which its business is currently being conducted; (ii) to own and use its assets in the manner in which its assets are currently owned and used; and (iii) to perform its obligations under all Contracts by which it is bound.

(b)                                  The Company is qualified to do business, and is in good standing, under the laws of all jurisdictions where the nature of its business requires such qualification, except where the failure to be so qualified would individually or in the aggregate not have a Material Adverse Effect on the Company.

(c)                                   The Company has no Subsidiaries and does not own any shares in the capital of, or any equity interest of any nature in, any other Entity.  The Company has neither agreed nor is obligated to make, or is bound by any Contract under which it may become obligated to make, any future investment in or capital contribution to any other Entity.  The Company has not, at any time, been a general partner of, or has otherwise been liable for any of the debts or other obligations of, any general partnership, limited partnership or other Entity.

(d)                                  The Company has delivered or made available to Parent accurate and complete copies of its constating documents, including all amendments thereto.

2.2        Capitalization

(a)                                   The authorized capital of the Company consists of an unlimited number of Common Shares, of which 15,532,504 shares have been issued and are outstanding as of the date of this Agreement.  All of the outstanding Common Shares have been duly authorized and validly issued, and are fully paid and non-assessable.  Except as provided in the constating documents of the Company, none of the outstanding Common Shares is entitled or subject to any pre-emptive right, right of participation or any similar right or any right of first refusal in favour of the Company and the Company is not a party to any Contract relating to the voting or registration of, or restricting any Person from purchasing, selling, pledging or otherwise disposing of (or granting any option or similar right with respect to), any Common Shares.  The Company is not under any obligation, or bound by any Contract pursuant to which it may become obligated, to repurchase, redeem or otherwise acquire any outstanding Common Shares.

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(b)                                  Except as contemplated herein or in the Plan of Arrangement, there is no (i) outstanding subscription, option, call, warrant or right (whether or not currently exercisable) to acquire any Common Shares or other shares of the capital stock or other securities of the Company; or (ii) outstanding security, instrument or obligation that has the right to vote (other than the Common Shares) or that is or may become convertible into or exchangeable for any Common Shares or other shares of the capital stock or other securities of the Company.

2.3        Financial Statements; Books and Records

(a)                                   The financial statements (including any related notes) of the Company previously provided to Parent fairly present the financial position of the Company as of the respective dates thereof and the results of operations and cash flows of the Company for the periods covered thereby.

(b)                                  The books, records and accounts of the Company, in all material respects, (i) have been maintained in accordance with good business practices consistent with prior years, (ii) are stated in reasonable detail and accurately and fairly reflect the transactions and dispositions of the assets of the Company, and (iii) accurately and fairly reflect the basis for the financial statements referred to in Section 2.3(a).

2.4        Absence of Changes

Since March 31, 2007, except as set forth in the Interim Agreement or the License Agreement between the Company and Parent dated October 4, 2007 (the “ License Agreement ”), or as contemplated herein:

(a)                                   no event, violation, circumstance or other matter has occurred or arisen that, in combination with any other events or circumstances, has had or would reasonably be expected to have a Material Adverse Effect on the Company;

(b)                                  there has not been any material loss, damage or destruction to, or any material interruption in the use of, any of the assets of the Company (whether or not covered by insurance);

(c)                                   the Company has not: (i) declared, accrued, set aside or paid any dividend or made any other distribution in respect of any Common Shares, or (ii) repurchased, redeemed or otherwise reacquired any Common Shares or other securities;

(d)                                  the Company has not sold, issued or granted, or authorized the issuance of, (i) any shares, capital stock or other security (except for Common Shares issued upon the cancellation of outstanding Company Options or as contemplated under the Arrangement), (ii) any option, warrant or right to acquire any shares, capital stock or any other security, or (iii) any instrument convertible into or exchangeable for any shares, capital stock or other security;

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(e)                                   except in connection with the cancellation of outstanding Company Options, the Company has not amended or waived any of its rights under, or permitted the acceleration of vesting under, (i) any provision of any of the Company’s stock option plans, or (ii) any provision of any Contract evidencing any outstanding Company Option;

(f)                                     except for amendments previously disclosed to Parent, there has been no amendment to the certificate of incorporation, notice of articles, articles or other charter or organizational documents of the Company, and the Company has not effected or been a party to any merger, amalgamation, arrangement, consolidation, share exchange, business combination, recapitalization, reclassification of shares, stock split, reverse stock split or similar transaction;

(g)                                  the Company has not formed any Subsidiary or acquired any equity interest or other interest in any other Entity;

(h)                                  except for development expenses incurred in the connection with the Xact product, the Company has not made any capital expenditures which individually or in the aggregate exceeds $25,000;

(i)                                      the Company has not (i) entered into or permitted any of the assets owned or used by it to become bound by any Company Material Contract (as defined in Section 2.9) except in the ordinary course of business and consistent with past practices, or (ii) amended or terminated, or waived any material right or remedy under, any Material Contract;

(j)                                      the Company has not (i) acquired, leased or licensed any material right or other material asset from any other Person except in the ordinary course of business and consistent with past practices, (ii) sold or otherwise disposed of, or leased or licensed, any material right or other material asset to any other Person, or (iii) waived or relinquished any material right;

(k)                                   the Company has not written off as uncollectible, or established any extraordinary reserve with respect to, any account receivable or other indebtedness having a value in excess of $5,000 in any individual case;

(l)                                      the Company has not made any pledge of any of its assets or otherwise permitted any of its assets to become subject to any Encumbrance, except for pledges of immaterial assets made in the ordinary course of business and consistent with past practices;

(m)                                the Company has not (i) lent money to any Person, or (ii) guaranteed any indebtedness for borrowed money;

(n)                                  the Company has not (i) adopted, established or entered into any Employee Plan (as defined in Section 2.15), (ii) caused or permitted any Employee Plan to be amended in any material respect, or (iii) paid any bonus or made any profit-sharing or similar payment to, or materially increased the amount of the wages,

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salary, commissions, fringe benefits or other compensation or remuneration payable to, any of its directors, officers or employees, other than in the normal course of business and consistent with past practices;

(o)                                  the Company has not changed any of its methods of accounting or accounting principles or practices in any respect, except as otherwise required by Canadian generally accepted accounting principles;

(p)                                  the Company has not made any Tax election;

(q)                                  the Company has not commenced or settled any Legal Proceeding;

(r)                                     the Company has not entered into any material transaction or taken any other material action that, either individually or in the aggregate, has had, or could reasonably be expected to have, a Material Adverse Effect on the Company;

(s)                                   the Company has not entered into any material transaction or taken any other material action outside the ordinary course of business or inconsistent with past practices; and

(t)                                     the Company has not agreed or committed to take any of the actions referred to in clauses “(c)” through “(s)” above.

2.5        Title to Assets

The Company owns, and has good and valid title to, all assets purported to be owned by them, including: (i) all assets reflected on the Company Balance Sheet (except for inventory sold or otherwise disposed of in the ordinary course of business since the date of the Company Balance Sheet); and (ii) all other assets reflected in the books and records of the Company as being owned by the Company.  All of said assets are owned by the Company free and clear of any Encumbrances, except for (1) any lien for current taxes not yet due and payable, (2) minor liens that have arisen in the ordinary course of business and that do not (in any case or in the aggregate) materially detract from the value of the assets subject thereto or materially impair the operations of the Company and (3) the rights set forth in the License Agreement.

2.6        Receivables; Employee Loans; Advances

(a)                                   All existing accounts receivable of the Company (including those accounts receivable reflected on the Company Balance Sheet that have not yet been collected and those accounts receivable that have arisen since the date thereof and have not yet been collected) (a) represent valid obligations of customers of the Company arising from bona fide transactions entered into in the ordinary course of business and (b) are current and, to the Company’s knowledge, will be collected in full, without any counterclaim or set off.

(b)                                  There are no outstanding loans and advances made by the Company to any employee, director, consultant or independent contractor, other than routine

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travel, meal and related advances made to employees in the ordinary course of business.

2.7        Real Property; Equipment; Leasehold

All material items of equipment and other tangible assets owned by or leased to the Company are adequate for the uses to which they are being put, are in good and safe condition and repair (ordinary wear and tear excepted) and are adequate for the conduct of the business of the Company in the manner in which such business is currently being conducted.  The Company does not own any real property or any interest in real property, except for the leaseholds created under its lease for premises located at Unit 110, 998 Harbourside Drive, North Vancouver, British Columbia V7P 3T2.

2.8        Proprietary Assets

(a)                                   The Company has previously provided to Parent information regarding each Proprietary Asset owned by the Company that is material to the business of the Company.  Except as set forth in the License Agreement, the Company has good and valid title to all of the Proprietary Assets previously identified to Parent, free and clear of all Encumbrances, except for any lien for current taxes not yet due and payable, and minor liens that have arisen in the ordinary course of business and that do not (individually or in the aggregate) materially detract from the value of the Proprietary Asset subject thereto or materially impair the operations of the Company.  Except as set forth in the License Agreement, the Company has a valid right to use, license and otherwise exploit all Proprietary Assets subject to the terms thereof.  The Company has not developed jointly with any other Person any Company Proprietary Asset that is material to the business of the Company and with respect to which such other Person has any rights.  There is no Company Contract (with the exception of the License Agreement, end user license agreements, support agreements, consulting agreements and other customer contracts in the forms previously delivered by the Company to Parent) pursuant to which any Person has any right (whether or not currently exercisable) to use, license or otherwise exploit any Company Proprietary Asset.

(b)                                  The Company has taken reasonable measures and precautions to protect and maintain the confidentiality, secrecy and value of all material Company Proprietary Assets (except Company Proprietary Assets whose value would be unimpaired by disclosure).  No current or former employee, officer, director, shareholder, consultant or independent contractor has any right, claim or interest in or with respect to any Company Proprietary Asset.

(c)                                   All patents, trademarks, service marks and copyrights held by the Company are valid, enforceable and subsisting and no Company Proprietary Assets and no Proprietary Asset that is currently being developed by the Company (either by itself or with any other Person), to the Company’s knowledge, infringes, misappropriates or conflicts with any Proprietary Asset owned or used by any other Person.  The Company has not received any notice or other communication

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(in writing or otherwise) of any actual, alleged, possible or potential infringement, misappropriation or unlawful or unauthorized use of, any Proprietary Asset owned or used by any other Person.  To the best of the knowledge of the Company, no other Person is materially infringing, misappropriating or making any unlawful or unauthorized use of, and no Proprietary Asset owned or used by any other Person infringes or conflicts with, any material Company Proprietary Asset.

(d)                                  The Company Proprietary Assets constitute all the Proprietary Assets necessary to enable the Company to conduct its business in the manner in which such business has been and is being conducted.  Except as set forth in the License Agreement, the Company has not (i) licensed any Company Proprietary Assets to any Person on an exclusive basis, or (ii) entered into any covenant not to compete or Contract limiting or purporting to limit the ability of any Company to exploit fully any Company Proprietary Assets or to transact business in any market or geographical area or with any Person.

2.9        Contracts

(a)                                   Part 2.9 of the Company Disclosure Schedule identifies each Contract that constitutes a “ Company Material Contract ” of or to the Company.  For purposes of this Agreement, each of the following will be deemed to constitute a “Company Material Contract”:

2.1A                       any Contract (A) relating to the employment of, or the performance of services by, any employee or consultant, (B) pursuant to which the Company is or may become obligated to make any severance, termination, change in control or similar payment to any current or former employee or director, or (C) pursuant to which the Company is or may become obligated to make any bonus or similar payment (other than payments constituting base salary or normal commissions) in excess of $25,000 to any current or former employee or director;

2.1A                       any material Contract relating to the acquisition, transfer, development, sharing or license of any Proprietary Asset (except for any Contract pursuant to which (A) any Proprietary Asset is licensed to the Company under any third party software license generally available to the public, or (B) any Proprietary Asset which is not material to the Company’s business and is licensed by the Company to any Person on a non-exclusive basis);

2.1A                       any Contract pursuant to which (A) any monies have been loaned to the Company, or (B) the Company has granted a security interest in any of its assets;

2.1A                       any Contract imposing any restriction on the right or ability of the Company (A) to compete with any other Person, (B) to acquire any product or other asset or any services from any other Person, (C) to

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develop, sell, supply, distribute, offer, support or service any product or any technology or other asset to or for any other Person, or (D) to perform services for any other Person;

2.1A                       any Contract (other than Contracts evidencing Company Options) (A) relating to the acquisition, issuance, voting, registration, sale or transfer of any securities, (B) providing any Person with any pre-emptive right, right of participation, or similar right with respect to any securities, or (C) providing the Company with any right of first refusal with respect to, or right to repurchase or redeem, any securities;

2.1A                       any Contract incorporating or relating to any guarantee, any warranty or any indemnity or similar obligation, except for Contracts substantially identical to the end-user licenses, support agreements, consulting agreements and other customer contracts in the forms previously delivered by the Company to Parent;

2.1A                       any Contract containing “standstill” or similar provisions;

2.1A                       any Contract (A) to which any Governmental Body is a party or under which any Governmental Body has any rights or obligations, or (B) directly or indirectly benefiting any Governmental Body (including any subcontract or other Contract between the Company and any contractor or subcontractor to any Governmental Body);

2.1A                       any Contract requiring that the Company give any notice or provide any information to any Person prior to considering or accepting any Acquisition Proposal or similar proposal, or prior to entering into any discussions, agreement, arrangement or understanding relating to any Acquisition Transaction or similar transaction;

2.1A                       any Contract that contemplates or involves the guaranteed payment or delivery of cash or other consideration in an amount or having a value in excess of $10,000 in the aggregate or the payment of such consideration any time between the Effective Date and the date of this Agreement, or contemplates or involves the performance of services having a value in excess of $10,000 in the aggregate; and

2.1A                       any Contract that is otherwise material to the Company, including any Contract that could reasonably be expected to have a material effect on the ability of the Company to perform any of its obligations under, or to consummate any of the transactions contemplated by, this Agreement.

The Company has delivered or made available to Parent an accurate and complete copy of each Contract that constitutes a Company Material Contract.

(b)                                  Each Contract that constitutes a Company Material Contract is valid and in full force and effect, and is enforceable in accordance with its terms, subject to

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(i) laws of general application relating to bankruptcy, insolvency and the relief of debtors, and (ii) rules of law governing specific performance, injunctive relief and other equitable remedies.

(c)                                   The Company has not violated or breached, or committed any default in any material respect under, any Contract that constitutes a Company Material Contract and, to the best of the knowledge of the Company, no other Person has violated or breached, or committed any default under, any such Contract.  To the best of the knowledge of the Company, with respect to each Contract that is a Company Material Contract, no event has occurred, and no circumstance or condition exists, that (with or without notice or lapse of time) could reasonably be expected to (A) result in a violation or breach of any of the provisions of any such Contract, (B) give any Person the right to declare a default or exercise any remedy under any such Contract, (C) give any Person the right to receive or require a rebate, chargeback, penalty or change in delivery schedule under any such Contract, (D) give any Person the right to accelerate the maturity or performance of any such Contract, or (E) give any Person the right to cancel, terminate or modify any such Contract.  Since March 31, 2007, that Company has not received any notice or other communication regarding any actual or possible violation or breach of, or default under, any material Contract.

2.10      Liabilities

The Company does not have any accrued, contingent or other known liabilities of any nature, either matured or unmatured, except for: (a) liabilities identified as such in the “liabilities” column of the Company Balance Sheet and (b) normal and recurring current liabilities that have been incurred by the Company since the date thereof in the ordinary course of business and consistent with past practices.

2.11      Compliance with Legal Requirements

To the Company’s knowledge, the Company is, and has at all times been, in compliance in all material respects with all applicable Legal Requirements.  Since March 31, 2007, the Company has not received any notice or other communication from any Governmental Body or other Person regarding any actual or possible material violation of, or failure to comply with, any Legal Requirement.

2.12      Certain Business Practices

Except for the Interim Agreement, the License Agreement and this Agreement, there is no Contract, judgment, injunction, order or decree binding upon the Company that has or could reasonably be expected to have the effect of prohibiting, restricting or materially impairing any business practice of the Company, any acquisition of property by the Company or the conduct of business by the Company as currently conducted.

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2.13      Governmental Authorizations

The Company holds all Governmental Authorizations necessary to enable the Company to conduct its business in the manner in which such business is currently being conducted.  All such Governmental Authorizations are valid and in full force and effect.  The Company is in substantial compliance with the terms and requirements of such Governmental Authorizations.  The Company has not received any notice or other communication from any Governmental Body regarding (a) any actual or possible violation of or failure to comply with any term or requirement of any material Governmental Authorization, or (b) any actual or possible revocation, withdrawal, suspension, cancellation, termination or modification of any material Governmental Authorization.  No Governmental Body has at any time challenged in writing the right of the Company to design, manufacture, offer or sell any of its respective products or services.

2.14      Tax Matters

(a)                                   Each of the Tax Returns required to be filed by or on behalf of the Company with any Governmental Body with respect to any taxable period ending on or before the Closing Date (the “ Company Returns ”) (i) has been or will be filed on or before the applicable due date (including any extensions of such due date), and (ii) has been, or will be when filed, prepared in all material respects in compliance with all applicable Legal Requirements and will be true and correct in all material respects.  All amounts shown on the Company Returns to be due on or before the Closing Date have been or will be paid on or before the Closing Date.  All Taxes required to be withheld or collected have been and will continue to be withheld and paid or remitted on or before the applicable due date up to and before the Closing Date.

(b)                                  The Company Balance Sheet fully accrues all actual and contingent liabilities for Taxes with respect to all periods through the date thereof in accordance with Canadian generally accepted accounting principles.

(c)                                   No claim, Legal Proceeding, adjustment, assessment or reassessment is pending or, to the best of the knowledge of the Company, has been threatened, either formally or informally, against or with respect to the Company in respect of any Tax.  There are no unsatisfied liabilities for Taxes (including related expenses) with respect to any notice of assessment or reassessment or similar document received by any the Company with respect to any Tax (other than liabilities for Taxes asserted under any such notice of assessment or reassessment or similar document which are being contested in good faith by the Company and with respect to which adequate reserves for payment have been established on the Company Balance Sheet).  There are no liens for Taxes upon any of the assets of the Company except liens for current Taxes not yet due and payable.

2.15      Employee and Labour Matters; Benefit Plans

(a)                                   Part 2.15(a) of the Company Disclosure Schedule identifies each salary, bonus, vacation, deferred compensation, incentive compensation, stock purchase, stock

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option, severance pay, termination pay, death and disability benefits, hospitalization, medical, life or other insurance, flexible benefits, supplemental unemployment benefits, profit-sharing, pension or retirement plan, program or agreement and each other employee benefit plan or arrangement (collectively, the “Employee Plans” ) sponsored, maintained, contributed to or required to be contributed to by the Company for the benefit of any current or former employee of any of the Company.  The Company has delivered to Parent accurate and complete copies of the Employee Plans currently in force and all amendments thereto together with, as applicable, accurate and complete copies of all funding agreements and any Contracts relating to such Employee Plans (including service provider agreements, insurance contracts, minimum premium contracts, stop-loss agreements, investment management agreements, subscription and participation agreements and recordkeeping agreements), all summary descriptions of the Employee Plans provided to past or present participants therein, any annual information returns required to be filed under a Legal Requirement, the financial statements, if any, and evidence of any registration in respect thereof.

(b)                                  All of the Employee Plans are, and have been since their establishment, duly registered where required by Legal Requirement (including registration with the relevant tax authorities where such registration is required to qualify for tax exemption or other beneficial tax status) and are in good standing under, and in compliance with, all Legal Requirements.

(c)                                   All Employee Plans have been administered in accordance with their terms, there are no outstanding defaults or violations by the Company of any obligation required to be performed by it in connection with any Employee Plan and no order has been made or notice given pursuant to any Legal Requirements requiring (or proposing to require) the Company to take (or refrain from taking) any action in respect of any Employee Plan.

(d)                                  There are no actions, suits, claims, trials, demands, investigations, arbitrations or other proceedings pending or, to the knowledge of the Company threatened with respect to the Employee Plans against the Company, the funding agent, the insurers or the fund of such Employee Plans, other than claims for benefits in the ordinary course.

(e)                                   Neither the execution, delivery or performance of this Agreement, nor the consummation of the Arrangement or any of the other transactions contemplated by this Agreement, will result in any bonus, golden parachute, severance or other payment or obligation to any current or former employee or director of the Company (whether or not under any Employee Plan), or materially increase the benefits payable or provided under any Employee Plan, or result in any acceleration of the time of payment or vesting of any such benefits.

(f)                                     The Company has no salaried employees. The Company is not a party to any collective bargaining agreement with a trade union or council of trade unions.  No trade union, council of trade unions, employee bargaining agency or affiliated

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bargaining agent holds bargaining rights with respect to the Company’s employees by way of certification, interim certification, voluntary recognition, designation or successor rights, has applied to be certified as a bargaining agent of the Company’s employees or has applied to have the Company declared a related employer pursuant to applicable labour, employment or similar laws.

(g)                                  The Company is in compliance in all material respects with all applicable Legal Requirements and Contracts relating to employment, employment standards, employment practices, wages, bonuses, benefits and terms and conditions of employment, including employee compensation matters.

(h)                                  All amounts owing in respect of employee payroll withholding obligations, remittances, premiums, contributions and assessments under provincial or federal statutes or employee benefit plans have been fully accrued in the books and records of the Company and wages, vacation pay, holiday pay and employee benefits of the employees of the Company have been fully accrued in the Company’s books and records and reflected as such in the Company’s financial statements.

2.16      Insurance

The Company has delivered or made available to Parent a copy of all material insurance policies and all material self insurance programs and materials relating to the business, assets and operations of the Company.  Each of such insurance policies is in full force and effect.  The Company has not received any notice or other communication regarding any actual or possible (a) cancellation or invalidation of any insurance policy, (b) refusal of any coverage or rejection of any material claim under any insurance policy, or (c) material adjustment in the amount of the premiums payable with respect to any insurance policy.  There is no pending workers’ compensation or other claim under or based upon any insurance policy of the Company.

2.17      Legal Proceedings; Orders

(a)                                   There is no pending Legal Proceeding, and to the best of the knowledge of the Company, no Person has threatened to commence any Legal Proceeding: (i) that involves the Company or any of the assets owned or used by the Company; or (ii) that challenges, or that may have the effect of preventing, delaying, making illegal or otherwise interfering with, the Arrangement or any of the other transactions contemplated by this Agreement.  To the best of the knowledge of the Company, no event has occurred, and no claim, dispute or other condition or circumstance exists that could reasonably be expected to, give rise to or serve as a basis for the commencement of any such Legal Proceeding.

(b)                                  There is no order, writ, injunction, judgment or decree to which the Company, or any of the assets owned or used by the Company, is subject.  To the best of the knowledge of the Company, no officer or key employee of the Company is subject to any order, writ, injunction, judgment or decree that prohibits such

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officer or other employee from engaging in or continuing any conduct, activity or practice relating to the business of the Company.

2.18      Authority; Binding Nature of Agreement

The Company has the requisite corporate power and authority to enter into and to perform its obligations under this Agreement.  The board of directors of the Company (at a meeting duly called and held) has (a) unanimously determined that the Arrangement is fair to the Company Shareholders and in the best interests of the Company, (b) unanimously authorized and approved the execution, delivery and performance of this Agreement by the Company and unanimously approved the Arrangement, and (c) unanimously determined to recommend the approval of this Agreement by the holders of Common Shares and directed that this Agreement and the Arrangement be submitted for consideration by the Company Shareholders at the Company Shareholders’ Meeting.  This Agreement constitutes the legal, valid and binding obligations of the Company, enforceable against the Company in accordance with its terms, subject to (i) laws of general application relating to bankruptcy, insolvency and any similar law relating to creditors’ rights, and (ii) rules of law governing specific performance, injunctive relief and other equitable remedies.

2.19      Vote Required

Subject to the terms and conditions of the Interim Order, the approval of the Arrangement by 66 2/3% of the votes cast  by holders of Common Shares at the Company Shareholders’ Meeting  is the only vote of the holders of any class or series of the Company’s capital and securities necessary to approve the Arrangement and to otherwise consummate the transactions contemplated by this Agreement.

2.20      Non-Contravention; Consents

Neither (1) the execution, delivery or performance of this Agreement, nor (2) the consummation by the Company of the Arrangement or any of the other transactions contemplated by this Agreement, will directly or indirectly (with or without notice or lapse of time):

(a)                                   contravene, conflict with or result in a violation of (i) any of the provisions of the articles or certificate of incorporation, bylaws or other charter or organizational documents of the Company, or (ii) any resolution adopted by the shareholders, the board of directors or any committee of the board of directors of the Company;

(b)                                  subject to obtaining the Consents set forth in Section 6.4 of this Agreement, contravene, conflict with or result in a violation of any Legal Requirement or any order, writ, injunction, judgment or decree to which the Company, or any of the assets owned or used by the Company, is subject;

(c)                                   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

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held by the Company or that otherwise relates to the business of the Company or to any of the assets owned or used by the Company;

(d)                                  to the Company’s knowledge, contravene, conflict with or result in a violation or breach of, or result in a default under, any provision of any Contract that constitutes a Company Material Contract, or give any Person the right to (i) declare a default or exercise any remedy under any such Contract, (ii) a rebate, chargeback, penalty or change in delivery schedule under any such Contract, (iii) accelerate the maturity or performance of any such Contract, or (iv) cancel, terminate or modify any term of such Contract;

(e)                                   result in the imposition or creation of any Encumbrance upon or with respect to any asset owned or used by the Company (except for minor liens that will not, in any case or in the aggregate, materially detract from the value of the assets subject thereto or materially impair the operations of the Company); or

(f)                                     result in, or increase the likelihood of, the disclosure or delivery to any escrowholder or other Person of any Company Source Code, or the transfer of any material asset of the Company to any Person.

Except as may be required by the Interim Order, the Final Order, applicable securities laws or the BCA, the Company was not, is not nor will be required to make any filing with or give any notice to, or to obtain any Consent from, any Person in connection with (i) the execution, delivery or performance of this Agreement by the Company, or (ii) the consummation by the Company of the Arrangement or any of the other transactions contemplated by this Agreement.

2.21      No Broker or Finder

No broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the Arrangement or any of the other transactions contemplated by this Agreement based upon arrangements made by or on behalf of the Company.

2.22      Registration Rights

No holder of securities issued by the Company has any right to compel the Company to register or otherwise qualify such securities for public sale in Canada or the United States.

ARTICLE 3REPRESENTATIONS AND WARRANTIES OF PARENT AND EXCHANGECO

Parent and ExchangeCo represent and warrant to the Company that, except as set forth in the Parent Disclosure Schedule:

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3.1        Organization and Standing; Subsidiaries

(a)                                   Parent is a corporation duly organized and validly existing under the laws of the State of Oregon and has no subsidiaries or equity interests of any nature in any other Entity other than ExchangeCo and those subsidiaries listed in the Parent SEC Documents.  ExchangeCo is a corporation duly organized, validly existing and in good standing under the laws of the Province of British Columbia.

(b)                                  Each of Parent and ExchangeCo has all necessary power and authority: (a) to conduct its business in the manner in which its business is currently being conducted; (b) to own and use its assets in the manner in which its assets are currently owned and used; and (c) to perform its obligations under all Contracts by which it is bound.  Parent has not agreed nor is obligated to make, nor is bound by any Contract under which it may become obligated to make, any future investment in or capital contribution to any other Entity except as may be contemplated hereunder or by the Interim Agreement.  Parent is not a general partner of, and is not otherwise liable for any of the debts or other obligations of, any general partnership, limited partnership or other Entity.

(c)                                   Parent and ExchangeCo have delivered or made available to the Company, through EDGAR or otherwise, accurate and complete copies of their respective constating documents, including all amendments thereto.

3.2        Capitalization.

(a)                                   The authorized capital stock of Parent consists of 20,000,000 shares of Parent Common Stock and 2,000,000 shares of Preferred Stock.  As of November 30, 2007, 2,670,183 shares of Parent Common Stock were issued and outstanding and no shares of Preferred Stock were issued and outstanding. All of the outstanding shares of Parent Common Stock have been duly authorized and validly issued, and are fully paid and non-assessable.  As of November 30, 2007, Parent had issued stock options to purchase (i) 145,109 shares of Parent Common Stock pursuant to Parent’s 1995 Stock Option Plan, and (ii) 25,000 shares of Parent Common Stock pursuant to Parent’s 2004 Stock Option Plan.  As of November 30, 2007, 275,000 shares of Parent Common Stock are reserved for future issuance pursuant to outstanding stock options.  Parent is not under any obligation, nor is bound by any Contract pursuant to which it may become obligated, to repurchase, redeem or otherwise acquire any outstanding shares of Parent Common Stock.

(b)                                  The authorized capital stock of ExchangeCo consists of an unlimited number of common shares.  As of the date hereof, common shares of ExchangeCo were issued and outstanding.  All of the outstanding common shares of ExchangeCo have been duly authorized and validly issued, and are fully paid and non-assessable.

(c)                                   Except as set forth in the Parent SEC Documents or as contemplated herein, there is no (i) outstanding subscription, option, call, warrant or right (whether or not

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currently exercisable) to acquire any shares of Parent Common Stock or other shares of the capital stock or other securities of Parent; (ii) outstanding security, instrument or obligation that has the right to vote (other than shares of Parent Common Stock) or that is or may become convertible into or exchangeable for any shares of Parent Common Stock or other shares of the capital stock or other securities of Parent; or (iii) to Parent’s knowledge, any condition or circumstance that may give rise to or provide a basis for the assertion of a claim by any Person against Parent to the effect that such Person is entitled to acquire or receive any shares of capital stock or other securities of Parent.

3.3        SEC Filings; Financial Statements; Books and Records

(a)                                   Parent has delivered or made available, through EDGAR or otherwise, to the Company accurate and complete copies (including exhibits) of the Parent SEC Documents. Since May 31, 2004, all statements, reports, schedules, forms and other documents required to have been filed by Parent with the SEC have been so filed on a timely basis.  As of the time it was filed with the SEC (or, if amended or superseded by a filing prior to the date of this Agreement, then on the date of such filing): (i) each of the Parent SEC Documents complied in all material respects with the applicable requirements of the U.S Securities Act or the U.S. Exchange Act (as the case may be); and (ii) none of the Parent SEC Documents contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.  Parent is in material compliance with the bylaws, rules and regulations of NASDAQ.  Parent currently meets the eligibility requirements for filing a registration statement on Form S-3 in respect of a secondary offering.

(b)                                  The consolidated financial statements contained in the Parent SEC Documents: (i) complied as to form in all material respects with the published rules and regulations of the SEC applicable thereto; (ii) were prepared in accordance with generally accepted accounting principles applied on a consistent basis throughout the periods covered (except as may be indicated in the notes to such financial statements and, in the case of unaudited statements, subject to normal and recurring year-end adjustments which will not, individually or in the aggregate, be material in amount); and (iii) fairly present the consolidated financial position of Parent and its consolidated subsidiaries as of the respective dates thereof and the consolidated results of operations of Parent and its consolidated subsidiaries for the periods covered thereby.

(c)                                   The books, records and accounts of Parent, in all material respects, (i) have been maintained in accordance with good business practices consistent with prior years, (ii) are stated in reasonable detail and accurately and fairly reflect the transactions and dispositions of the assets of Parent, and (iii) accurately and fairly reflect the basis for the financial statements referred to in Section 3.3(b).  Parent has devised and maintains a system of internal accounting controls sufficient to provide reasonable assurances that:  (i) transactions are executed in accordance

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with management’s general or specific authorization; and (ii) transactions are recorded as necessary (A) to permit preparation of financial statements in conformity with United States generally accepted accounting principles or any other criteria applicable to such statements and (B) to maintain accountability for assets. To the best knowledge of Parent, there is no significant deficiency or material weaknesses in the design or operation of Parent’s internal control over financial reporting or any fraud involving management or other employees who have a significant role in the registrant’s internal control over financial reporting.

3.4        Absence of Changes

Since May 31, 2007, except as set out in the Interim Agreement, the License Agreement or the Parent SEC Documents and except as contemplated herein:

(a)                                   no event, violation, circumstance or other matter has occurred or arisen that, in combination with any other events or circumstances, has had or would reasonably be expected to have a Material Adverse Effect on Parent;

(b)                                  there has not been any material loss, damage or destruction to, or any material interruption in the use of, any of the assets of Parent (whether or not covered by insurance);

(c)                                   Parent has not: (i) declared, accrued, set aside or paid any dividend or made any other distribution in respect of any shares of Parent Common Stock, or (ii) repurchased, redeemed or otherwise reacquired any shares of Parent Common Stock or other securities;

(d)                                  Parent has not sold, issued or granted, or authorized the issuance of, (i) any shares of Parent Common Stock, capital stock or other security (except for shares of Parent Common Stock issued upon the valid exercise of outstanding stock options to purchase shares of Parent Common Stock or upon conversion of outstanding convertible debentures), (ii) any option, warrant or right to acquire any shares of Parent Common Stock, capital stock or any other security (except for stock options identified in Section 3.3), or (iii) any instrument convertible into or exchangeable for any shares of Parent Common Stock, capital stock or other security;

(e)                                   Parent has not amended or waived any of its rights under, or permitted the acceleration of vesting under, (i) any provision of any of Parent’s stock option plans, or (ii) any provision of any Contract evidencing any outstanding stock option of Parent;

(f)                                     there has been no amendment to the articles of incorporation or bylaws (or other constating documents) of Parent, and Parent has not effected or been a party to any merger, amalgamation, arrangement, consolidation, share exchange, business combination, recapitalization, reclassification of shares, stock split, reverse stock split or similar transaction;

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(g)                                  Parent has not formed any Subsidiary or acquired any equity interest or other interest in any other Entity;

(h)                                  Parent has not made any capital expenditure which exceeds $1,000,000 in the aggregate;

(i)                                      Parent has not (i) entered into or permitted any of the assets owned or used by it to become bound by any Parent Material Contract (as defined in Section 3.9) except in the ordinary course of business and consistent with past practices, or (ii) amended or terminated, or waived any material right or remedy under, any Parent Material Contract;

(j)                                      Parent has not (i) acquired, leased or licensed any material right or other material asset from any other Person except in the ordinary course of business and consistent with past practices, (ii) sold or otherwise disposed of, or leased or licensed, any material right or other material asset to any other Person, or (iii) waived or relinquished any material right;

(k)                                   Parent has not written off as uncollectible, or established any extraordinary reserve with respect to, any account receivable or other indebtedness having a value in excess of $50,000 in any individual case or $150,000 in the aggregate;

(l)                                      Parent has not made any pledge of any of its assets or otherwise permitted any of its assets to become subject to any Encumbrance, except for pledges of immaterial assets made in the ordinary course of business and consistent with past practices;

(m)                                Parent has not (i) lent money to any Person, or (ii) guaranteed any indebtedness for borrowed money;

(n)                                  Parent has not (i) adopted, established or entered into any Parent Employee Plan (as defined in Section 3.15), (ii) caused or permitted any Parent Employee Plan to be amended in any material respect, or (iii) paid any bonus or made any profit-sharing or similar payment to, or materially increased the amount of the wages, salary, commissions, fringe benefits or other compensation or remuneration payable to, any of its directors, officers or employees, other than in the normal course of business and consistent with past practices;

(o)                                  Parent has not changed any of its methods of accounting or accounting principles or practices in any respect, except as otherwise required by United States or United Kingdom generally accepted accounting principles;

(p)                                  Parent has not commenced or settled any Legal Proceeding;

(q)                                  Parent has not entered into any material transaction or taken any other material action that, either individually or in the aggregate, has had, or could reasonably be expected to have, a Material Adverse Effect on Parent;

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(r)             Parent has not entered into any material transaction or taken any other material action outside the ordinary course of business or inconsistent with past practices; and

(s)            Parent has not agreed or committed to take any of the actions referred to in clauses “(c)” through “(r)” above.

3.5         Title to Assets

Except as set out in the Parent SEC Documents, Parent owns, and has good and valid title to, all assets purported to be owned by it, including: (i) all assets reflected on the Parent Audited Balance Sheet and the Parent Unaudited Balance Sheet; and (ii) all other assets reflected in the books and records of Parent as being owned by Parent.  All of said assets are owned by Parent free and clear of any Encumbrances, except for (1) any lien for current taxes not yet due and payable, and (2) minor liens that have arisen in the ordinary course of business and that do not (in any case or in the aggregate) materially detract from the value of the assets subject thereto or materially impair the operations of Parent.

3.6         Receivables; Employee Loans; Advances

(a)            All existing accounts receivable of Parent (including those accounts receivable reflected on the Parent Unaudited Balance Sheet that have not yet been collected and those accounts receivable that have arisen since the date thereof and have not yet been collected) (i) represent valid obligations of customers of Parent arising from bona fide transactions entered into in the ordinary course of business and (ii) will, to the knowledge of Parent, be collected in full, without any counterclaim or set off except as are contemplated by Section 3.4(k) of this Agreement.

(b)            The Parent Disclosure Schedule contains an accurate and complete list of all outstanding loans and advances made by Parent to any employee, director, consultant or independent contractor, other than routine travel, meal and related advances made to employees in the ordinary course of business.

3.7         Real Property; Equipment; Leasehold

All material items of equipment and other tangible assets owned by or leased to Parent are adequate for the uses to which they are being put, are in good and safe condition and repair (ordinary wear and tear excepted) and are adequate for the conduct of the business of Parent in the manner in which such business is currently being conducted.  Parent does not own any real property or any interest in real property, except for real property identified in the Parent SEC Documents.

3.8         Proprietary Assets

(a)            Parent has good and valid title to all of the Proprietary Assets that are used in and material to its business, free and clear of all Encumbrances, except for any lien for current taxes not yet due and payable, and minor liens that have arisen in the ordinary course of business and that do not (individually or in the aggregate)

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materially detract from the value of such Proprietary Asset subject thereto or materially impair the operations of Parent.  Parent has a valid right to use, license and otherwise exploit all Proprietary Assets that are used in and material to its business.  Parent has a valid right to use, license and exploit any Parent Proprietary Asset identified above, subject to the terms thereof.  Parent has not developed jointly with any other Person any Proprietary Asset that is material to the business of Parent and with respect to which such other Person has any rights.  There is no Parent Contract (with the exception of end user license agreements, support agreements, consulting agreements and other customer contracts in the forms previously filed in the Parent SEC Documents) pursuant to which any Person has any right (whether or not currently exercisable) to use, license or otherwise exploit any Proprietary Asset of Parent.

(b)            Parent has taken reasonable measures and precautions to protect and maintain the confidentiality, secrecy and value of all material Proprietary Assets of Parent (except Proprietary Assets of Parent whose value would be unimpaired by disclosure).  No current or former employee, officer, director, shareholder, consultant or independent contractor has any right, claim or interest in or with respect to any Proprietary Asset of Parent.

(c)            All patents, trademarks, service marks and copyrights held by Parent are valid, enforceable and subsisting and none of the Proprietary Assets of Parent and no Proprietary Asset that is currently being developed by Parent (either by itself or with any other Person), to Parent’s knowledge, infringes, misappropriates or conflicts with any Proprietary Asset owned or used by any other Person.  Except as disclosed in the Parent SEC Documents, Parent has not received any notice or other communication (in writing or otherwise) of any actual, alleged, possible or potential infringement, misappropriation or unlawful or unauthorized use of, any Proprietary Asset owned or used by any other Person.  To the best of the knowledge of Parent, no other Person is materially infringing, misappropriating or making any unlawful or unauthorized use of, and no Proprietary Asset owned or used by any other Person infringes or conflicts with, any material Proprietary Asset of Parent.

(d)            The Proprietary Assets of Parent constitute all the Proprietary Assets necessary to enable Parent to conduct its business in the manner in which such business has been and is being conducted.  Parent has not (i) licensed any Proprietary Assets of Parent to any Person on an exclusive basis, or (ii) entered into any covenant not to compete or Contract limiting or purporting to limit the ability of Parent to exploit fully any Proprietary Assets of Parent or to transact business in any market or geographical area or with any Person.

3.9         Contracts

(a)            Part 3.9 of the Parent Disclosure Schedule identifies each Contract that constitutes a “Parent Material Contract” of or to Parent.  For purposes of this Agreement,

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each of the following will be deemed to constitute a “ Parent Material Contract ”:

2.1A        any Contract (A) relating to the employment of, or the performance of services by, any employee or consultant, (B) pursuant to which Parent is or may become obligated to make any severance, termination, change in control or similar payment to any current or former employee or director, or (C) pursuant to which Parent is or may become obligated to make any bonus or similar payment (other than payments constituting base salary or normal commissions) in excess of $150,000 to any current or former employee or director;

2.1A        any material Contract relating to the acquisition, transfer, development, sharing or license of any Proprietary Asset (except for any Contract pursuant to which (A) any Proprietary Asset is licensed to Parent under any third party software license generally available to the public, (B) any Proprietary Asset which is not material to Parent’s business and is licensed by Parent to any Person on a non-exclusive basis or (C) any Proprietary Asset which is licensed as part of a sale of Parent’s products in the ordinary course of business);

2.1A        any Contract pursuant to which (a) any monies have been loaned to Parent, or (B) Parent has granted a security interest in any of its assets;

2.1A        any Contract imposing any restriction on the right or ability of Parent (A) to compete with any other Person, (B) to acquire any product or other asset or any services from any other Person, (C) to develop, sell, supply, distribute, offer, support or service any product or any technology or other asset to or for any other Person, or (D) to perform services for any other Person;

2.1A        any Contract (other than Contracts evidencing options to purchase Parent Common Stock) (A) relating to the acquisition, issuance, voting, registration, sale or transfer of any securities, (B) providing any Person with any pre-emptive right, right of participation, or similar right with respect to any securities, or (C) providing Parent with any right of first refusal with respect to, or right to repurchase or redeem, any securities;

2.1A        any Contract incorporating or relating to any guarantee, any warranty or any indemnity or similar obligation, except for Contracts substantially identical to the end-user licenses, support agreements, consulting agreements and other customer contracts;

2.1A        any Contract containing “standstill” or similar provisions;

2.1A        any Contract (A) to which any Governmental Body is a party or under which any Governmental Body has any rights or obligations, or (B) directly or indirectly benefiting any Governmental Body (including any

25

subcontract or other Contract between Parent and any contractor or subcontractor to any Governmental Body);

2.1A        any Contract requiring that Parent give any notice or provide any information to any Person prior to considering or accepting any Acquisition Proposal or similar proposal, or prior to entering into any discussions, agreement, arrangement or understanding relating to any Acquisition Transaction or similar transaction;

2.1A        any Contract that contemplates or involves the guaranteed payment or delivery of cash or other consideration in an amount or having a value in excess of $150,000 in the aggregate or the payment of such consideration any time between the Effective Date and the date of this Agreement, or contemplates or involves the performance of services having a value in excess of $150,000 in the aggregate; and

2.1A        any Contract that is otherwise material to Parent and out of the ordinary course of business, including any Contract that could reasonably be expected to have a material effect on the ability of Parent to perform any of its obligations under, or to consummate any of the transactions contemplated by, this Agreement.

Parent has delivered or made available to the Company an accurate and complete copy of any Contract that constitutes a Parent Material Contract.

(b)            Each Contract that constitutes a Parent Material Contract is valid and in full force and effect, and is enforceable in accordance with its terms, subject to (i) laws of general application relating to bankruptcy, insolvency and the relief of debtors, and (ii) rules of law governing specific performance, injunctive relief and other equitable remedies.

(c)            Parent has not violated or breached, or committed any default in any material respect under, any Contract and, to the best of the knowledge of Parent, no other Person has violated or breached, or committed any default under, any Contract.  To the best of the knowledge of the Parent, no event has occurred, and no circumstance or condition exists, that (with or without notice or lapse of time) could reasonably be expected to (A) result in a violation or breach of any of the provisions of any Contract, (B) give any Person the right to declare a default or exercise any remedy under any Contract, (C) give any Person the right to receive or require a rebate, chargeback, penalty or change in delivery schedule under any Contract, (D) give any Person the right to accelerate the maturity or performance of any Contract, or (E) give any Person the right to cancel, terminate or modify any Contract.  Since May 31, 2007, Parent has not received any notice or other communication regarding any actual or possible violation or breach of, or default under, any material Contract.

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3.10       Liabilities

Parent has no accrued, contingent or other known liabilities of any nature, either matured or unmatured, except for: (a) liabilities identified as such in the “liabilities” column of Parent Unaudited Balance Sheet; and (b) normal and recurring current liabilities that have been incurred by Parent since the date thereof in the ordinary course of business and consistent with past practices.

3.11       Compliance with Legal Requirements

To the knowledge of Parent, Parent is, and has at all times been, in compliance in all material respects with all applicable Legal Requirements.  Since May 31, 2007, Parent has not has received any notice or other communication from any Governmental Body or other Person regarding any actual or possible material violation of, or failure to comply with, any Legal Requirement.

3.12       Certain Business Practices

There is no Contract, judgment, injunction, order or decree binding upon Parent that has or could reasonably be expected to have the effect of prohibiting, restricting or materially impairing any business practice of Parent, any acquisition of property by Parent or the conduct of business by Parent as currently conducted.

3.13       Governmental Authorizations

Parent holds all Governmental Authorizations necessary to enable Parent to conduct its business in the manner in which such business is currently being conducted.  All such Governmental Authorizations are valid and in full force and effect.  Parent is in substantial compliance with the terms and requirements of such Governmental Authorizations.  Parent has not received any notice or other communication from any Governmental Body regarding (a) any actual or possible violation of or failure to comply with any term or requirement of any material Governmental Authorization, or (b) any actual or possible revocation, withdrawal, suspension, cancellation, termination or modification of any material Governmental Authorization.  No Governmental Body has at any time challenged in writing the right of Parent to design, manufacture, offer or sell any of its respective products or services.

3.14       Tax Matters

(a)            Except as disclosed in the Parent Disclosure Schedule, each of the Tax Returns required to be filed by or on behalf of Parent with any Governmental Body with respect to any taxable period ending on or before the Closing Date (the “ Parent Returns ”) (i) has been or will be filed on or before the applicable due date (including any extensions of such due date), and (ii) has been, or will be when filed, prepared in all material respects in compliance with all applicable Legal Requirements and will be true and correct in all material respects.  All amounts shown on the Parent Returns to be due on or before the Closing Date have been or will be paid on or before the Closing Date except as disclosed herein.  All Taxes required to be withheld or collected have been and will continue to be withheld

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and paid or remitted on or before the applicable due date up to and before the Closing Date.

(b)            Parent Unaudited Balance Sheet fully accrues all actual and contingent liabilities for Taxes with respect to all periods through to the date thereof in accordance with United States generally accepted accounting principles.  Parent will establish, in the ordinary course of business and consistent with its past practices, reserves adequate for the payment of all Taxes for the period from the date thereof through the Closing Date.

(c)            No claim, Legal Proceeding, adjustment, assessment or reassessment is pending or, to the best of the knowledge of Parent, has been threatened, either formally or informally, against or with respect to Parent in respect of any Tax.  There are no unsatisfied liabilities for Taxes (including related expenses) with respect to any notice of assessment or reassessment or similar document received by Parent with respect to any Tax (other than liabilities for Taxes asserted under any such notice of assessment or reassessment or similar document which are being contested in good faith by Parent and with respect to which adequate reserves for payment have been established on the Parent Unaudited Balance Sheet).  There are no liens for Taxes upon any of the assets of Parent except liens for current Taxes not yet due and payable.  Parent has not entered into or become bound by any agreement or consent pursuant to Section 341(f) of United States Internal Revenue Code of 1986 (the “ Code ”) (or any comparable provision of state or foreign Tax laws).  Parent has not been, and Parent will not be, required to include any adjustment in taxable income for any tax period (or portion thereof) pursuant to Section 481 or 263A of the Code (or any comparable provision of state or foreign Tax laws) as a result of transactions or events occurring, or accounting methods employed, prior to the Closing other than as disclosed in the Parent SEC Documents.  Parent has not made any distribution of stock of any controlled corporation, as that term is defined in Section 355(a)(1) of the Code.

3.15       Employee and Labour Matters; Benefit Plans

(a)            The Parent SEC Documents identify and accurately describe in all material respects, or the Parent has delivered or made available to the Company, each material salary, bonus, vacation, deferred compensation, incentive compensation, stock purchase, stock option, severance pay, termination pay, death and disability benefits, hospitalization, medical, life or other insurance, flexible benefits, supplemental unemployment benefits, profit-sharing, pension or retirement plan, program or agreement and each other employee benefit plan or arrangement (collectively, the “ Parent Employee Plans ”) sponsored, maintained, contributed to or required to be contributed to by Parent for the benefit of any current or former employee of Parent.

(b)            All of the Parent Employee Plans are, and have been since their establishment, duly registered where required by Legal Requirement (including registration with the relevant tax authorities where such registration is required to qualify for tax

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exemption or other beneficial tax status) and are in good standing under, and in compliance with, all Legal Requirements.

(c)            All Parent Employee Plans have been administered in accordance with their terms in all material respects, there are no outstanding defaults or violations by Parent of any material obligation required to be performed by it in connection with any Parent Employee Plan and no order has been made or notice given pursuant to any Legal Requirements requiring (or proposing to require) Parent to take (or refrain from taking) any action in respect of any Parent Employee Plan.

(d)            There are no actions, suits, claims, trials, demands, investigations, arbitrations or other proceedings pending or, to the knowledge of Parent, threatened with respect to the Parent Employee Plans against Parent, the funding agent, the insurers or the fund of such Parent Employee Plans, other than claims for benefits in the ordinary course.

(e)            Except as disclosed in the Parent Disclosure Schedule, neither the execution, delivery or performance of this Agreement, nor the consummation of the Arrangement or any of the other transactions contemplated by this Agreement, will result in any bonus, golden parachute, severance or other payment or obligation to any current or former employee or director of Parent (whether or not under any Parent Employee Plan), or materially increase the benefits payable or provided under any Parent Employee Plan, or result in any acceleration of the time of payment or vesting of any such benefits.  Without limiting the generality of the foregoing, the consummation of the Arrangement will not result in the acceleration of vesting of any unvested stock options to purchase shares of Parent Common Stock.

(f)             Parent is not a party to any collective bargaining agreement with a trade union or council of trade unions.  No trade union, council of trade unions, employee bargaining agency or affiliated bargaining agent holds bargaining rights with respect to Parent’s employees by way of certification, interim certification, voluntary recognition, designation or successor rights, has applied to be certified as a bargaining agent of Parent’s employees or has applied to have Parent declared a related employer pursuant to applicable labour, employment or similar laws.  All of the employees of Parent are employed for an indefinite term and the employment of such employees may be terminated on reasonable notice.

(g)            Parent is in compliance in all material respects with all applicable Legal Requirements and Contracts relating to employment, employment standards, employment practices, wages, bonuses, benefits and terms and conditions of employment, including employee compensation matters.

(h)            All amounts owing in respect of employee payroll withholding obligations, remittances, premiums, contributions and assessments under provincial or federal statutes or employee benefit plans have been fully accrued in the books and records of Parent and wages, vacation pay, holiday pay and employee benefits of

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the employees of Parent have been fully accrued in Parent’s books and records and reflected as such in Parent’s financial statements.

3.16       Insurance

Parent maintains insurance policies adequate for a business of its size and nature, and has not received any notice or other communication regarding any actual or possible (a) cancellation or invalidation of any insurance policy, (b) refusal of any coverage or rejection of any material claim under any insurance policy, or (c) material adjustment in the amount of the premiums payable with respect to any insurance policy.  There is no pending workers’ compensation or other claim under or based upon any insurance policy of Parent.

3.17       Legal Proceedings; Orders

(a)            Except as disclosed in the Parent SEC Documents, there is no pending Legal Proceeding, and to the best of the knowledge of Parent, no Person has threatened to commence any Legal Proceeding: (i) that involves Parent or ExchangeCo or any of the assets owned or used by Parent or ExchangeCo; or (ii) that challenges, or that may have the effect of preventing, delaying, making illegal or otherwise interfering with, the Arrangement or any of the other transactions contemplated by this Agreement.  To the best of the knowledge of Parent and ExchangeCo, no event has occurred, and no claim, dispute or other condition or circumstance exists that could reasonably be expected to, give rise to or serve as a basis for the commencement of any such Legal Proceeding.

(b)            There is no order, writ, injunction, judgment or decree to which Parent, or any of the assets owned or used by Parent, is subject.  To the best of the knowledge of Parent, no officer or key employee of Parent is subject to any order, writ, injunction, judgment or decree that prohibits such officer or other employee from engaging in or continuing any conduct, activity or practice relating to the business of Parent.

3.18       Authority; Binding Nature of Agreement

Parent and ExchangeCo have the requisite corporate power and authority to perform their obligations under this Agreement and the Support and Exchange Agreement and the execution, delivery and performance by Parent and ExchangeCo of this Agreement and the Support and Exchange Agreement have been duly authorized by all necessary action on the part of Parent and ExchangeCo and their respective boards of directors.  This Agreement and the Support and Exchange Agreement constitute or will constitute legal, valid and binding obligations of Parent and ExchangeCo, enforceable against them in accordance with its terms, subject to (i) laws of general application relating to bankruptcy, insolvency and the relief of debtors, and (ii) rules of law governing specific performance, injunctive relief and other equitable remedies.

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3.19       No Vote Required

No vote of shareholders of Parent is required by any Legal Requirement, the constating documents of Parent, pursuant to NASDAQ rules or otherwise in order for Parent to approve the execution and delivery of this Agreement or the consummation of the transactions contemplated herein.

3.20       Non-Contravention; Consents

Neither (1) the execution, delivery or performance of this Agreement or the Support and Exchange Agreement by Parent and ExchangeCo, nor (2) the consummation by Parent and ExchangeCo of the Arrangement or the other transactions contemplated herein will, directly or indirectly (with or without notice or lapse of time),

(a)            contravene, conflict with or result in a violation of (i) any provision of the certificate or articles of incorporation or bylaws of Parent or ExchangeCo, or (ii) any resolution adopted by the shareholders or board of directors of Parent or ExchangeCo;

(b)            contravene, conflict with or result in a violation by Parent or ExchangeCo of any order, writ, injunction, judgment, decree or other Legal Requirement to which Parent or ExchangeCo is subject and, except as may be required by the Interim Order, the Final Order, the U.S. Securities Act, the U.S. Exchange Act, state securities or “blue sky” laws, NASDAQ, Oregon state law or any foreign antitrust law or regulation, Parent and ExchangeCo are not and will not be required to make any filing with or give any notice to, or to obtain any Consent from, any Person in connection with the execution, delivery or performance of this Agreement or the Support and Exchange Agreement or the consummation of the Arrangement;

(c)            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 Parent or ExchangeCo or that otherwise relates to the business of Parent or ExchangeCo or to any of the assets owned or used by Parent or ExchangeCo;

(d)            to Parent’s or ExchangeCo’s knowledge, contravene, conflict with or result in a violation or breach of, or result in a default under, any provision of any material Contract of Parent or ExchangeCo, or give any Person the right to (i) declare a default or exercise any remedy under any such Contract of Parent or ExchangeCo, (ii) a rebate, chargeback, penalty or change in delivery schedule under any such Contract of Parent or ExchangeCo, (iii) accelerate the maturity or performance of any such Contract of Parent or ExchangeCo, or (iv) cancel, terminate or modify any term of such material Contract of Parent or ExchangeCo;

(e)            result in the imposition or creation of any Encumbrance upon or with respect to any asset owned or used by Parent or ExchangeCo (except for minor liens that will not, in any case or in the aggregate, materially detract from the value of the

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assets subject thereto or materially impair the operations of Parent or ExchangeCo); or

(f)             result in, or increase the likelihood of, the disclosure or delivery to any escrowholder or other Person of any material asset of Parent or ExchangeCo to any Person.

3.21       Valid Issuance

The shares of Parent Common Stock to be issued under the Arrangement, the Exchangeable Shares and Redeemable Shares to be issued upon the exercise from time to time of the ExchangeCo Options and the Parent Common Stock to be issued on exchange of the Exchangeable Shares will, when issued in accordance with the provisions of this Agreement, the Plan of Arrangement, the ExchangeCo Options and the Support and Exchange Agreement, be validly issued, fully paid and non-assessable.

3.22       No Broker or Finder

No broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the Arrangement or any of the other transactions contemplated by this Agreement based upon arrangements made by or on behalf of Parent.

3.23       Registration Rights

Except as contemplated herein, no holder of securities issued by Parent has any right to compel Parent to register or otherwise qualify such securities for public sale in Canada or the United States.

ARTICLE 4CERTAIN COVENANTS PENDING COMPLETION OF THE ARRANGEMENT

4.1         Access and Investigation

During the period from the date of this Agreement to the earlier of (A) the Effective Time, and (B) the termination of this Agreement pursuant to the terms of Section 8.1 (the “Pre-Closing Period”), the Company and Parent will, and will cause their respective Representatives to: (1) provide the other and their respective Representatives with reasonable access to their Representatives, personnel and assets and to all existing books, records, Tax Returns, work papers and other documents and information relating to the Company or Parent, as the case may be; and (2) provide the other and their respective Representatives with such copies of the existing books, records, Tax Returns, work papers and other documents and information relating to the Company or Parent, as the case may be, and with such additional financial, operating and other data and information as the other may reasonably request.

4.2         Operation of Business

(a)            During the Pre-Closing Period the Company will (i) ensure that it conducts its business and operations (A) in the ordinary course and in accordance with past

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practices and (B) in compliance with all applicable Legal Requirements; (ii) use all reasonable efforts to ensure that it preserves intact its current business organization, keeps available the services of its current officers and employees and maintains its relations and goodwill with all suppliers, customers, landlords, creditors, licensors, licensees, employees and other Persons having business relationships with them; (iii) keep in full force all existing insurance policies or renewals thereof; (iv) cause to be provided all notices, assurances and support required by any Contract relating to any Proprietary Asset owned or held by them in order to ensure that no condition under such Contract occurs that could result in, or could increase the likelihood of a breach or violation thereof; (v) promptly notify the other of (A) any notice or other communication from any Person alleging that the Consent of such Person is or may be required in connection with any of the transactions contemplated by this Agreement, and (B) any Legal Proceeding commenced, or, to the best of its knowledge threatened against, relating to or involving or otherwise affecting any of the party or that relates to the consummation of the transactions contemplated by this Agreement.

(b)            During the Pre-Closing Period, the Company will not (except (i) with the prior written consent of Parent, which will not be unreasonably withheld or delayed and (ii) with respect to any matter that is expressly required by this Agreement):

2.1A        declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of capital stock, or repurchase, redeem or otherwise reacquire any of its shares or other securities;

2.1A        amend or permit the adoption of any amendment to its certificate of incorporation, articles or other charter or organizational documents, or effect or become a party to any merger, arrangement, consolidation, share exchange, business combination, amalgamation, recapitalization, reclassification of shares, stock split, reverse stock split, division or subdivision of shares, consolidation of shares or similar transaction;

2.1A        enter into or become bound by, or permit any of the assets owned or used by it to become bound by, (A) any material contract, or amend or terminate, or waive or exercise any material right or remedy under any existing material contract which relate to (1) any distribution arrangements, (2) any Proprietary Asset which is material to any of their respective businesses, (3) the license of any Proprietary Asset by or to any Person on an exclusive basis or (4) a third party’s ability to consent to any the transactions contemplated by this Agreement, or (B) any material contract not otherwise described above other than in the ordinary course of business and consistent with past practice;

2.1A        acquire, lease or license any right or other asset from any other Person or sell or otherwise dispose of, or lease or license, any right or other asset to any other Person (except in each case for immaterial assets acquired,

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leased, licensed or disposed of in the ordinary course of business and consistent with past practices), or waive or relinquish any material right;

2.1A        make any material Tax election;

2.1A        commence any Legal Proceeding (other than (A) for the routine collection of amounts owing or (B) in respect of a breach of this Agreement) or settle any Legal Proceeding;

2.1A        enter into any material transaction or take any other material action outside the ordinary course of business or inconsistent with past practices; or

2.1A        agree or commit to take any of the foregoing actions.

(c)            During the Pre-Closing Period, each of Parent and the Company, as the case may be, (the “ Notifying Party ”) will promptly notify the other party in writing of: (i) the discovery by the Notifying Party of any event, condition, fact or circumstance that occurred or existed on or prior to the date of this Agreement and that caused or constitutes a material inaccuracy in any representation or warranty made by the Notifying Party in this Agreement; (ii) any event, condition, fact or circumstance that occurs, arises or exists after the date of this Agreement and that would cause or constitute a material inaccuracy in any representation or warranty made by the Notifying Party in this Agreement if (A) such representation or warranty had been made as of the time of the occurrence, existence or discovery of such event, condition, fact or circumstance, or (B) such event, condition, fact or circumstance had occurred, arisen or existed on or prior to the date of this Agreement; (iii) any material breach of any covenant or obligation of the Notifying Party; (iv) where the Company is the Notifying Party, any event, condition, fact or circumstance, either individually or in the aggregate, that would make the timely satisfaction by the Company of any of the conditions set forth in Section Article 6 impossible or unlikely or that has had or could reasonably be expected to have a Material Adverse Effect on the Company; and (v) where Parent is the Notifying Party, any event, condition, fact or circumstance, either individually or in the aggregate, that would make the timely satisfaction by Parent of any of the conditions set forth in Section Article 7 impossible or unlikely or that has had or could reasonably be expected to have a Material Adverse Effect on Parent.  Notification given to Parent or the Company pursuant to this Section 4.2(c) will limit or otherwise affect any of the representations, warranties, covenants or obligations of the other party contained in this Agreement.

(d)            During the Pre-Closing Period, the Company will not, except as contemplated herein or with the prior written consent of Parent:

2.1A        sell, issue, grant or authorize the issuance or grant of (A) any shares or other capital stock or other security, (B) any option, call, warrant or right to acquire any shares or other capital stock or other security, or (C) any

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instrument convertible into or exchangeable for any shares or other capital stock or other security, except for the issuance of shares upon the valid exercise of any stock options outstanding as of the date of this Agreement; or

2.1A        establish, adopt or amend any employee benefit plan, pay any bonus or make any profit-sharing or similar payment to, or increase the amount of the wages, salary, commissions, fringe benefits or other compensation or remuneration payable to, any of its directors, officers or employees (except (A) routine, reasonable salary increases in connection with customary employee review process that do not in the aggregate exceed $25,000 per year, and (B) may pay customary bonus payments and profit sharing payments consistent with past practices payable in accordance with existing bonus and profit sharing plans that do not in the aggregate exceed $25,000).

(e)            During the Pre-Closing Period, Parent and ExchangeCo will (i) ensure that each of them conducts its business and operations (A) in the ordinary course and in accordance with past practices and (B) in compliance with all applicable Legal Requirements; (ii) cause to be provided all notices, assurances and support required by any Contract relating to any Proprietary Asset owned or held by Parent or ExchangeCo in order to ensure that no condition under such Contract occurs that could result in, or could increase the likelihood of a breach or violation thereof; and (iii) promptly notify the Company of (A) any notice or other communication from any Person alleging that the Consent of such Person is or may be required in connection with any of the transactions contemplated by this Agreement, and (B) any Legal Proceeding commenced, or, to the best of its knowledge threatened against, relating to or involving or otherwise affecting Parent or ExchangeCo or that relates to the consummation of the transactions contemplated by this Agreement.

(f)             During the Pre-Closing Period, neither Parent nor ExchangeCo will (except (i) with the prior written consent of the Company, which will not be unreasonably withheld or delayed and (ii) with respect to any matter that is expressly required by this Agreement):

2.1A        amend or permit the adoption of any amendment to its certificate of incorporation or bylaws or other charter or organizational documents;

2.1A        effect or become a party to any merger, arrangement, consolidation, share exchange, business combination, amalgamation, recapitalization, reclassification of shares, stock split, reverse stock split, division or subdivision of shares, consolidation of shares or similar transaction;