MERGER AGREEMENT

(a)

as soon as reasonable practicable following the date hereof, apply in a manner acceptable to Parent, acting reasonably, under section 182 of the OBCA for and diligently seek the Interim Order governing the calling and conduct of the TMB Meeting;

(b)

subject to section 2.4, lawfully convene and hold the TMB Meeting for the purpose of considering the Arrangement Resolution (and for no other purpose unless agreed to by Parent) as soon as reasonably practicable, and in any event, on or before the Meeting Date subject to adjournments or postponements which may be required pursuant to section 4.5(a);

(c)

subject to obtaining the approvals as are required by the Interim Order, as soon as reasonably practicable after the TMB Meeting, proceed with the application to the Court for and diligently seek 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, including sending to the Director, for endorsement and filing by the Director, the Articles of Arrangement and such other documents as may be required in connection therewith under the OBCA, and including making all other necessary filings with Governmental Entities to give effect to the Arrangement prior to the Drop Dead Date;

(e)

instruct counsel acting for it to bring the applications and make the filings referred to in sections 2.1(a), 2.1(c) and 2.1(d) in co-operation with counsel to Parent;

(f)

in connection with the Court applications referred to herein, permit Parent and its counsel to review and comment, such review and comment to be completed in a timely fashion, upon drafts of all material to be filed by TMB with the Court in connection with the Arrangement, including the Circular and any supplement or amendment contemplated by section 2.6(c) and provide counsel to TMB on a timely basis with copies of any notice of appearance and evidence served on TMB or its counsel in respect of application for the Interim Order and the Final Order or any appeal therefrom and of any notice (written or oral) received by TMB indicating any intention to oppose the granting of the Interim Order or the Final Order or to appeal the Interim Order or the Final Order; and

(g)

not file any material with the Court in connection with the Arrangement or serve any such material, and not agree to modify or amend materials so filed or served, except as contemplated hereby or with the prior written consent of Parent, such consent not to be unreasonably withheld or delayed.

(a)

for a record date for the TMB Meeting;

(b)

for the class of Persons to whom notice is to be provided in respect of the Arrangement and TMB Meeting and for the manner in which such notice is to be provided;

(c)

that the requisite approval for the Arrangement Resolution shall be 66 2/3% of the votes cast on the Arrangement Resolution by holders of TMB Common Shares and TMB Options voting together as a single class, including at least a simple majority of the votes cast on the Arrangement Resolution by holders of TMB Common Shares, excluding the votes cast by holders of TMB Options, present in person or by proxy at the TMB Meeting;

(d)

for approval of the form of proxy to be provided;

(e)

that, in all other respects, the terms, restrictions and conditions of the by-laws and articles of TMB, including quorum requirements and all other matters, shall apply in respect of TMB Meeting;

(f)

for the grant of the Dissent Rights; and

(g)

for the notice requirements with respect to the return of the application to the Court for the Final Order.

(a)

each outstanding TMB Common Share that is not held by a holder who has exercised its Dissent Rights and is ultimately entitled to be paid the fair value of TMB Common Shares (other than TMB Common Shares held by Parent or any Subsidiary or affiliate thereof), will be exchanged by the holder thereof for that number of fully paid and non-assessable Parent Common Shares equal to the Share Exchange Ratio, and the name of each such holder of TMB Common Shares will be removed from the register of holders of TMB Common Shares and added to the register of holders of Parent Common Shares and Parent or a Subsidiary of Parent, as the case may be, will be recorded as the registered holder of such TMB Common Shares so exchanged and will be deemed to be the legal and beneficial owner thereof;

(b)

each TMB Option outstanding immediately prior to the Effective Time, whether or not vested, shall be exchanged for an option granted by Parent (a "Converted Parent Option") to acquire (on the same terms and conditions as were applicable to such TMB Option pursuant to the relevant TMB Stock Option Plan under which it was issued and the agreement evidencing the grant thereof prior to the Effective Time) the number (rounded down to the nearest whole number) of Parent Common Shares determined by multiplying (A) the number of TMB Common Shares subject to such TMB Option immediately prior to the Effective Time by (B) the Share Exchange Ratio. The exercise price per Parent Common Share subject to any such Converted Parent Option (the "Converted Parent Option Exercise Price") will be an amount (rounded up to the nearest whole cent) equal to the quotient of (A) the exercise price per TMB Common Share subject to such TMB Option immediately prior to the Effective Time and (B) the Share Exchange Ratio, expressed in U.S. dollars based on the noon buying rate of the Bank of Canada on the last trading day immediately preceding the Effective Date. The conversion mechanism set forth in this section 2.3(b) shall be adjusted to the extent required to comply with Section 409A of the United States Internal Revenue Code and the rules, regulations and guidance promulgated thereunder, where applicable;

(c)

each TMB Warrant outstanding immediately prior to the Effective Time shall be deemed to be exchanged for a warrant to acquire (on the same terms and conditions as were applicable to such TMB Warrant pursuant to the terms under which it was issued and the agreement evidencing the issue thereof prior to the Effective Time) the number (rounded down to the nearest whole number) of

Parent Common Shares determined by multiplying (A) the number of TMB Common Shares subject to such TMB Warrant immediately prior to the Effective Time by (B) the Share Exchange Ratio. The exercise price per Parent Common Share subject to any such TMB Warrant will be an amount (rounded up to the nearest whole cent) equal to the quotient of (A) the exercise price per TMB Common Share subject to such TMB Warrant immediately prior to the Effective Time and (B) the Share Exchange Ratio, expressed in U.S. dollars based on the noon buying rate of the Bank of Canada on the last trading day immediately preceding the Effective Date. The conversion mechanism set forth in this section 2.3(c) shall be adjusted to the extent required to comply with Section 409A of the United States Internal Revenue Code and the rules, regulations and guidance promulgated thereunder, where applicable, as reasonably determined by Parent’s counsel; and

(d)

each TMB Convertible Security outstanding immediately prior to the Effective Time shall be deemed to be exchanged for a convertible security granted by Parent to acquire (on the same terms and conditions as were applicable to such TMB Convertible Security pursuant to the terms under which it was issued and the agreement evidencing the issue thereof prior to the Effective Time) the number (rounded down to the nearest whole number) of Parent Common Shares determined by multiplying (A) the number of TMB Common Shares subject to such TMB Convertible Security immediately prior to the Effective Time by (B) the Share Exchange Ratio. The exercise price per Parent Common Share subject to any such TMB Convertible Security will be an amount (rounded up to the nearest whole cent) equal to the quotient of (A) the exercise price per TMB Common Share subject to such TMB Convertible Security immediately prior to the Effective Time and (B) the Share Exchange Ratio, expressed in U.S. dollars based on the noon buying rate of the Bank of Canada on the last trading day immediately preceding the Effective Date. The conversion mechanism set forth in this section 2.3(d) shall be adjusted to the extent required to comply with Section 409A of the United States Internal Revenue Code and the rules, regulations and guidance promulgated thereunder, where applicable.

(a)

Parent shall use all reasonable efforts to obtain all orders required from the applicable Canadian securities authorities to permit the issuance and first resale of (a) the Parent Common Shares issued pursuant to the Arrangement and (b) the Parent Common Shares issued from time to time upon the exercise of the Converted Parent Options, in each case without qualification with or approval of or the filing of any prospectus or similar document, or the taking of any proceeding with, or the obtaining of any further order, ruling or consent from, any Governmental Entity or regulatory authority under any Canadian federal, provincial or territorial securities or other Laws or pursuant to the rules and regulations of any regulatory authority administering such Laws, or the fulfillment of any other legal requirement in any such jurisdiction (other than, with respect to such first resales, any restrictions on transfer by reason of, among other things, a holder being a "control person" of Parent or TMB for purposes of Canadian federal, provincial or territorial securities Laws).

(b)

As promptly as practicable after the Effective Date, Parent shall file either a registration statement on Form S-8 (or other applicable form) or an amendment to its existing registration statement on Form S-8 (the "Form S-8") in order to register under the 1933 Act those Parent Common Shares to be issued from time to time after the Effective Time upon the exercise of the Converted Parent Options.

(c)

TMB and Parent shall take all such steps as may be required to cause the transactions contemplated by Article 2 and any other dispositions of TMB equity securities and/or acquisitions of Parent equity securities (including, in each case derivative securities) in connection with this Agreement or the transactions contemplated hereby by any individual who is a director or officer of TMB, to be exempt under Rule 16b-3 promulgated under the Exchange Act.

(a)

Parent and TMB shall cooperate in:

(i)

the preparation of any application for the orders and the preparation of any required registration statements and any other documents reasonably deemed by Parent or TMB to be necessary to discharge their respective obligations under United States and Canadian federal, provincial, territorial or state securities Laws in connection with the Arrangement and the other transactions contemplated hereby;

(ii)

the taking of all such action as may be required under any applicable United States and Canadian federal, provincial, territorial or state securities Laws (including "blue sky laws") in connection with the issuance of the Parent Common Shares in connection with the Arrangement or the exercise of the Converted Parent Options; provided, however, that with respect to the United States "blue sky" and Canadian

provincial qualifications neither Parent nor TMB shall be required to register or qualify as a foreign corporation or to take any action that would subject it to service of process in any jurisdiction where such entity is not now so subject, except as to matters and transactions arising solely from the offer and sale of the Parent Common Shares; and

(iii)

the taking of all such action as may be required under the OBCA, the 1933 Act, the Exchange Act and the laws of the State of Delaware in connection with the transactions contemplated by this Agreement and the Plan of Arrangement.

(b)

Each of Parent and TMB shall furnish to the other all such information concerning it and its shareholders as may be required (and, in the case of its shareholders, available to it) for the effectuation of the actions described in sections 2.4 and 2.5 and the foregoing provisions of this section 2.6, and each covenants that no information furnished by it (to its knowledge in the case of information concerning its shareholders) in connection with such actions or otherwise in connection with the consummation of the Arrangement and the other transactions contemplated by this Agreement will contain any untrue statement of a material fact or omit to state a material fact required to be stated in any such document or necessary in order to make any information so furnished for use in any such document not misleading in the light of the circumstances in which it is furnished.

(c)

Parent and TMB shall each promptly notify the other if at any time before or after the Effective Time it becomes aware that the Circular or an application for an order or a registration statement described in section 2.5 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 Circular or such application or registration statement. In any such event, Parent and TMB shall cooperate in the preparation of a supplement or amendment to the Circular or such other document, as required and as the case may be, and, if required, shall cause the same to be distributed to shareholders of Parent or TMB and/or filed with the relevant securities regulatory authorities.

(d)

TMB shall ensure that the Circular complies with all applicable Laws and, without limiting the generality of the foregoing, that the Circular does not contain any untrue statement of a material fact or omit 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 (other than with respect to any information relating to and provided by Parent or any third party that is not an affiliate of TMB). Without limiting the generality of the foregoing, TMB shall ensure that the Circular provides holders of Common Shares with information in sufficient detail to permit them to form a reasoned judgment concerning the matters to be placed before them at the TMB Meeting and Parent shall provide all information regarding it necessary to do so.

(e)

Parent shall ensure that the Circular as it pertains to Parent and the Form S-8 comply with all applicable Laws and, without limiting the generality of the foregoing, that such documents do not contain any untrue statement of a material fact or omit 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 (other than with respect to any information relating to and provided by TMB or any third party that is not an affiliate of Parent) and TMB shall provide all information regarding TMB necessary to do so.

(a)

Organization .

(i)

Each of TMB and its Subsidiaries has been duly incorporated or formed under all applicable Laws, is validly subsisting and has full corporate or legal power and authority to own its properties and conduct its businesses as currently owned and conducted. All of the outstanding shares and other ownership interests of the TMB Subsidiaries which are held directly or indirectly by TMB are validly issued, fully paid and non-assessable and all such shares are owned directly or indirectly by TMB, free and clear of all liens, claims or encumbrances, except as set forth in section 3.1(a) of the TMB Disclosure Letter or pursuant to restrictions on transfers contained in constating documents, and except as aforesaid there are no outstanding options, rights, entitlements, understandings or commitments (contingent or otherwise) regarding the right to acquire any such shares in any of the TMB Subsidiaries. TMB has disclosed in section 3.1(a) of the TMB Disclosure Letter the names and jurisdictions of incorporation of each of the TMB Subsidiaries.

(ii)

Except as disclosed in section 3.1(a) of the TMB Disclosure Letter, neither TMB nor any of its Subsidiaries has any minority interest in any other corporation or entity.

(b)

Capitalization . The authorized capital of TMB consists of an unlimited number of Common Shares and an unlimited number of preferred shares. As of the date hereof, there were 49,672,723 TMB Common Shares and no preferred shares issued and outstanding, and 14,997,713 TMB Common Shares were reserved, in

the aggregate, for issuance in respect of TMB Options and TMB Warrants. TMB has disclosed in section 3.1(b) of the TMB Disclosure Letter all outstanding TMB Options and TMB Warrants. As of the date hereof, TMB had outstanding options under the TMB Stock Option Plan permitting the holders thereof to purchase 3,965,970 TMB Common Shares in the aggregate. Except as described in the preceding sentences of this section 3.1(b) and in section 3.1(a)(i), there are no options, warrants, conversion privileges or other rights, agreements, arrangements or commitments (pre-emptive, contingent or otherwise) obligating TMB or any of its Subsidiaries to issue or sell any shares of TMB or any of its Subsidiaries or securities or obligations of any kind convertible into or exchangeable for any shares of TMB, any TMB Subsidiary or any other Person, nor is there outstanding any stock appreciation rights, phantom equity or similar rights, agreements, arrangements or commitments based upon the book value, income or any other attribute of TMB or any Subsidiary. Except as set forth in section 3.1(b) of the TMB Disclosure Letter, there have been no TMB Common Shares issued or purchased for cancellation. All outstanding TMB Common Shares have been duly authorized and are validly issued and outstanding as fully paid and non-assessable shares, free of pre-emptive rights. There are no outstanding bonds, debentures or other evidences of indebtedness of TMB or any Subsidiary having the right to vote (or that are convertible for or exercisable into securities having the right to vote) with the holders of TMB Common Shares on any matter. Except as set forth in section 3.1(b) of the TMB Disclosure Letter, there are no outstanding contractual obligations of TMB or any of its Subsidiaries to repurchase, redeem or otherwise acquire any of its outstanding securities or with respect to the voting or disposition of any outstanding securities of any of the TMB Subsidiaries.

(c)

Authority and No Violation .

(i)

TMB has all requisite corporate power and authority to enter into this Agreement and to perform its obligations hereunder. The execution and delivery of this Agreement by TMB and the consummation by TMB of the transactions contemplated by this Agreement have been duly authorized by its Board of Directors and no other corporate proceedings on its part are necessary to authorize this Agreement, or the transactions contemplated hereby other than:

(A)

with respect to the Circular and other matters relating solely thereto, including the implementation of the Arrangement, the approval of the Board of Directors of TMB; and

(B)

with respect to the completion of the Arrangement, the approval of the holders of TMB Common Shares and TMB Options, voting as a single class.

(ii)

This Agreement has been duly executed and delivered by TMB and constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms, subject to bankruptcy, insolvency and other applicable Laws affecting creditors’ rights generally, and to general

principles of equity and to the fact that the Currency Act (Canada) precludes a court in Canada from giving judgment in any currency other than Canadian currency.

(iii)

The Board of Directors of TMB has (A) determined that the Arrangement is fair to the holders of TMB Common Shares and is in the best interests of TMB, (B) received an opinion from Leerink Swann & Company to the effect that, as of the date of such opinion, the Share Exchange Ratio is fair from a financial point of view to the holders of TMB Common Shares, a copy of which opinion will be provided to Parent solely for informational purposes after receipt thereof by TMB, and (C) determined to recommend that the holders of TMB Common Shares and TMB Options vote in favour of the Arrangement. TMB is not subject to a shareholder rights plan or "poison pill" or similar plan.

(iv)

On behalf of Parent, TMB has obtained, and has provided to Parent, signed copies of Voting Agreements in the form of Schedule D from those of TMB’s directors, officers and their affiliates specified in section 3.1(c) of the TMB Disclosure Letter.

(v)

The approval of this Agreement, the execution and delivery by TMB of this Agreement and the performance by it of its obligations hereunder and the completion of the Arrangement and the transactions contemplated thereby, will not, except as disclosed in section 3.1(c) of the TMB Disclosure Letter:

(A)

result in a violation or breach of, require any consent to be obtained under or give rise to any termination, purchase or sale rights or payment obligation under any provision of:

(I)

its or any TMB Subsidiary’s certificate of incorporation, articles, by-laws or other charter documents, including any unanimous shareholder agreement or any other agreement or understanding relating to ownership of shares or other interests or to corporate governance with any party;

(II)

subject to obtaining the Appropriate Regulatory Approvals relating to TMB, any Laws, judgment or decree except to the extent that the violation or breach of, or failure to obtain any consent under, any Laws, judgment or decree would not, individually or in the aggregate, have a Material Adverse Effect on TMB; or

(III)

subject to obtaining the Appropriate Regulatory Approvals relating to TMB and except as would not, individually or in the aggregate, have a Material Adverse Effect on TMB, any material contract, agreement, license,

franchise or permit to which TMB or any of its Subsidiaries is party or by which it is bound or subject or is the beneficiary;

(B)

give rise to any right of termination or acceleration of indebtedness of TMB or any Subsidiary, or cause any such indebtedness to come due before its stated maturity or cause any available credit of TMB or any Subsidiary to cease to be available;

(C)

except as would not, individually or in the aggregate, have a Material Adverse Effect on TMB, result in the imposition of any encumbrance, charge or lien upon any of its assets or the assets of any of its Subsidiaries, or restrict, hinder, impair or limit the ability of TMB or any of its Subsidiaries to carry on the business of TMB or any of its Subsidiaries as and where it is now being carried on; or

(D)

result in any payment (including severance, unemployment compensation, golden parachute, bonus or otherwise) becoming due to any director or employee of TMB or any Subsidiary or increase any benefits otherwise payable under any TMB Plan or result in the acceleration of time of payment or vesting of any such benefits, including the time of exercise of stock options.

Except as disclosed in section 3.1(c) of the TMB Disclosure Letter, no consent, approval, order or authorization of, or declaration or filing with, any Governmental Entity is required to be obtained by TMB and its Subsidiaries in connection with the execution and delivery of this Agreement, the performance by TMB of its obligations hereunder or the consummation by TMB of the transactions contemplated hereby other than (A) any approvals required by the Interim Order, (B) the Final Order, (C) filings with the Director under the OBCA, (D) the Appropriate Regulatory Approvals relating to TMB and (E) any other consents, approvals, orders, authorizations, declarations or filings of or with a Governmental Entity, a list of which is set out in Section 3.1(c) of the TMB Disclosure Letter, and which, if not obtained, would not, individually or in the aggregate, have a Material Adverse Effect on TMB.

(d)

No Defaults. Subject to obtaining the Appropriate Regulatory Approvals relating to TMB and except as disclosed in section 3.1(d) of the TMB Disclosure Letter, neither TMB nor any of its Subsidiaries is in default under, and there exists no event, condition or occurrence which, after notice or lapse of time or both, would constitute such a default under, (i) their respective constating documents, or (ii) any Material Contract.

(e)

Absence of Certain Changes or Events. Except as disclosed in section 3.1(e) of the TMB Disclosure Letter, from December 31, 2005 through to the date hereof each of TMB and its Subsidiaries has conducted its business only in the ordinary

and regular course of business consistent with past practice and there has not occurred:

(i)

a Material Adverse Change with respect to TMB;

(ii)

any damage, destruction or loss, whether covered by insurance or not, that would reasonably be expected to have a Material Adverse Effect on TMB;

(iii)

any redemption, repurchase or other acquisition of TMB Common Shares by TMB or any declaration, setting aside or payment of any dividend or other distribution (whether in cash, stock or property) with respect to TMB Common Shares;

(iv)

any material increase in or modification of the compensation payable or to become payable by it to any of its directors or officers, or any grant to any such director or officer of any increase in severance or termination pay;

(v)

any increase in or modification of any bonus, pension, insurance or benefit arrangement (including the granting of stock options, restricted stock awards or stock appreciation rights) made to, for or with any of its directors or officers;

(vi)

any acquisition or sale of its property or assets aggregating 10% or more of TMB’s total consolidated property and assets as at December 31, 2005, other than in the ordinary and regular course of business consistent with past practice;

(vii)

any entering into, amendment of, relinquishment, termination or non-renewal by it of any material contract, agreement, license, franchise, lease transaction, commitment or other right or obligation, other than in the ordinary and regular course of business consistent with past practice;

(viii)

any resolution to approve a split, combination or reclassification of any of its outstanding shares; or

(ix)

any change in its accounting methods, principles or practices.

(f)

Employment Matters.

(i)

Except as set forth in section 3.1(f) of the TMB Disclosure Letter, neither TMB nor any of its Subsidiaries is a party to any written or oral policy, agreement, obligation or understanding providing for severance or termination payments to, or any bonus or similar payment, or any employment agreement with, any director or officer.

(ii)

Except as set forth in section 3.1(f) of the TMB Disclosure Letter, neither TMB nor any of its Subsidiaries is a party to any collective bargaining agreement nor subject to any application for certification or, to the knowledge of TMB, threatened or apparent union-organizing campaigns

for employees not covered under a collective bargaining agreement nor are there any current, pending or, to the knowledge of TMB, threatened strikes or lockouts at TMB or any of its Subsidiaries.

(iii)

Except as set forth in section 3.1(f) of the TMB Disclosure Letter, neither TMB nor any of its Subsidiaries is subject to any claim for wrongful dismissal, constructive dismissal or any other tort claim, actual or, to the knowledge of TMB, threatened, or any litigation, actual or, to the knowledge of TMB, threatened, relating to employment or termination of employment of employees or independent contractors.

(iv)

TMB and all of its Subsidiaries, since January 1, 2004 have operated in accordance with all applicable Laws with respect to employment and labour, including employment and labour standards, occupational health and safety, employment equity, pay equity, workers’ compensation, human rights and labour relations and there are no current, pending or, to the knowledge of TMB, threatened proceedings before any board or tribunal with respect to any of the above areas, other than where the failure to so operate or such proceedings which, individually or in the aggregate, would not have a Material Adverse Effect on TMB.

(v)

Except as disclosed in section 3.1(f) of the TMB Disclosure Letter, all employees of TMB and its Subsidiaries and persons who have ceased to be employees of TMB or its Subsidiaries since January 1, 2005 have been, or shall have been on or before the Effective Date, paid or amounts in respect thereof shall have been accrued for wages, salaries, commissions, bonuses, vacation pay, severance and termination pay, sick pay, and other compensation for all services performed by them or that was accrued by them up to the Effective Date, in accordance with the obligations of TMB and its Subsidiaries under any employment or labour practices and policies or any collective bargaining agreement or individual agreement to which TMB or its Subsidiaries is a party, or by which TMB or its Subsidiaries may be bound.

(vi)

Except as disclosed in section 3.1(f) of the TMB Disclosure Letter, TMB is not a party to or bound by any consulting or independent contractor agreements that cannot be terminated at the election of TMB on thirty days’ prior notice without liability, penalty or premium. TMB has made available to Parent true, correct and complete forms of any arbitration agreements or confidentiality agreements between TMB and an officer, employee or former employee of TMB or its Subsidiaries. Neither TMB nor any of its Subsidiaries has made any verbal commitments to any such officers, employees, former employees consultants or independent contractors with respect to compensation, promotion, retention, termination, severance or similar matters in connection with the transactions contemplated by this Agreement or otherwise. Except as disclosed in section 3.1(f) of the TMB Disclosure Letter, there are no

(g)

Financial Statements. The audited consolidated financial statements for TMB as at and for each of the 12-month periods ended December 31, 2005, 2004 and 2003, and the unaudited consolidated financial statements for the nine month period ended September 30, 2006 (i) have been prepared in accordance with Canadian generally accepted accounting principles (in each case subject, in the case of such unaudited financial statements, to the absence of notes and to year-end adjustments), (ii) comply in all material respects with the requirements of applicable Governmental Entities and applicable securities Laws, (iii) are in accordance with the books and records of TMB, (iv) contain and reflect all necessary adjustments for fair presentation of the results of operations and financial condition of the business of TMB for the periods covered thereby, and (v) contain and reflect adequate provision or allowance for all reasonably anticipated liabilities, expenses and losses of TMB. Except as disclosed in section 3.1(g) of the TMB Disclosure Letter, all financial statements referenced in this section 3.1(g) present fairly, in all material respects, the consolidated financial position and results of operations of TMB and its Subsidiaries, as the case may be, as of the respective dates thereof and for the respective periods covered thereby, subject, in the case of such unaudited financial statements, to year-end adjustments, which year-end adjustments, individually or in the aggregate, would not have a Material Adverse Effect on TMB.

(h)

Books and Records. The books, records and accounts of TMB and its Subsidiaries (i) have been maintained in accordance with good business practices on a basis consistent with prior years, (ii) are stated in reasonable detail and accurately and fairly reflect the transactions and dispositions of the assets of TMB and its Subsidiaries, and (iii) accurately and fairly reflect the basis for TMB consolidated financial statements. TMB has devised and maintains a system of internal accounting controls sufficient to provide reasonable assurances that (i) transactions are executed in accordance with management’s general or specific authorization, and (ii) transactions are recorded as necessary (A) to permit preparation of financial statements in conformity with Canadian generally accepted accounting principles or any other criteria applicable to such statements and (B) to maintain accountability for assets.

(i)

Litigation, Etc. Except as set forth in section 3.1(i) of the TMB Disclosure Letter or Publicly Disclosed by TMB, there is no claim, action, proceeding or investigation (including any native land claims) pending or, to the knowledge of TMB, threatened against TMB or any of its Subsidiaries before any court or Governmental Entity that would reasonably be expected to have a Material Adverse Effect on TMB, or prevent or materially delay consummation of the transactions contemplated by this Agreement or the Arrangement. Neither TMB nor any of its Subsidiaries, nor their respective assets and properties, is subject to any outstanding judgment, order, writ, injunction or decree that has had or is reasonably likely to have a Material Adverse Effect on TMB or that would

prevent or materially delay consummation of the transactions contemplated by this Agreement or the Arrangement.

(j)

Environmental. All operations of TMB and its Subsidiaries have been conducted, and are now, in compliance, in all material respects, with all Environmental Laws; and TMB and its Subsidiaries are in possession of, and in compliance, in all material respects, with, all permits, authorizations, certificates, registrations, approvals and consents necessary under Environmental Laws to own, lease and operate their properties and conduct their respective businesses as they are now being conducted or as proposed to be conducted.

(k)

Tax Matters . Except as set forth in section 3.1(k) of the TMB Disclosure Letter:

(i)

TMB and each of its Subsidiaries have filed, or caused to be filed, all material Tax Returns required to be filed by them (all of which returns were correct and complete in all material respects) and have paid, or caused to be paid, all material amounts of Taxes shown to be due and payable thereon, and TMB’s most recently published financial statements contain an adequate provision in accordance with generally accepted accounting principles for all material amounts of Taxes payable in respect of each period covered by such financial statements and all prior periods to the extent such Taxes have not been paid, whether or not due and whether or not shown as being due on any Tax Returns. TMB and each of its Subsidiaries have made adequate provision in accordance with generally accepted accounting principles in their books and records for any material amounts of Taxes accruing in respect of any accounting period which has ended subsequent to the period covered by such financial statements.

(ii)

Neither TMB nor any TMB Subsidiary has received any written notification that any issues involving a material amount of Taxes have been raised (and are currently pending) by the Canada Revenue Agency, the United States Internal Revenue Service, or any other taxing authority, including, without limitation, any sales tax authority, in connection with any Taxes due or any of the Tax Returns referred to above and no waivers of statutes of limitations have been given or requested with respect to TMB or any of its Subsidiaries. All liability of TMB and its Subsidiaries for income taxes has been assessed (but may not have been audited) for all fiscal years up to and including the fiscal year ended December 31, 2005. There are no additional Taxes proposed in writing (but unassessed) involving a material amount of Taxes and none has been asserted in writing. No Tax liens have been filed upon the assets of TMB or any TMB Subsidiary for any material amounts of Taxes. Neither TMB nor any of its Subsidiaries is a party to any Tax sharing or other similar agreement or arrangement of any nature with any other person pursuant to which TMB or any of its Subsidiaries has or could have any material liabilities in respect of Taxes.

(iii)

TMB and each of its Subsidiaries have properly withheld and remitted all material tax amounts required to be withheld and/or remitted and have paid such amounts to the appropriate authority on a timely basis and in the form required by the appropriate legislation.

(iv)

To the knowledge of TMB, no assessment, reassessment, audit or investigation by any governmental agency is under way, threatened or proposed with respect to any material amount of Taxes for which TMB or any of its Subsidiaries could be liable, in whole or in part.

(v)

Neither TMB nor any of the TMB Subsidiaries (i) is or has even been a member of an affiliated group (other than a group the common parent of which is TMB) filing a consolidated tax return for U.S. federal income tax purposes or (ii) has any liability for Taxes of any person (other than TMB and the TMB Subsidiaries) arising from the application of United States Treasury Regulation section 1.1502-6 or any analogous provision of other Laws, or as a transferee or successor, by contract, or otherwise.

(vi)

No closing agreement pursuant to Section 7121 of the United States Internal Revenue Code of 1986, as amended (or any similar provision of other Law) has been entered into by or with respect to TMB or any of the TMB Subsidiaries with respect to any taxable year ending after December 31, 2001.

(vii)

None of the TMB Subsidiaries has been a "distributing corporation" or a "controlled corporation" in any distribution occurring during the last two (2) years in which the parties to such distribution treated the distribution as one to which Section 355 of the United States Internal Revenue Code of 1986, as amended, is applicable.

(viii)

Neither TMB nor any of the TMB Subsidiaries has participated in any transaction giving rise to a disclosure obligation as a "reportable transaction" under Section 6011 of the United States Internal Revenue Code of 1986, as amended, and the regulations thereunder (or any similar provision of other Laws) other than any such transaction that has been properly disclosed thereunder.

(ix)

None of sections 78, 80, 80.01, 80.02, 80.03 or 80.04 of the Income Tax Act (Canada), or any equivalent provision of the Tax legislation of any province or any other jurisdiction of Canada, have applied or will apply to TMB and the TMB Subsidiaries at any time up to and including the Effective Date.

(x)

TMB and the TMB Subsidiaries have not acquired property from a non-arm’s length Person, within the meaning of the Income Tax Act (Canada), for consideration, the value of which is less than the fair market value of the property acquired in circumstances which could subject it to a liability under section 160 of the Income Tax Act (Canada).

(xi)

For all transactions between TMB and the TMB Subsidiaries resident in Canada and any non-resident Person with whom they were not dealing at arm’s length during a taxation year commencing after 1998 and ending on or before the Closing Date, they have made or obtained records or documents that meet the requirements of paragraphs 247(4)(a) to (c) of the Income Tax Act (Canada).

(xii)

TMB and the TMB Subsidiaries (other than Tm Bioscience HG Inc.) are duly registered under subdivision (d) of Division V or Part IX of the Excise Tax Act (Canada) with respect to the goods and services tax and harmonized sales tax and TMB and the TMB Subsidiaries registration numbers are: 101274553 (TMB) and 81441 8273 RT0001 (PGx Inc.).

(l)

Pension and Employee Benefits.

(i)

Section 3.1(l) of the TMB Disclosure Letter sets forth a list of all employee benefit, health, welfare, supplemental unemployment benefit, bonus, pension, profit sharing, deferred compensation, stock compensation, stock purchase, retirement, hospitalization insurance, medical, dental, legal, disability and similar plans or arrangements or practices, whether written or oral, which are maintained, sponsored or contributed to by TMB and/or a TMB Subsidiary or with respect to which TMB and/or a TMB Subsidiary participates or has any liability or obligation (collectively referred to as the "TMB Plans").

(ii)

No step has been taken, no event has occurred and no condition or circumstance exists that has resulted in or could reasonably be expected to result in any TMB Plan being ordered or required to be terminated or wound up in whole or in part or having its registration under applicable Laws refused or revoked, or being placed under the administration of any trustee or receiver or regulatory authority or being required to pay any Taxes, fees, penalties or levies under applicable Laws. There are no actions, suits, claims (other than routine claims for payment of benefits in the ordinary course), trials, demands, investigations, arbitrations or other proceedings which are pending or threatened in respect of any of the TMB Plans or their assets which individually or in the aggregate would have a Material Adverse Effect on TMB or a TMB Subsidiary. Further, there exists no state or facts which after notice or lapse of time or both could reasonably be expected to give rise to any such action, suit, claim, trial, demand, investigation, arbitration or other proceeding.

(iii)

TMB has made available to Parent true, correct and complete copies of all of the TMB Plans as amended (or, in the case of any unwritten TMB Plan, a description thereof) together with all related documentation including, without limitation, funding agreements, actuarial reports, funding and financial information returns and statements and material correspondence with regulatory authorities with respect to each TMB Plan, and current plan summaries, booklets and personnel manuals.

(iv)

Other than as disclosed in Section 3.1(l) of the TMB Disclosure Letter, all of the TMB Plans are and have been established, registered, qualified, invested and administered in accordance with all applicable Laws, and in accordance with their terms and the terms of agreements between TMB and/or a TMB Subsidiary, as the case may be, and their respective employees. No fact or circumstance exists that could adversely affect the existing tax status of a TMB Plan.

(v)

All obligations of TMB or a TMB Subsidiary regarding the TMB Plans have been satisfied. All contributions or premiums required to be made by TMB and/or a TMB Subsidiary, as the case may be, under the terms of each TMB Plan or by applicable Laws have been made in a timely fashion in accordance with applicable Laws and the terms of the TMB Plans. All liabilities of TMB and its Subsidiaries (whether accrued, absolute, contingent or otherwise) related to the TMB Plans have been fully and accurately disclosed in accordance with GAAP in TMB’s financial statements.

(vi)

No insurance policy or any other contract or agreement affecting any TMB Plan requires or permits a retroactive increase in premiums or payments due thereunder.

(vii)

Except as set forth in Section 3.1(1) of the TMB Disclosure Letter, none of the TMB Plans provides for the payment of a benefit, the increase of a benefit amount, the payment of a contingent benefit or the acceleration of the payment or vesting of a benefit by reason of the execution of or the consummation of the transactions contemplated by this Agreement or the Arrangement.

(viii)

None of the TMB Plans is a "registered pension plan" or a "multi-employer pension plan", defined in both cases pursuant to Laws.

(ix)

Except as disclosed in section 3.1(l) of the TMB Disclosure Letter, none of the TMB Plans provides post-retirement benefits to or in respect of employees of TMB or its Subsidiaries or to or in respect of their respective beneficiaries.

(x)

All data necessary to administer each TMB Plan is true and correct.

(m)

Reports and Internal Accounting Controls. Except as disclosed in section 3.1(m) of the TMB Disclosure Letter, TMB has on a timely basis filed all forms, reports, and documents required to be filed by it with the OSC under the Securities Act. Since the effective date of TMB’s registration statement on Form 20-F with the SEC, TMB has on a timely basis filed all forms, reports and documents required to be filed by it with the SEC under the Exchange Act and SOX. No TMB Subsidiary is or has been required to file any form, report, registration statement, or other document with the OSC or other provincial securities regulatory authority. TMB has not filed any confidential material change report with the

(n)

Compliance with Laws. Except as disclosed in section 3.1(n) of the TMB Disclosure Letter, TMB and the TMB Subsidiaries have complied in all material respects with and are not in violation, in any material respects, of any applicable Laws, orders, judgments or decrees. Without limiting the generality of the foregoing, all securities of TMB (including, all options, rights or other convertible or exchangeable securities) have been issued in compliance with all applicable securities Laws and all securities to be issued upon exercise of any such options, rights and other convertible or exchangeable securities will, if issued pursuant to the terms of the documents governing such options, rights and other convertible or exchangeable securities, be issued in compliance with all applicable securities Laws. TMB is in compliance with all applicable listing requirements and standards of the Toronto Stock Exchange.

(o)

Regulatory Matters. Except as disclosed in section 3.1(o) of the TMB Disclosure Letter, TMB and each TMB Subsidiary has and is in compliance, in all material respects, with, all licenses and permits, including without limitation from Health Canada and the U.S. Food and Drug Administration, necessary under Laws to conduct their respective businesses as they are now being conducted. Neither TMB nor any TMB Subsidiary is aware of any Laws to which TMB or such TMB Subsidiary is subject which requires or may require any work, repairs, construction, changes in business practices or operations, or expenditures, including capital expenditures for facility upgrades. Neither TMB nor any TMB Subsidiary is aware of any demand, notice or inspection report with respect to the breach of or liability under any Laws applicable to TMB or any Subsidiary.

(p)

Restrictions on Business Activities. Except as set forth in section 3.1(p) of the TMB Disclosure Letter, there is no agreement, judgment, injunction, order or decree binding upon TMB or any TMB Subsidiary that has or could reasonably be expected to have the effect of prohibiting, restricting or impairing (a) any business practice of TMB or any of its Subsidiaries, (b) any acquisition of property by TMB or any of its Subsidiaries or (c) the conduct of business by TMB or any of its Subsidiaries as currently conducted, other than such agreements, judgments,

injunctions, orders or decrees which would not, individually or in the aggregate, have a Material Adverse Effect on TMB.

(q)

Material Suppliers and Customers . Except as disclosed in section 3.1(q) of the TMB Disclosure Letter, there is no single supplier or customer of TMB or its Subsidiaries, the loss of which would have a Material Adverse Effect on TMB. TMB has disclosed in section 3.1(q) of the TMB Disclosure Letter a list of TMB’s principal suppliers together with those principal customers of TMB, each of which represents in excess of 5% of TMB’s gross revenues during the nine month period ended September 30, 2006.

(r)

Intellectual Property .

(i)

Section 3.1(r) of the TMB Disclosure Letter sets out a list of all Intellectual Property licences (other than "shrinkwrap" licences) held by TMB and its Subsidiaries. Except as set forth in section 3.1(r) of the TMB Disclosure Letter, TMB or a TMB Subsidiary owns or has the right to use pursuant to valid license, sublicense, contract or permission all Intellectual Property necessary for its operations as currently conducted. Except as set forth in section 3.1(r) of the TMB Disclosure Letter, each item of Intellectual Property owned or used by TMB or a TMB Subsidiary immediately prior to the Closing will continue to be owned or available for use by TMB and Parent on identical terms and conditions immediately subsequent to the Closing. Except as set out in section 3.1(r) of the TMB Disclosure Letter, the execution, delivery and performance of this Agreement, and the consummation of the transactions contemplated hereby and thereby, will not (A) constitute a breach of any instrument or contract governing any Intellectual Property, (B) cause the forfeiture or termination or give rise to a right of forfeiture or termination of any Intellectual Property, or (C) impair the right of TMB or Parent or their respective Subsidiaries to use, sell or license any Intellectual Property or portion thereof.

(ii)

Except as set out in section 3.1(r) of the TMB Disclosure Letter, neither TMB nor any TMB Subsidiary has interfered with, infringed upon, misappropriated or otherwise come into conflict with any Intellectual Property rights of any third party. Neither the provision of any service nor the manufacture, marketing, license, sale or use of any product or technology currently licensed or sold by TMB or any TMB Subsidiary violates any license or contract between TMB or such TMB Subsidiary and any third party, or infringes or misappropriates any third party intellectual property rights. Neither TMB nor any TMB Subsidiary has received any charge, complaint, claim, demand or notice alleging any such interference, infringement, misappropriation or violation (including any claim that TMB or a TMB Subsidiary must license or refrain from using any Intellectual Property rights of any third party). To the knowledge of TMB, no third party has interfered with, infringed upon, misappropriated or otherwise come into conflict with any Intellectual Property rights of

TMB or any TMB Subsidiary. Except as set forth at Section 3.1(q) of the TMB Disclosure Letter, neither TMB nor any TMB Subsidiary has licensed or permitted any third party to exploit any of the Intellectual Property (other than contracts entered into in the ordinary course of business).

(iii)

Section 3.1(r) of the TMB Disclosure Letter identifies each patent, copyright, trade-mark or registration of any Intellectual Property owned by TMB or any TMB Subsidiary or for which an application filed by TMB or any TMB Subsidiary is pending, and identifies all material unregistered Intellectual Property. Section 3.1(r) of the TMB Disclosure Letter also identifies each license, sublicense, contract or permission pursuant to which TMB or any TMB Subsidiary uses any item of Intellectual Property (other than contracts entered into in the ordinary course of business).

(iv)

Except as set out in section 3.1(r) of the TMB Disclosure Letter, TMB and each of its Subsidiaries have secured valid written assignments from all of their employees, and valid written assignments from all of the consultants of TMB and its Subsidiaries that contributed to the creation or development of TMB’s Intellectual Property.

(v)

To the knowledge of TMB, each of TMB and its Subsidiaries has taken all commercially reasonable steps to protect and preserve the confidentiality of all confidential information.

(vi)

Each of TMB and its Subsidiaries has a policy requiring each employee, consultant and independent contractor to execute proprietary information and confidentiality agreements on acceptable terms to TMB, which agreements have been made available to Parent.

(s)

Insurance . TMB has policies of insurance in force as of the date hereof naming TMB as an insured which, having regard to the nature of such risk and the relative cost of obtaining insurance, TMB believes are reasonable. Each of TMB and its Subsidiaries is, and has been continuously since January 1, 2006, insured by reputable and financially responsible insurers in amounts as set forth in section 3.1(s) of the TMB Disclosure Letter. The insurance policies of TMB and its Subsidiaries are in all material respects in full force and effect in accordance with their terms, no notice of cancellation or termination has been received and there is no existing default or event which, with the giving of notice or lapse of time or both would constitute a default thereunder. TMB has not received notice of any fact, condition or circumstance which might reasonably form the basis of any claim against TMB or any of its Subsidiaries which is not fully covered by insurance (subject to standard deductibles) maintained by it and which would have a Material Adverse Effect on TMB. A schedule of all insurance policies currently in effect is set forth in section 3.1(s) of the TMB Disclosure Letter.

(t)

Property . Except as disclosed in section 3.1(t) of the TMB Disclosure Letter, TMB and each of its Subsidiaries have good and sufficient title to the real

property interests including, fee simple estate of and in real property, leases, easements, rights of way, permits or licences from land owners or authorities permitting the use of land by TMB or such Subsidiary, necessary to permit the operation of its businesses as currently owned and conducted except for such failure of title that would individually or in the aggregate not have a Material Adverse Effect on TMB. TMB has disclosed in section 3.1(t) of the TMB Disclosure Letter particulars of all real property either owned or leased.

(u)

Licences, Etc . Except as disclosed in section 3.1(u) of the TMB Disclosure Letter, TMB and each TMB Subsidiary owns, possesses, or has obtained and is in compliance, in all material respects, with, all licences, permits, certificates, orders, grants and other authorizations (collectively "Licences") of or from any Governmental Entity necessary to conduct its businesses as now conducted or as proposed to be conducted by TMB as of the date hereof. TMB has disclosed in section 3.1(u) of the TMB Disclosure Letter particulars of all such Licences.

(v)

Brokers. No broker, finder or investment banker (other than Leerink Swann & Company and Westwind Partners Inc.) is entitled to any brokerage, finder’s or other fee or commission in connection with the Arrangement based on arrangements made by or on behalf of TMB. The fees and commissions payable to Leerink Swann & Company and Westwind Partners Inc. are set forth in section 3.1(v) of the TMB Disclosure Letter.

(w)

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

(x)

Receivables, Customer, Suppliers. All existing accounts receivable of TMB and its Subsidiaries represent valid obligations of customers of TMB and its Subsidiaries arising from bona fide transactions entered into in the ordinary course of business. Neither TMB nor any of its Subsidiaries has received any notice or other communication (in writing or otherwise), or received any other information, indicating that any customer or other Person identified in section 3.1(q) of the TMB Disclosure Letter may cease dealing with TMB or its Subsidiaries or may otherwise materially reduce the volume of business transacted by such Person with TMB or its Subsidiaries below historical levels. Section 3.1(x) of the TMB Disclosure Letter sets out an accounts receivable aging list and an accounts payable list, each to a date within 5 days of the date of this Agreement.

(y)

No Undisclosed Liabilities. Except as set forth in section 3.1(y) of the TMB Disclosure Letter, TMB and its Subsidiaries have no liabilities of any nature (whether absolute, accrued, contingent, determined, determinable, choate, inchoate or otherwise), except for (i) liabilities reflected or reserved against in the financial statements referred to in section 3.1(g), (ii) liabilities that are not required by generally accepted accounting principles to be reflected or reserved against in the financial statements referred to in section 3.1(g) or (iii) current

liabilities incurred in the ordinary course of business, consistent with past practice, since December 31, 2005.

(z)

Contracts; No Defaults.

(i)

Section 3.1(z) of the TMB Disclosure Letter lists, and TMB has delivered or made available to Parent copies of, each contract and other instrument or document (including any amendment to any of the foregoing);

(A)

evidencing, governing or relating to indebtedness for borrowed money;

(B)

not entered into in the ordinary course of business that involves expenditures or receipts in excess of $100,000;

(C)

that in any way purports to restrict the business activity of TMB or any of its Subsidiaries or to limit the freedom of TMB or any of its Subsidiaries to engage in any line of business or to compete with any Person or in any geographic area or to hire or retain any Person;

(D)

relating to the acquisition, transfer, development, sharing or license of any TMB Intellectual Property (except for any contract pursuant to which (I) any TMB Intellectual Property is licensed to TMB or any of its Subsidiaries under any third party software license generally available to the public, or (II) any TMB Intellectual Property is licensed by TMB or any of its Subsidiaries to any Person on a non exclusive basis);

(E)

providing for indemnification of any officer, director, employee or agent;

(F)

incorporating or relating to any guaranty, any warranty or any indemnity or similar obligation, other than with respect to customer contracts executed in the ordinary course of business;

(G)

relating to any currency hedging;

(H)

imposing any confidentiality obligation on TMB or its Subsidiaries or any other Person, or containing "standstill" or similar provisions, except for (i) any such agreements entered into in the ordinary course of business, and (ii) any such agreements related to the strategic alternatives process announced by TMB on November 13, 2006, in respect of which TMB has only provided a copy of the form of agreement used and disclosed the number of parties which executed agreements substantially in that form;

(I)

to which any Governmental Entity is a party or under which any Governmental Entity has any rights or obligations, or directly or

indirectly benefiting any Governmental Entity (including any subcontract or other contract between TMB or any of its Subsidiaries and any contractor or subcontractor to any Governmental Entity);

(J)

requiring that TMB or any of its Subsidiaries give any notice or provide any information to any Person prior to considering or accepting any TMB Acquisition Proposal or similar proposal, or prior to entering into any discussions, agreement, arrangement or understanding relating to any TMB Acquisition Proposal or similar transaction; and

(K)

contemplating or involving the payment or delivery of cash or other consideration in an amount or having a value in excess of $200,000 per annum in the aggregate, or contemplating or involving the performance of services having a value in excess of $200,000 per annum in the aggregate.

Each of the foregoing is a "Material Contract."

(ii)

Each Material Contract is valid and in full force and effect, and is enforceable in accordance with its terms.

(iii)

Except as set forth in section 3.1(z) of the TMB Disclosure