STOCK PURCHASE AGREEMENT

Exhibit 2.1

EXECUTION VERSION

STOCK PURCHASE AGREEMENT

by and between

THE STANLEY WORKS

and

VERICHIP CORPORATION

dated as of

May 15, 2008

TABLE OF CONTENTS

		Page
ARTICLE I PURCHASE AND SALE OF SHARES			2
Section 1.1 Sale and Transfer of Shares			2
Section 1.2 Consideration; Purchase Price			2
ARTICLE II THE CLOSING			2
Section 2.1 The Closing			2
Section 2.2 Post-Closing Adjustment			3
Section 2.3 Canadian Withholding Tax			5
ARTICLE III REPRESENTATIONS AND WARRANTIES OF SELLER			7
Section 3.1 Organization			7
Section 3.2 Authorization			7
Section 3.3 Execution; Validity of Agreement			8
Section 3.4 Consents and Approvals; No Violations			8
Section 3.5 Ownership of Shares			9
Section 3.6 Capitalization			9
Section 3.7 Subsidiaries			9
Section 3.8 Financial Statements			9
Section 3.9 Absence of Certain Changes			10
Section 3.10 Property and Assets			10
Section 3.11 Leases, Contracts and Commitments			10
Section 3.12 Suppliers and Customers			11
Section 3.13 Commercial Relationships with Governmental Entities			11
Section 3.14 Ethical Practices			11
Section 3.15 Product and Service Warranties			12
Section 3.16 Insurance			12
Section 3.17 Litigation; Other Proceedings			12
Section 3.18 Environmental Matters			12
Section 3.19 Compliance with Laws			13
Section 3.20 Employee Benefit Plans			14
Section 3.21 Tax Matters			15
Section 3.22 Intellectual Property			17
Section 3.23 Information Technology			19
Section 3.24 Labor Matters.			20
Section 3.25 Brokers or Finders			22
Section 3.26 Affiliate Transactions			22
Section 3.27 Information Supplied			22
Section 3.28 Separation; Excluded Liabilities			23
Section 3.29 Solvency			23
Section 3.30 Opinion of Financial Advisor			23
Section 3.31 Private Issuer			23
Section 3.32 Investment Canada Act			23
Section 3.33 Competition Act			24
Section 3.34 Privacy Laws			24

TABLE OF CONTENTS
(continued)

		Page
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PURCHASER			24
Section 4.1 Organization			24
Section 4.2 Authorization; Validity of Agreement			24
Section 4.3 Consents and Approvals; No Violations			24
Section 4.4 Litigation			25
Section 4.5 Brokers or Finders			25
Section 4.6 Financing			25
Section 4.7 Accredited Investor			25
Section 4.8 No Other Representations and Warranties			25
ARTICLE V COVENANTS OF SELLER AND PURCHASER			26
Section 5.1 Interim Operations of the Company			26
Section 5.2 Access			28
Section 5.3 Preparation of the Proxy Statement; Stockholders Meeting			29
Section 5.4 No Solicitation			29
Section 5.5 Certain Pre-Closing Actions			33
Section 5.6 Indebtedness			33
Section 5.7 Efforts and Actions to Cause Closing to Occur			34
Section 5.8 Tax Matters			36
Section 5.9 Publicity			40
Section 5.10 Transition Services			40
Section 5.11 Intercompany Arrangements			40
Section 5.12 Maintenance of Books and Records			40
Section 5.13 Insurance Policies			41
Section 5.14 Bank Accounts			41
Section 5.15 Notices of Certain Events			41
Section 5.16 Further Assurances			41
Section 5.17 Change in Control Payments			42
Section 5.18 Confidentiality			42
Section 5.19 Non-competition and Non-solicitation			43
Section 5.20 Antitakeover Statutes			66
ARTICLE VI CONDITIONS			43
Section 6.1 Conditions to Each Party’s Obligation to Effect the Closing			43
Section 6.2 Conditions to Obligations of Purchaser to Effect the Closing			44
Section 6.3 Conditions to Obligations of Seller to Effect the Closing			44
ARTICLE VII TERMINATION			45
Section 7.1 Termination			45
Section 7.2 Effect of Termination			46
Section 7.3 Termination Fee			47
ARTICLE VIII INDEMNIFICATION			47
Section 8.1 Indemnification; Remedies			47

TABLE OF CONTENTS
(continued)

		Page
Section 8.2 Notice of Claim; Defense			50
Section 8.3 Reductions for Insurance Proceeds and Other Recoveries			51
Section 8.4 No Duplication			52
Section 8.5 Rights Under Escrow Agreement			52
ARTICLE IX DEFINITIONS AND INTERPRETATION			52
Section 9.1 Definitions			52
Section 9.2 Interpretation			62
ARTICLE X MISCELLANEOUS			62
Section 10.1 Representations and Warranties			62
Section 10.2 Fees and Expenses			63
Section 10.3 Amendment and Modification			63
Section 10.4 Notices			63
Section 10.5 Counterparts; Facsimile			64
Section 10.6 Entire Agreement; No Third Party Beneficiaries			64
Section 10.7 Severability			64
Section 10.8 Governing Law			65
Section 10.9 Jurisdiction			65
Section 10.10 Time of Essence			65
Section 10.11 Extension; Waiver			65
Section 10.12 Assignment			65
Section 10.13 Preservation of Obligations			66
Section 10.14 Specific Performance			66
Exhibits
Exhibit A Form of Escrow Agreement
Exhibit B Form of Director Resignation and Release
Exhibit C Net Tangible Asset Value
Exhibit D Guarantee by Parent, executed and dated as of the date of this Agreement
Exhibit E Voting Agreement by Parent for the benefit of Purchaser, executed and dated as of the date of this Agreement
Exhibit F Voting Agreement by Scott R. Silverman for the benefit of Purchaser, executed and dated as of the date of this Agreement
Exhibit G Noncompete Agreement
Exhibit H Form of Section 116 Escrow Agreement

STOCK PURCHASE AGREEMENT

          Stock Purchase Agreement, dated as of May 15, 2008, by and between The Stanley Works, a Connecticut corporation (“ Purchaser ”) and VeriChip Corporation, a Delaware corporation (“ Seller ”). Certain capitalized terms used in this Agreement have the meanings assigned to them in Article IX.

          WHEREAS, Seller is the holder of all the capital stock of Xmark Corporation, a corporation governed under the laws of Canada (the “ Company ”);

          WHEREAS, the Company is engaged in the Business;

          WHEREAS, Seller wishes to sell, and Purchaser wishes to acquire, all of the outstanding capital stock of the Company, which consists exclusively of the Shares, upon the terms and subject to the conditions set forth herein;

          WHEREAS, Seller does not intend to transfer, directly or indirectly, to Purchaser, and Purchaser does not intend to be the transferee of or otherwise assume, any liabilities of any kind, whether known or unknown, accrued or contingent, relating to any operations of Seller, any of its Subsidiaries or the Company (including without limitation any liabilities relating to any operations of the Implantable Chip Business or the Toolhound Business) other than the Business;

          WHEREAS, the Board of Directors of Seller has unanimously approved and adopted, and recommends that the stockholders of Seller approve and adopt, this Agreement and transactions contemplated hereby, upon the terms and subject to the conditions set forth herein;

          WHEREAS, concurrently with the execution of this Agreement, and as a condition and inducement to Purchaser’s willingness to enter into this Agreement, Applied Digital Solutions, Inc., doing business as Digital Angel (“ Parent ”), which holds 48.6% of Seller Shares, has executed and delivered to Purchaser (a) a guarantee (the “ Guarantee ”) in favor of Purchaser, in the form of Exhibit D , with respect to Seller’s obligations under Article VIII of this Agreement and (b) a voting agreement (the “ Parent Voting Agreement ”), attached hereto as Exhibit E , obligating Parent to, among other things, vote in favor of the approval of this Agreement and the transactions contemplated hereby, upon the terms and subject to the conditions set forth therein;

          WHEREAS, concurrently with the execution of this Agreement, and as a condition and inducement to Purchaser’s willingness to enter into this Agreement, Scott R. Silverman (the “ Voting Stockholder ”), who owns 5.0% of Seller Shares, has executed and delivered to Purchaser a voting agreement attached hereto as Exhibit F (the “ Stockholder Voting Agreement ” and, together with the Parent Voting Agreement, the “ Voting Agreements ”), obligating such Person to, among other things, vote in favor of the approval of this Agreement and the transactions contemplated hereby, upon the terms and subject to the conditions set forth therein.

          WHEREAS, concurrently with the execution of this Agreement, and as a condition and inducement to Purchaser’s willingness to enter into this Agreement, Parent and Purchaser are entering into the Noncompete Agreement attached hereto as Exhibit G;

          NOW, THEREFORE, in consideration of the foregoing and the mutual representations, warranties, covenants and agreements set forth herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and intending to be legally bound hereby, the parties hereto agree as follows:

ARTICLE I
PURCHASE AND SALE OF SHARES

          Section 1.1 Sale and Transfer of Shares . Subject to the terms and conditions of this Agreement, at the Closing, Seller shall sell, convey, assign, transfer and deliver to Purchaser all of the issued and outstanding Shares, free and clear of all Encumbrances, and Purchaser shall, or shall cause its designated Subsidiary to, purchase, acquire and accept the Shares from Seller.

          Section 1.2 Consideration; Purchase Price . (a) As consideration for the Shares and the covenants and undertakings contained herein, Purchaser shall pay to Seller, in the manner described herein, an amount in cash (the “ Purchase Price ”) equal to (i) at the Closing, $45,000,000 (the “ Transaction Value ”), plus (ii) the Aggregate Adjustment as finally determined pursuant to and at the time provided under Section 2.2. For purposes of this Agreement, “ Aggregate Adjustment ” means the amount (which may be a positive or a negative number) equal to the sum of: (x) an amount (the “ Net Tangible Asset Value Adjustment ”) (which may be a positive or negative number) obtained by subtracting $4,700,000 from the Net Tangible Asset Value as of the Closing Date (the “ Closing Net Tangible Asset Value ”) as finally determined pursuant to Section 2.2 plus (y) the Net Indebtedness as of the Closing Date (the “ Closing Date Net Indebtedness ”) (which may be a positive or negative number) as finally determined pursuant to Section 2.2. Notwithstanding anything herein to the contrary, any amounts included in the Net Tangible Asset Value cannot be included in the Closing Date Net Indebtedness and vice versa.

               (b) At least four Business Days prior to the anticipated Closing Date, Seller shall deliver to Purchaser Seller’s good faith estimate, together with reasonable supporting detail, of (i) the Net Tangible Asset Value Adjustment (the “ Estimated Net Tangible Asset Value Adjustment ”), (ii) the Closing Date Net Indebtedness (the “ Estimated Closing Date Net Indebtedness ”) and (iii) the Aggregate Adjustment (the “ Estimated Aggregate Adjustment ”). The “ Base Purchase Price ” is equal to (i) the Transaction Value, plus (ii) the Estimated Aggregate Adjustment.

ARTICLE II
THE CLOSING

     Section 2.1 The Closing . (a) The closing of the sale and transfer of the Shares by Seller to Purchaser (the “Closing”) shall take place at the offices of Seller at 10:00 am (New York City time), not later than four Business Days following the satisfaction or waiver of all

conditions set forth in Article VI (other than those conditions that are to be satisfied at Closing, but subject to the waiver or fulfillment of those conditions), unless another date or place is agreed in writing by each of the parties hereto.

          (b) At the Closing, Purchaser shall:

                    (i) deliver an amount equal to the Base Purchase Price minus the Escrow Amount by wire transfer of immediately available U.S. funds to a an account(s) specified in writing by Seller at least four Business Days prior to the Closing Date;

                    (ii) deposit a cash amount equal to 10% of the Transaction Value (the “ Escrow Amount ”) in an escrow account (the “ Escrow Account ”), to be retained and distributed by Citibank, N.A. (or such other Person as is mutually agreed by Seller and Purchaser), as escrow agent (the “ Escrow Agent ”), pursuant to the terms of this Agreement and an escrow agreement substantially in the form attached hereto as Exhibit A (the “ Escrow Agreement ”);

                    (iii) deliver to Seller the certificate specified in Section 6.3(c); and

                    (iv) deliver to Seller a copy of each of the Escrow Agreement and the Section 116 Escrow Agreement duly executed by Purchaser.

          (c) At the Closing, Seller shall:

                    (i) deliver to Purchaser, or its Subsidiary designated in writing by Purchaser, one or more certificates representing all the Shares, each such certificate to be duly and validly endorsed in favor of Purchaser or accompanied by a separate stock power duly and validly executed by Seller and otherwise sufficient to vest in Purchaser legal and beneficial ownership of such Shares, free and clear of all Encumbrances;

                    (ii) deliver to Purchaser duly executed resignations and releases from the directors of the Company, effective as of the Closing, in the form attached hereto as Exhibit B ;

                    (iii) deliver to Purchaser the certificate specified in Section 6.2(c);

                    (iv) deliver to Purchaser a copy of each of the Escrow Agreement and the Section 116 Escrow Agreement duly executed by Seller; and

                    (v) deliver to Purchaser the executed payoff letters, UCC-3 termination statements, and other documents referred to in Section 5.6(a).

      Section 2.2 Post-Closing Adjustment .

               (a) Within 60 calendar days following Closing, Seller will deliver to Purchaser a consolidated balance sheet of the Company as of the Closing Date (the “ Closing Date Balance Sheet ”), and a certificate (the “ Closing Certificate ”), together with reasonable supporting detail, setting forth Seller’s calculation of (i) Closing Date Net Indebtedness, (ii) the Net Tangible Asset Value Adjustment and (iii) the Aggregate Adjustment derived from the Closing Date Balance Sheet and including appropriate adjustments to assure that the Closing Date Net Indebtedness and the Net Tangible Asset Value Adjustment are determined consistent with the definitions of such terms in this Agreement. Subject to Exhibit C and the defined terms in this Agreement, the Closing Date Balance Sheet and the Closing Certificate shall be prepared in accordance with U.S. GAAP. Purchaser will provide Seller and its accountants reasonable access to the books and records and personnel of the Company during the period of the preparation of the Closing Date Balance Sheet and Closing Certificate and the resolution of any disputes that may arise under this Section 2.2.

               (b) Purchaser shall have 120 calendar days following receipt of the Closing Certificate to deliver to Seller a written notice (a “ Notice of Dispute ”) that Purchaser disputes Seller’s calculation of any of the amounts or any portion of the amounts set forth therein, which Notice of Dispute shall set forth in reasonable detail the basis for each element of such dispute. If Purchaser does not deliver a Notice of Dispute on or before the expiration of such 120-day period (or if Purchaser notifies Seller in writing that there is no such dispute), the calculations of the Closing Date Net Indebtedness, the Net Tangible Asset Value Adjustment, and the Aggregate Adjustment set forth in the Closing Certificate shall be deemed to be final, binding and conclusive as to the parties. In the event that Purchaser delivers a Notice of Dispute with respect to only certain of the amounts or certain portions of the amounts set forth in the Closing Certificate but not others, then any undisputed amount or portion thereof shall be deemed to be final, binding and conclusive as to the parties. In the event Purchaser delivers a Notice of Dispute to Seller, Purchaser and Seller shall cooperate in good faith to resolve any such dispute as promptly as possible.

               (c) In the event that Purchaser and Seller are unable to resolve all such disputes on or before the 30 ^th calendar day following the delivery of the Notice of Dispute, then Purchaser and Seller shall retain a partner at Deloitte & Touche LLP to resolve such dispute, or if no partner at Deloitte & Touche LLP is willing and able to take on such assignment, a mutually acceptable third party firm, the retention of which will not give rise to present or potential future auditor independence problems for any party or any of their respective Affiliates as determined in each party’s reasonable discretion (Deloitte & Touche LLP or such firm being referred to as the “ Accounting Arbitrator ”). The Accounting Arbitrator may only resolve disagreements as to matters covered by the Notice of Dispute. All matters not covered by the Notice of Dispute shall be deemed to be final, binding and conclusive. The determination by the Accounting Arbitrator shall be final, binding and conclusive on Seller and Purchaser. Purchaser and Seller each shall promptly provide their assertions regarding the Aggregate Adjustment in writing to the Accounting Arbitrator and to each other. The Accounting Arbitrator shall consider only those items and amounts which are identified in the Notice of Dispute as being items which Seller and Purchaser are unable to resolve. The Accounting Arbitrator’s determination will be based solely on the definitions of Closing Date Net Indebtedness, Closing Net Tangible Asset Value and Aggregate Adjustment contained in this Agreement and Exhibit C . Further, the Accounting

Arbitrator’s determination shall be based solely on the presentations by Purchaser and Seller which are in accordance with the terms and procedures set forth in this Agreement (i.e., not on the basis of an independent review). The fees, costs and expenses of the Accounting Arbitrator shall be borne one half by Purchaser and one half by Seller; provided that if the Accounting Arbitrator determines that one party’s position is completely correct, then such party shall pay none of the fees, costs and expenses of the Accounting Arbitrator and the other party shall pay all such fees, costs and expenses. The Accounting Arbitrator shall be instructed to render its determination as soon as reasonably possible (which the parties agree should not be later than 60 calendar days following the day on which the disagreement is referred to the Accounting Arbitrator). The Accounting Arbitrator shall conduct its determination activities in a manner wherein all materials submitted to it are held in confidence and shall not be disclosed to third parties. The parties agree that judgment may be entered upon the determination of the Accounting Arbitrator in any court having jurisdiction over the party against which such determination is to be enforced.

               (d) Within five (5) Business Days after the Aggregate Adjustment shall have become final, binding and conclusive in all respects, in accordance with this Section 2.2, (i) if the Purchase Price exceeds the Base Purchase Price, Purchaser shall deliver to Seller such excess, or (ii) if the Base Purchase Price exceeds the Purchase Price, Seller shall deliver to Purchaser such excess.

               (e) All payments under Section 2.2(e) shall be made by wire transfer of immediately available funds to an account specified in writing by the receiving party, and such wire transfer shall include, in addition to the amount specified in Section 2.2(e), an amount equal to interest accrued on such amount at the annual Prime Rate as announced by JPMorgan Chase on the Closing Date (compounded quarterly) for the period from the Closing Date through the date of payment.

          Section 2.3 Canadian Withholding Tax . Notwithstanding any other provisions hereof, the following provisions shall apply with respect to the Purchase Price:

               (a) Seller shall make commercially reasonable efforts to obtain and deliver to Purchaser at or before the Closing a certificate issued by the Minister of National Revenue under subsection 116(2) of the ITA.

               (b) If a certificate is so delivered to Purchaser, Purchaser shall be entitled to withhold from the Purchase Price payable at the Closing twenty-five percent (25%) of the amount, if any, by which the Purchase Price exceeds the certificate limit as defined in subsection 116(2) of the ITA and specified by the Minister of National Revenue in such certificate, and Purchaser will pay any such withheld amount to the Escrow Agent on the Closing Date and the amount so paid will be credited to Purchaser as payment on account of a portion of the Purchase Price.

               (c) If a certificate is not so delivered, Purchaser shall be entitled to withhold from the Purchase Price payable at the Closing an amount equal to twenty-five percent (25%) of the Purchase Price, and Purchaser will pay any such withheld amount to the Escrow

Agent on the Closing Date and the amount so paid will be credited to Purchaser as payment on account of a portion of the Purchase Price.

               (d) The Escrow Agent will invest, on behalf of Seller, the withheld amount in one or more investments, the interest on which is not subject to Canadian withholding Tax under Part XIII of the Tax Act, from the Closing Date until the earlier of the date on which such withheld amount (or relevant portion thereof) is delivered to the Seller or remitted to the Canada Revenue Agency (“CRA”) in accordance with this Section. Where Purchaser has withheld any amount under Section 2.3(b) or (c) and Seller delivers to Purchaser, after Closing and not later than twenty-seven (27) days after the end of the month in which Purchaser (or an Affiliate of Purchaser, as the case may be) acquired the Shares (the “ Remittance Deadline ”), a certificate issued by the Minister of National Revenue under either subsection 116(2) or 116(4) of the ITA, the Escrow Agent:

               (i) shall, in the case of a certificate issued by the Minister of National Revenue under subsection 116(2) of the ITA, remit forthwith to the Receiver General for Canada twenty-five percent (25%) of the amount, if any, by which the Purchase Price exceeds the certificate limit fixed in such certificate; and

               (ii) shall pay forthwith to Seller any amount that Purchaser has withheld and is not required to pay to the Receiver General for Canada in accordance with subparagraph (i) above and/or Section 2.3(i) below and any interest earned on such amount to the date of such payment.

               (e) Where Purchaser has withheld any amount under Section 2.3(b) or (c) and no certificate has been delivered to Purchaser by Seller on or before the Remittance Deadline in accordance with Section 2.3(d), subject to Section 2.3(g), such amount shall be remitted by the Escrow Agent to the Receiver General for Canada in accordance with section 116 of the ITA.

               (f) The Escrow Agent shall not remit the amounts referred to in Section 2.3(e) before the day after the Remittance Deadline.

               (g) Where Purchaser has withheld any amount under Section 2.3(c) and no certificate has been delivered to Purchaser by Seller on or before the Remittance Deadline in accordance with Section 2.3(d), no amount shall be remitted by the Escrow Agent to the Receiver General for Canada if Seller delivers to Purchaser, on or before the Remittance Deadline, a comfort letter issued by the CRA in form and substance reasonably satisfactory to Purchaser extending the time period under which Purchaser is required to remit an amount in respect of the Purchase Price on behalf of Seller without being subject to interest and penalties, provided that in any such case, Seller shall indemnify Purchaser for any tax, interest, penalty or other amount payable by Purchaser as a result of Purchaser’s reliance on such comfort letter.

               (h) Where Purchaser has withheld any amount under this Section 2.3 (the “ Withheld Amount ”) and Seller has delivered to Purchaser a comfort letter as described in Section 2.3(g), the Escrow Agent shall continue to withhold such amount until, either (i) the

Escrow Agent pays such amount to Seller, which shall occur upon delivery to Purchaser of a certificate issued by the Minister of National Revenue under either (A) subsection 116(2) of the ITA, except that the Escrow Agent shall withhold and remit to the Receiver General for Canada the amount, if any, by which the Withheld Amount exceeds twenty-five percent (25%) of the certificate limit, or (B) subsection 116(4) of the ITA; or (ii) the Escrow Agent remits such amount to the Receiver General for Canada for the account of Seller if notified to do so by the CRA.

               (i) Any amount paid by Purchaser or the Escrow Agent to the Receiver General for Canada under Section 2.3(d), (e), or (h) on account of tax (not including amounts in relation to penalties or interest) shall be treated for purposes of this Agreement as a payment to Seller on account of the Purchase Price upon delivery to Seller of confirmation from the CRA that such remittance was made on Seller’s behalf.

               (j) For purposes of this Section 2.3, any certificate delivered to Purchaser shall be deemed not to have been delivered unless such certificate is reasonably satisfactory to Purchaser.

               (k) Any amounts withheld under this Section 2.3 shall be converted into Canadian dollars on the date of withholding and, for the avoidance of doubt, any amount released to Seller under the terms hereof including any payment of interest pursuant to Section 2.3(d) or remitted to the Receiver General for Canada shall also be denominated in Canadian dollars.

               (l) The provisions of this Section 2.3 shall apply, mutatis mutandis to any portion of the Purchase Price paid or payable at any time after the Closing.

               (m) Where Purchaser assigns the right to purchase the Shares to an Affiliate of Purchaser, Purchaser shall so notify Seller, and Seller shall notify the CRA that such Affiliate of Purchaser, and not Purchaser, is the purchaser of the Shares. In the event Purchaser assigns the right to purchase the Shares to an Affiliate of Purchaser, the provisions of this Section 2.3 shall apply as if the references to Purchaser were references to such Affiliate of Purchaser.

               (n) Purchaser and Seller agree to enter into an escrow agreement in the form attached hereto as Exhibit H (the “ Section 116 Escrow Agreement ”) with the Escrow Agent to provide for the remittance to, holding and release by the Escrow Agent of the amounts referred to in this section.

ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER

          Subject to Section 10.1(a) and except as set forth in the corresponding numbered section of the Disclosure Schedule (provided, however, that a matter disclosed with respect to one representation or warranty shall also be deemed to be disclosed with respect to each other representation or warranty to which the matter disclosed reasonably relates, to the extent such

relationship is readily apparent on the face of the disclosure contained in the Disclosure Schedule), Seller represents and warrants to Purchaser as follows:

          Section 3.1 Organization . Each of Seller and the Company (a) is a corporation or other legal entity duly organized, validly existing and, if applicable, in good standing under the laws of its jurisdiction of organization; (b) has all requisite corporate or other legal entity power and authority to carry on its business and the Business as they are now being conducted and to own the properties and assets that such Person now owns or that are used in the Business; and (c) is duly qualified or licensed to do business in every jurisdiction in which such qualification is required. Seller has heretofore delivered to Purchaser complete and correct copies of the articles of amalgamation and by-laws of the Company as presently in effect.

          Section 3.2 Authorization .

               (a) Seller has the requisite corporate power and authority to execute, deliver and perform this Agreement and, subject to receipt of Stockholder Approval, to consummate the Closing. The execution, delivery and performance by Seller of this Agreement and the consummation by Seller of the Closing have been duly authorized by the Board of Directors of Seller, and no other corporate action on the part of Seller is necessary to authorize the execution, delivery and performance by Seller of this Agreement or the consummation by Seller of the Closing, subject in the case of the consummation by Seller of the Closing to obtaining the Stockholder Approval.

               (b) Seller’s Board of Directors, at a meeting duly called and held, has unanimously (i) approved and adopted this Agreement and approved the transactions contemplated hereby, (ii) determined that the transactions contemplated hereby are advisable, fair to, and in the best interests of Seller and its stockholders, and (iii) resolved to submit this Agreement to the stockholders of Seller for approval, file the Proxy Statement with the SEC and, subject to Section 5.4 hereof, recommend that the stockholders of Seller approve and adopt this Agreement.

               (c) Seller’s Board of Directors has approved the Voting Agreements and taken all necessary action so that neither Section 203 of the Delaware General Corporation Law nor any “fair price,” “moratorium,” “control share acquisition” or other anti-takeover Law shall be applicable to this Agreement, the Voting Agreements or the transactions contemplated hereby or thereby and so that Purchaser will not be an “interested stockholder” (as such term is used in Section 203 of the Delaware General Corporation Law) with respect to Seller.

               (d) The affirmative vote (in person or by proxy) of the holders of at least a majority of the outstanding shares of common stock of Seller at the Stockholders Meeting, or any adjournment or postponement thereof, in favor of the approval of this Agreement and the transactions contemplated hereby (the “ Stockholder Approval ”) is the only vote or approval of the holders of any class or series of capital stock of Seller or any of its Subsidiaries that is necessary to approve this Agreement, approve the transactions contemplated hereby, and perform and consummate the transactions contemplated by this Agreement.

          Section 3.3 Execution; Validity of Agreement . This Agreement has been duly executed and delivered by Seller, and, assuming due and valid authorization, execution and delivery hereof by Purchaser, is a valid and binding obligation of Seller, enforceable against Seller in accordance with its terms, except that (i) such enforcement may be subject to applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or other similar Law, now or hereafter in effect, relating to or limiting creditors’ rights generally and (ii) equitable remedies of specific performance and injunctive and other forms of equitable relief may be subject to equitable defenses and to the discretion of the court before which any proceeding therefor may be brought.

          Section 3.4 Consents and Approvals; No Violations . Except for the filing and mailing by Seller with the SEC of a proxy statement relating to the Stockholders Meeting (as amended or supplemented from time to time, the “ Proxy Statement ”), and the receipt of Stockholder Approval, and other filings required under, and other applicable requirements of, the Exchange Act and the rules and regulations promulgated thereunder, and the NASDAQ rules, and except for filings, permits, authorizations, consents and approvals as may be required under, and other applicable requirements of, state securities or blue sky laws, the HSR Act and the Investment Canada Act, none of the execution, delivery or performance of this Agreement by Seller or the consummation by Seller of the Closing or the execution, delivery or performance by Parent or the Voting Stockholder of the Voting Agreements or by Parent of the Guarantee will (a) conflict with or result in any breach of any provision of the amended and restated certificate of incorporation or amended and restated by-laws of Seller or any organizational document of the Company, (b) require any filing with or notice by Seller or the Company to, or the issuance or provision to Seller or the Company of, any permit, authorization, consent or approval of, any Governmental Entity, (c) result in a violation or breach of, or constitute (with or without notice or lapse of time or both) a default (or give rise to any right of termination, cancellation or acceleration) or adverse modification of any terms or rights under, any of the terms, conditions or provisions of any note, bond, mortgage, indenture, lease, license, contract, agreement or other instrument or obligation (“ Contract ”) to which Seller, the Business, or the Company is a party or by which any of them or any of their respective properties, assets or rights may be bound, except for the consents obtained, to be obtained, or waived by Purchaser, in respect of Contracts set forth in Section 3.4 of the Disclosure Schedule , or (d) violate any statute, law, constitutional provision, code, regulation, ordinance, rule, ruling, judgment, decision, order, writ, injunction, decree, issued guidance or other requirement of any Government Entity (“ Law ”) applicable to Seller, the Company or any of their respective properties or assets.

          Section 3.5 Ownership of Shares . Except as set forth in Section 3.5 of the Disclosure Schedule , Seller is the record, legal and beneficial owner of all the issued and outstanding Shares, free and clear of all Encumbrances, except for any Encumbrances created by this Agreement.

          Section 3.6 Capitalization .

               (a) The issued and outstanding capital stock of the Company consists exclusively of the Shares. All the Shares are duly authorized, validly issued, fully paid and non-assessable. There are no options, rights or agreements to which any of Seller or the Company is

a party or by which any of them may be bound obligating any of them (a) to issue, deliver or sell, or refrain from issuing, delivering or selling, any shares of capital stock of the Company, or to grant, extend or enter into any such option, right or agreement, (b) to repurchase, redeem or otherwise acquire, or to refrain from repurchasing, redeeming or otherwise acquiring, any shares of capital stock of the Company, or to grant, extend or enter into any such option, right or agreement or (c) to vote, or to refrain from voting, any shares of capital stock of the Company.

               (b) As of the date hereof, the issued and outstanding capital stock of Seller consists exclusively of 11,016,877 shares of common stock, par value $0.01 (the “ Seller Shares ”). The aggregate voting power conveyed by the Voting Agreements to Purchaser shall be sufficient, by itself, to cause the Stockholder Approval at any stockholders meeting even if all other shares of capital stock of seller were voted against the Stockholder Approval.

          Section 3.7 Subsidiaries . The Company does not have any Subsidiaries, and the Company does not own, directly or indirectly, any capital stock or other ownership interests, or have any obligations to acquire any capital stock or other ownership interests or make any investment, in any corporation, partnership, joint venture or other Person.

          Section 3.8 Financial Statements . (a) True and complete copies of the Financial Statements are included in Section 3.8 of the Disclosure Schedule . The Financial Statements have been prepared in accordance with U.S. GAAP applied on a consistent basis and fairly present the financial position and the results of operations and cash flows of the Business as of the dates and for the periods referred to therein.

               (b) The Company does not have any liabilities or obligations of any nature, whether accrued, absolute, fixed, known or unknown, contingent, or otherwise, whether due or to become due and whether or not required to be recorded or reflected on a balance sheet under U.S. GAAP, other than (a) liabilities that are set forth in the Financial Statements, (b) liabilities (including Taxes) incurred in the ordinary course of business consistent with past practice since the Balance Sheet Date, (c) liabilities under contractual obligations to be performed after the date hereof under Contracts set forth in Section 3.11 of the Disclosure Schedule or other Contracts to the extent not required to be listed therein (but excluding any obligations or liabilities that arise in connection with any such Contracts as a result of any breach, default or tort on or prior to the Closing Date in connection with such Contracts), and (d) liabilities set forth in Section 3.8(b) of the Disclosure Schedule .

               (c) Following the Closing, all amounts deposited with the Royal Bank of Canada pursuant to the Blocked Accounts Agreement, dated February 29, 2008, among the Company, LV Administrative Services, Inc. and Royal Bank of Canada and the Cash Collateral Agreement, dated February 28, 2008, between the Company and Royal Bank of Canada will be, assuming termination of such agreements, available for distribution to Purchaser, but only to the extent that such amounts exceed the credit card charges secured by such deposited amounts.

          Section 3.9 Absence of Certain Changes . Except as set forth in Section 3.9 of the Disclosure Schedule , (a) since the Balance Sheet Date, there has not been any change, effect, event or circumstance that has had or would reasonably be expected to have a Material Adverse

Effect, and (b) since March 31, 2008, the Company has not taken action that, if taken after the date hereof, would require Purchaser’s consent under Section 5.1.

          Section 3.10 Property and Assets .

               (a) Seller and its Subsidiaries have not engaged in the Business other than through the Company. The Company has, or on the Closing Date will have, good title to, or a valid lease, license or right to use, all assets, properties and rights used in the conduct of the Business as it is currently conducted and as is necessary to permit it to be conducted consistent with past practice, free of any Encumbrances other than Permitted Encumbrances.

               (b) Except as set forth in Section 3.10(b) of the Disclosure Schedule , those real and other tangible properties purported to be owned by the Company are held free and clear of all Encumbrances other than (i) Encumbrances for Taxes not yet due and payable, (ii) mechanics’, materialmen’s, carriers’, warehousemen, workers’, repairers’, landlords’ and similar Encumbrances arising or incurred in the ordinary course of business consistent with past practice, (iii) zoning, entitlement, building and other land use regulations that are not violated by current occupancy or use, (iv) customary covenants, conditions, restrictions, easements and similar restrictions of record affecting title that do not impair current occupancy or use, (v) Encumbrances for Taxes that the Company is contesting in good faith, which are set forth in Section 3.10(b) of the Disclosure Schedule , and (vi) purchase money liens and liens securing rental payments under capital lease arrangements, provided that the underlying obligation is paid in the ordinary course of business consistent with past practice when due (clauses (i) through (vi) being “ Permitted Encumbrances ”). As of the date hereof, all tangible assets owned or leased by the Company are in satisfactory operating condition for the uses to which they are being put.

               (c)  Section 3.10(c) of the Disclosure Schedule sets forth a complete list of all Real Property and specifies which Real Property is owned and which is leased.

          Section 3.11 Leases, Contracts and Commitments . (a) Section 3.11(a) of the Disclosure Schedule sets forth a complete list as of the date hereof of Contracts to which the Company is a party (or by which the Business or any of the assets, properties or rights of the Company, or the Business is bound) and that (i) provides for or is reasonably likely to result in future payments by the Company or the Business, or to the Company or the Business, of more than $50,000 per annum (excluding purchase orders entered into or incurred in the ordinary course of business consistent with past practice); (ii) was entered into by the Company or the Business with Seller, any Affiliate of Seller (other than the Company) or with any officer or director of Seller or any Affiliate of Seller (including the Company) (other than such Contracts that were entered into before January 1, 2006 and are no longer in effect); (iii) is a partnership, limited liability company, joint venture or similar agreement, or pursuant to which the Company or the Business has an obligation to make an investment in or loan to any Person; (iv) under which the Company or the Business has created incurred, assumed, guaranteed or secured Indebtedness; (v) pursuant to which (A) payments were made by or to the Company or the Business during the twelve month period ended on the Balance Sheet Date in excess of $50,000, or (B) payments are reasonably anticipated by the Company or the Business, to be made by or to the Company or the Business during the twelve month period ending on the first anniversary of

the Balance Sheet date in excess of $50,000; (vi) contains outstanding obligations relating to the settlement of any Proceeding; (vii) is a collective bargaining agreement, License, IT Contract, or similar agreement; (viii) relates to the acquisition or disposition of any business, operations or division (whether by merger, sale of stock, sale of assets or otherwise) to the extent any unresolved claims or actual or contingent obligations of any party thereunder remain; (ix) restricts the Company or the Business (including any Contract that would restrict Purchaser or any of its Subsidiaries at any time from and after the Closing) from engaging in any business activity anywhere in the world or (x) relates to cash management (any such Contract, whether or not listed in Section 3.11(a) of the Disclosure Schedule , a “ Material Contract ”).

               (b) There is not and, to the Knowledge of Seller, there has not been claimed or alleged by any Person, with respect to any Material Contract, any existing default or event that, with notice or lapse of time or both, would constitute a default or event of default on the part of the Company or the Business or, to the Knowledge of Seller, on the part of any other party thereto. Each of the Material Contracts is in full force and effect and is valid and binding on the Company, and, to the Knowledge of Seller, each other party thereto.

          Section 3.12 Suppliers and Customers .

               (a)  Section 3.12(a) of the Disclosure Schedule sets forth the names of the 10 largest customers of the Company as of the date hereof (as measured by revenue for the twelve-month period ended on the Balance Sheet Date) (with each governmental agency counted as a separate and distinct customer) and the 10 largest suppliers of the Company as of the date hereof (as measured by aggregate cost of items or services purchased for the twelve-month period ended on the Balance Sheet Date) and specifies the percentage of the Company’s revenues or purchased goods and services, accounted for by each such customer or supplier during such period.

               (b) Except as set forth in Section 3.12(b) of the Disclosure Schedule , none of the Company or Seller (a) has been notified (x) of any dispute with any customer or supplier listed in Section 3.12(a) of the Disclosure Schedule or (y) by 10 or more customers or suppliers concerning any single issue or series of related issues that could reasonably be expected to have an adverse impact on the Company or (b) has been notified by any such customer or supplier that it intends or is threatening to terminate or otherwise adversely alter the terms of its business with Seller, any of its Subsidiaries or the Company, either as a result of the consummation of the transactions contemplated by this Agreement or otherwise.

          Section 3.13 Commercial Relationships with Governmental Entities . As of the date hereof, other than standard form non-exclusive licenses, the Company is not a party to a contract with any agency or department of any government (including any government-run or sponsored hospital).

          Section 3.14 Ethical Practices . Except as permitted under applicable Law, the Company has not offered or given anything of value to any official of a Governmental Entity, any political party or official thereof, or any candidate for political office (i) with the intent of inducing such Person to use such Person’s influence with any Governmental Entity to affect or

influence any act or decision of such Governmental Entity to assist the Company in obtaining or retaining business for, or with, or directing business to, any Person in contravention of any Law applicable to the Company, or (ii) constituting a bribe, kickback or illegal or improper payment to assist the Company in obtaining or retaining business for or with any Governmental Entity.

          Section 3.15 Product and Service Warranties . The Company (a) has not taken any action that has had or is reasonably likely to have, or failed to take any action the failure of which to take has had or would reasonably be expected to have, individually or in the aggregate, an adverse effect on (i) any express or implied manufacturer warranties of any products sold to it or (ii) any express or implied service warranties for any services provided by it and (b) does not provide a guaranty, warranty or other indemnity beyond the standard terms and conditions of sale set forth in Section 3.15 of the Disclosure Schedule , except (in the case of clause (b)) to the extent any warranties may be implied under applicable Law absent any express action by the Company.

          Section 3.16 Insurance . Section 3.16 of the Disclosure Schedule lists all insurance policies in effect as of the date hereof that provide coverage with respect to the business, or assets of the Company or the Business. No written notice of default, cancellation or termination has been received with respect to any such insurance policy, and to the Knowledge of Seller, no event has occurred that, with the lapse of time or the giving of notice or both, would constitute a default under any such insurance policy. There are no historical gaps in coverage with respect to any such policy, and no such limited of liability have been exhausted under any such policy.

          Section 3.17 Litigation; Other Proceedings . Except as set forth in Section 3.17 of the Disclosure Schedule , there is no Proceeding pending (or, to the Knowledge of Seller, threatened) (a) by, against or relating to the Company, the Business or any property or rights of the Company or the Business or (b) as of the date hereof, relating to this Agreement or any Related Document or any of the transactions contemplated hereby or thereby. Section 3.17 of the Disclosure Schedule sets forth a true, correct and complete list of all Proceedings resolved or settled from January 1, 2006 to the date hereof requiring payments by the Company in excess of $20,000. The Company is not subject to any outstanding order, writ, injunction or decree of any Governmental Entity (an “ Order ”). Each of the third, fourth and fifth items set forth in Section 3.17 of the Disclosure Schedule is currently covered by one or more of the insurance policies set forth in Section 3.16 of the Disclosure Schedule .

          Section 3.18 Environmental and Health and Safety Matters .

               (a) During the three years preceding the Closing Date, the Company has been and is in compliance with all applicable Environmental Laws.

               (b) During the three years preceding the Closing Date, the Company has maintained and has been and is in compliance with all approvals, authorizations, consents, licenses, waivers, variances, certificates or permits required for the Business pursuant to Environmental Laws and has timely filed all applications for their renewal.

               (c) There is no Proceeding pending (or, to the Knowledge of Seller, threatened) by, against or relating to the Company either (i) pursuant to Environmental Laws or (ii) arising from the Release or presence of or exposure to Hazardous Substances, whether on or off the property owned or operated by the Company.

               (d) There are no conditions or circumstances, including without limitation the Release or presence of or exposure to any Hazardous Substances, reasonably anticipated to result in liabilities or obligations to, or requirements for notification, investigation or remediation by, the Company pursuant to Environmental Laws.

               (e) To the Knowledge of Seller, no asbestos-containing materials, polychlorinated biphenyls, underground storage tank, or landfill, impoundment or other disposal area containing Hazardous Materials, is present at the property owned or operated by the Company.

               (f) All waste materials generated by the Company have been properly stored, transported, treated and disposed of in accordance with all applicable Environmental Laws.

               (g) Seller has provided to Purchaser all written environmental, health or safety assessments, audits, investigations, and sampling or similar reports directed to or obtained by the Company since January 1, 2005, including any documents relating to the Release or presence of or exposure to Hazardous Substances.

               (h) No Encumbrances pursuant to Environmental Laws have been or are imposed on the property owned or operated by the Company, and to the Knowledge of Seller, no such liens have been threatened.

               (i) For purposes of this Agreement:

                    (i) “ Environmental Laws ” means all Laws relating to: (i) protection, preservation or cleanup of the environment or natural resources; (ii) any Release or threatened Release, including, without limitation, control, investigation, study, assessment, testing, monitoring, containment, removal, remediation, cleanup or abatement of such Release or threatened Release; (iii) the management, manufacture, generation, formulation, processing, labeling, distribution, introduction into commerce, registration, use, treatment, handling, storage, disposal, transportation, re-use, recycling or reclamation of any Hazardous Substance, or (iv) health and safety.

                    (ii) “ Hazardous Substances ” means any substances, materials, wastes or agents that are designated as hazardous or toxic or subject to regulation or liability under Environmental Laws, including without limitation petroleum or any fraction thereof, asbestos, polychlorinated biphenyls, and mold.

                    (iii) “ Release ” means any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping, disposing, of any Hazardous Substances at, in, on, into or onto the environment,

     including, without limitation, the migration of any Hazardous Substances through or in the environment.

          Section 3.19 Compliance with Laws .

               (a) Each of the Business and the Company is in possession of all franchises, grants, authorizations, licenses, permits, easements, variances, exceptions, consents, certificates, approvals and orders (“ Permits ”) of any Governmental Entity that is necessary for it to carry on its business as it is now being conducted and is in compliance with the terms and requirements of all such Permits and no suspension or cancellation of any of the foregoing is pending or to the Knowledge of Seller, threatened. Since January 1, 2006, none of the Company or the Business (i) has been in violation of any applicable Law or (ii) has received written notice of any violation or alleged violation of any Law, except violations or alleged violations that have been resolved prior to the date hereof without any continuing obligation or liability of the Company.

               (b) Without limiting the generality of the foregoing, the manufacture, sale, marketing, and distribution of the Business Products are and have been in compliance, with all applicable Laws, including those related to use of radio frequency spectrums, customary manufacturing practices, labeling, advertising, record keeping, reporting of adverse events and filing of reports with applicable Governmental Entities. None of the Business Products have been recalled, withdrawn, suspended or discontinued (whether voluntarily or otherwise) since January 1, 2005. No Proceedings (whether completed or pending) seeking the recall, withdrawal, suspension or seizure of the Business Products or pre-market approvals or marketing authorizations relating to the Business Products are pending or, to the Knowledge of Seller, are threatened, against Seller or the Company, at any time since January 1, 2005.

No representation or warranty is made under this Section 3.19 with respect to compliance with Environmental Laws, which is covered by Section 3.18 .

          Section 3.20 Employee Benefit Plans . (a) Section 3.20(a) of the Disclosure Schedule contains a true and complete list of all Plans as of the date hereof. The Company has made available to Purchaser a true and complete copy of (i) each written Plan and all amendments thereto and each agreement creating or modifying any related trust or other funding vehicle, (ii) a written description of the material terms of each unwritten Plan; (iii) the most recent annual report with respect to each Plan (if any such report was required by applicable Law); (iv) the most recent summary plan description (or similar document) for each Plan; (v) the most recent determination letter received from the IRS with respect to each Plan, if applicable; (vi) the most recent available financial or actuarial report for each Plan, if applicable; and (vii) all material correspondence with any Governmental Entity regarding any Plan.

               (b) No Plan is a “multi-employer pension plan,” as defined in Section 3(37) of ERISA or under the provisions of any other applicable Law nor is any Plan subject to Section 302 or Title IV of ERISA or Section 412 of the Code. No liability under Title I or IV or Section 302 of ERISA, the penalty, excise tax or joint and several liability provisions of the Code or under any Law or regulation relating to the plans has been incurred by the Company or any

ERISA Affiliate. The PBGC has not instituted proceedings to terminate any Title IV Plan and no condition exists that presents a risk that such proceedings will be instituted.

               (c) No Plan is a “registered pension plan” as that term is defined in subsection 248(1) of the ITA.

               (d) None of the Plans provide, and the Company has no liability with respect to, any post-employment life or health insurance or other welfare benefits except as may be required by Section 4980B of the Code or other applicable Law.

               (e) Each Plan has been, to the extent applicable, established, registered, qualified, funded, invested, operated and administered in accordance with, and is in good standing under, its terms and applicable Law, including ERISA, the Code, the applicable Canada Pension Standards legislation and the ITA. To the Knowledge of Seller, there are no investigations by any Governmental Entity, termination proceedings or other claims (except routine claims for benefits payable under the Plans) against or involving any Plan or asserting any rights to or claims for benefits under any Plan. All contributions or premiums required by Law or by the terms of the Plan have been timely made. There are no taxes, penalties or fees owing or eligible under any of the Plans. All liabilities of the Company (whether accrued, absolute, contingent or otherwise) related to all Plans have been fully and accurately disclosed in accordance with U.S. GAAP in the Financial Statements and will be fully and accurately disclosed in the Closing Date Balance Sheet and no changes have occurred to any Plan or are reasonably expected to occur which could adversely affect the actuarial report related to such Plan, if any, or the Financial Statements.

               (f) No Plan is intended to be “qualified” within the meaning of Section 401(a) of the Code.

               (g) Except as listed on Section 3.20(g) if the Disclosure Schedule , neither the execution or delivery of this Agreement nor the consummation of the transactions contemplated by this Agreement will, either alone or in conjunction with any other event (whether contingent or otherwise) (i) result in any payment or benefit becoming due or payable or required to be provided, to any director, employee or independent contractor of the Company, (ii) increase the amount or value of any benefit or compensation otherwise payable or required to be provided to any such director, employee or independent contractor, (iii) result in the acceleration of the time of payment, vesting or funding of any such benefit or compensation or (iv) result in any amount failing to be deductible by reason of Section 280G of the Code.

               (h) All data reasonably necessary to administer each Plan has been provided to Purchaser and is true and correct, to the Knowledge of Seller. The Company may unilaterally amend, vary, revise, revoke, or terminate, in whole or in part, each Plan and take contribution holidays under or withdraw surplus from each Plan, subject only to approvals required by applicable Law and the terms of the Plans. Subject to obtaining any approvals under applicable Law, the Company may merge any Plan with any other arrangement, plan or fund and may transfer without restriction, the assets from any Plan to any other arrangement, plan or fund. There have been no withdrawals, applications or transfers of assets from any Plan or the trusts or

other funding medical relating thereto except in accordance with the terms of each Plan, applicable Law and all applicable agreements. None of the Company or, to the Knowledge of Seller, any of its agents or fiduciaries, has been in breach of any contractual or fiduciary obligation with respect to the administration of any Plan or the trusts or other funding media related thereto. No insurance policy or other contract or agreement affecting any Plan requires or permits a retroactive increase in premiums or payments due thereunder.

               (i) There exists no liability in connection with any former benefit plan relating to any employee or former employee of the Company or its beneficiaries that has terminated, and all procedures for termination of each such former benefit plan have been properly followed in accordance with the terms of such former benefit plans and applicable Law.

          Section 3.21 Tax Matters . (a) Each of the Company and each Company Predecessor has timely filed (or there have been filed on its behalf) with appropriate Governmental Entities all Tax Returns required to be filed by it on or prior to the date hereof, and such Tax Returns are correct in all material respects and all Taxes shown as due on such Tax Returns have been timely paid. No extension of time in which to file any such Tax Returns is currently in effect.

               (b) All Taxes of the Company and each Company Predecessor to the extent due and payable as of the date hereof have been timely paid except to the extent of amounts that are being contested in good faith appropriate proceedings or that are reserved for Tax liabilities in the Financial Statements.

               (c) There are no Encumbrances for Taxes upon any property or assets of the Company, except for Encumbrances for Taxes not yet due.

               (d) Except as set forth in Section 3.21(d) of the Disclosure Schedule , no federal, state, provincial, local or foreign audits, examinations, investigations, reassessments, or other administrative proceedings (such audits, examinations, investigations and other administrative proceedings referred to collectively as “ Audits ”) or court proceedings are presently pending or, to the Knowledge of Seller, being initiated or considered with regard to any Taxes or Tax Returns filed by or on behalf of the Company or a Company Predecessor, and there are no outstanding issues which have been raised and communicated to Seller or the Company by any Governmental Entity for any fiscal period in respect of which a Tax Return of the Company has been audited. Since April 1, 2005, no Governmental Entity has challenged or disputed a filing position taken by the Company or a Company Predecessor in any Tax Return. Neither Seller nor the Company is aware of any contingent liabilities for Taxes or any grounds for an assessment or reassessment of the Company, including unreported benefits conferred on any stockholder of the Company. Neither Seller nor the Company has received any indication from any Governmental Entity that an assessment or reassessment of the Company is proposed in respect of any Taxes, regardless of its merits.

               (e) There are no outstanding requests, agreements, consents or waivers to extend the statutory period of limitations applicable to the assessment of any Taxes or deficiencies against the Company.

               (f) There is no obligation of the Company to contribute to the payment of any Tax or any portion of a Tax (or any amount calculated with reference to any portion of a Tax) of any Person other than the Company, including as transferee or successor, by Contract or otherwise.

               (g) No claim has been made in writing by any authority in a jurisdiction where the Company does not file Tax Returns that the Company or a Company Predecessor is or may be subject to taxation by that jurisdiction.

               (h) The Company has not constituted either a “distributing corporation” or a “controlled corporation” within the meaning of Section 355(a)(1)(A) of the Code since January 1, 2006.

               (i) Prior to the date hereof, the Company has made available to Purchaser complete and accurate copies of all Tax Returns filed by the Company on or prior to the date hereof for all tax periods beginning on or after January 1, 2005.

               (j) Prior to the date hereof, the Company has made available to Purchaser complete and accurate copies of all audit reports, letter rulings, technical advice memoranda and similar documents received from any Governmental Entity since December 31, 2004 relating to the U.S. and Canadian federal, state, provincial, or local Taxes due from or with respect to the Company or a Company Predecessor.

               (k) Neither the Company nor any Company Predecessor has “participated” in a “listed transaction”, nor to the Knowledge of Seller, in “reportable transactions” (as those terms are defined in Treasury Regulation Section 1.6011-4(b)).

               (l) The Company has maintained and continues to maintain at its place of business in Canada all books and records required to be maintained under the ITA and any other applicable Law and any comparable Law of any province or territory in Canada, including Laws relating to sales and use taxes.

               (m) The Shares are not “taxable Québec property” for purposes of the Taxation Act (Québec).

               (n) Neither the Company nor any Company Predecessor has participated, directly or through a partnership, in a transaction or series of transactions contemplated in subsection 247(2) of the ITA or any comparable Law of any province or territory in Canada.

               (o) None of the Company, any Company Predecessor or the Business is party to or bound by any tax sharing agreement, tax indemnity obligation in favor of any Person or similar agreement in favor of any Person with respect to Taxes (including any advance pricing agreement or other similar agreement relating to Taxes with any Governmental Entity). Without limiting the generality of the foregoing, the Company has not entered into an agreement contemplated in section 80.04, section 191.3 or subsection 18(2.3), 127(13), 127(20) or 125(3) of the ITA or any comparable Law of any province or territory of Canada.

               (p) The Company has not claimed any reserves for purposes of the ITA (or for purposes of any analogous or comparable provincial, territorial or similar statute) for the most recent Tax year ending prior to the date hereof.

               (q) No circumstances exist which could result in the application to the Company of sections 78, 80 to 80.04 or 160 of the ITA or any analogous provision of any comparable Law of any province or territory of Canada.

               (r) All Canadian federal and provincial research and development investment tax credits claimed (and refunds received) by the Company or a Company Predecessor were claimed (and refunds received) by virtue of the Company or a Company Predecessor operating its business and all such tax credits were claimed (and refunds received) in accordance with the relevant rules and conditions under the ITA and applicable Canadian provincial or territorial legislation.

          Section 3.22 Intellectual Property .

               (a)  Section 3.22(a) of the Disclosure Schedule contains an accurate and complete list of the following Owned Intellectual Property as of the date hereof: (i) Patents; (ii) applications and registrations for Trademarks and all material unregistered Trademarks; (iii) Internet domain names; and (iv) applications and registrations for Copyrights and all material unregistered Copyrights, in each case listing, as applicable, (A) the title of the application or registration, (B) the name of the current owner, (C) the jurisdiction where the application/registration is located, (D) the application or registration number, and (E) the status of the application or registration, including deadlines for any renewals or other required filings required to be made in the next six-months after the date of this Agreement.

               (b) Except as set forth in Section 3.22(b) of the Disclosure Schedule , the Intellectual Property held under Licenses, together with the Owned Intellectual Property (collectively, the “ Company Intellectual Property ”), constitutes all of the Intellectual Property used or held for use in the conduct and operation of the Business of the Company as currently conducted and contemplated by Seller to be conducted, or necessary for the conduct and operation of the Business of the Company as currently conducted. Immediately following the Closing Date, no Intellectual Property relating to the Business will be owned by Seller.

               (c) The Company is the sole and exclusive owner of all right, title and interest in or has the valid right to use, the Company Intellectual Property, free and clear of all Encumbrances (other than Permitted Encumbrances) and the Company shall have such rights immediately after the Closing Date. The Company has not granted to any third party, by License or otherwise, any material right or interest in such Intellectual Property, other than non-exclusive licenses to customers of the Business Products that are software related, in the ordinary course of business consistent with past practice.

               (d) The conduct and operation of the Business as currently conducted and contemplated by Seller to be conducted, including the use of the Company Intellectual Property therein, does not, to the Knowledge of Seller, infringe upon, misappropriate, violate or

conflict in any way with any rights (including rights in Intellectual Property) held by any Person. The Company’s past or present devices and the Company’s past and current methods do not infringe any valid claim of U.S. Patent Nos. 7,274,294 and 7,365,645. The past and current configurations of the RoamAlert tags do not transmit a VLF signal (3 to 30 kHz). The battery status of a tag that is displayed by the past and current RoamAlert Pocket Tag Readers is not related to a time of installation or manufacture of the battery. The power level of the signal output of past and current RoamAlert Pocket Tag Readers is not adjustable. RoamAlert tags, according to the current configuration, that transmit a battery level (or status) either continuously or when the battery level is low (or becoming low) to a RoamAlert Pocket Tag Reader were on sale in the U.S. before January 25, 2004. RoamAlert Pocket Tag Readers that receive a battery level (or status) from a tag and display an indication of the battery status, according to the current configuration, were on sale in the U.S. before January 25, 2004. RoamAlert tags that store and transmit warranty dates, but do not determine tag battery status based on the warranty dates (i.e., tag battery status is based on battery voltage), were on sale in the U.S. before January 25, 2004. RoamAlert Pocket Tag Readers that display warranty dates, but do not determine tag battery status based on the warranty dates (i.e., tag battery status is based on battery voltage), were on sale in the U.S. before January 25, 2004. Past and current configurations of the RoamAlert Pocket Tag Readers are not essential to the operation of the past and current configurations of the RoamAlert system. The Company has not received any written demand, written claim or written notice with respect to the Company Intellectual Property which alleges that the Company infringes upon, misappropriates, violates or conflicts with the Intellectual Property rights of any Person or which challenges the ownership, validity or enforceability of any Company Intellectual Property. There is no pending or, to the Knowledge of Seller, threatened written assertion or written claim that the use or exploitation of any Company Intellectual Property by the Company or the conduct of the business of the Company or of the Business infringes upon, misappropriates, violates or conflicts with the rights of any Person. None of the Company Intellectual Property is subject to any outstanding order, judgment, decree or agreement adversely affecting the Company’s use thereof or rights thereto. The Company is not party to any Proceeding which involves a claim of infringement or misappropriation of any Intellectual Property of any third party or of any Company Intellectual Property.

               (e) Except as set forth in Section 3.22(e) of the Disclosure Schedule , to the Knowledge of Seller, (i) there are no unauthorized uses, disclosures, infringements or misappropriations of any Company Intellectual Property by any third party and (ii) there is not any fact or matter which would or may create any such unauthorized use, disclosure, infringement or misappropriation.

               (f) The Company has taken all commercially reasonable and appropriate steps to protect and preserve the rights in, and have complied with and are in compliance with all Laws (including marking requirements and payment of all applicable fees) with respect to, any Owned Intellectual Property that is issued, granted or registered by or with a Governmental Entity or for which an application therefor has been filed with any Governmental Entity, and all registrations for Owned Intellectual Property are valid, subsisting and enforceable and currently in good standing.

               (g) The Company has taken commercially reasonable steps to protect and preserve the rights in all unregistered Intellectual Property. All current and former employees, consultants and contractors of the Company who contribute or have contributed to the creation or development of any of the Company Intellectual Property have executed written instruments with the Company that assign all rights, title and interest in and to any such contributions that the Company does not already own by operation of law. Except as set forth in Section 3.22(g) of the Disclosure Schedule , no current employee, officer, director, stockholder, consultant or independent contractor, or to the Knowledge of Seller, no former employee, officer, director, stockholder, consultant or independent contractor, has any right, claim or interest in or with respect to any Owned Intellectual Property.

               (h) The Company is the licensee under the license agreements set forth in Section 3.22(h) of the Disclosure Schedule , which are all of the Licenses, except for (i) any IT Contracts (which are addressed in Section 3.23) and (ii) any license implied by the sale of a product, and there are no outstanding or, to the Knowledge of Seller, threatened disputes with respect to the Licenses. The Company has not granted a license to any Person to use any Intellectual Property other than non-exclusive licenses of Intellectual Property granted by the Company to customers in the ordinary course of business consistent with past practice.

               (i) No License or any grant of exclusivity contained therein may be unilaterally terminated or materially altered by any third party which is a party to such License as a result of the consummation of the transactions provided for herein. The Company is in compliance and is not in default under any License and, to the Knowledge of Seller, third parties to any such License are in compliance and not in default under any License.

               (j) Neither this Agreement nor the transaction contemplated hereunder will result in: (i) the Company or Purchaser granting to any third party any right to or with respect to any Intellectual Property owned by, or licensed to, the Company or Purchaser, or (ii) the Company or Purchaser being bound by, or subject to, any non-compete or other material restriction on the operation or scope of their respective businesses or of the Business.

               (k) The Company’s collection, storage, use and dissemination of information and data, whether proprietary or not, relating to customers, clients and patients of customers or end-users (“ Customer Information ”) and any personally identifiable information are and have been in compliance with all applicable Laws relating to privacy, data security and data protection, and all applicable privacy policies and terms of use or other contractual obligations. All use, exploitation and disclosure in connection with the Business of Customer Information or Trade Secrets owned by a third party has been pursuant to the terms of a license agreement or another written agreement with such third party, or is otherwise lawful. The Company has reasonable security and data protections in place, consistent with general industry practices, with respect to third-party Trade Secrets or Customer Information, and any personally identifiable information, and there has been no material breach thereof or loss of data.

          Section 3.23 Information Technology . (a) Section 3.23(a) of the Disclosure Schedule contains an accurate and complete list, as of the date of this Agreement, of all IT Systems and each Contract to which the Company is a party relating to any such IT Systems

pursuant to which the aggregate payments paid or payable by the Company with respect to such Contract exceeds $100,000 (each such Contract, an “ IT Contract ”). For purposes of this Agreement, “ IT Systems ” means electronic data processing, information, recordkeeping, communications, telecommunications, networking, account management, inventory management and other such applications, Computer Software, hardware, equipment and services (including all applications and software installed on all hardware and equipment), and all documentation related to the foregoing.

               (b) No Computer Software owned by the Company and, to the Knowledge of Seller, no other Computer Software included in Company Intellectual Property, incorporates, is comprised of or distributed with Computer Software subject to the provisions of any “open source” or third party license agreement that (i) requires the distribution of source code in connection with the distribution of such software in object code form; (ii) materially limits the Company’s freedom to seek full compensation in connection with marketing, licensing and distributing such software; or (iii) allows a customer or requires that a customer have the right to decompile, disassemble or otherwise reverse engineer the software by its terms and not by operation of law.

               (c) Each of the IT Systems: (i) is supported by a written Contract providing for appropriate maintenance and support and (ii) is subject to full and unrestricted access and use by the Company (and no third party agreement or consent is required to enable such access and use by the Company to continue after the Closing), (iii) is adequate in all material respects for their intended use and for the operation of the Business as currently conducted and contemplated to be conducted, and are in good working condition (normal wear and tear excepted), (iv) has not been subject to any material malfunction with respect to any such IT Systems that has not been remedied or replaced, (v) has not, to the Knowledge of Seller, been infected with any computer code or any other mechanisms which may: (A) disrupt, disable, erase or harm in any way such IT System’s operation, or cause such IT System to damage or corrupt any data, hardware, storage media, programs, equipment or communications, or (B) permit any third party to access such IT System without authorization, and (vi) has disaster recovery plans in place that are appropriate, in accordance with good industry practice, to minimize the disruption of business in the event of failure of the IT Systems, however arising.

          Section 3.24 Labor Matters .

               (a)  Section 3.24(a) of the Disclosure Schedule lists as of the date hereof (i) all the employees and (ii) the Persons who are receiving remuneration for work or services provided to the Company who are not employees as of the date of this Agreement, and for each, the position, status, length of service, location of employment, and compensation of each employee and the terms on which each other Person who is providing work or services to the Company is engaged. As of the date of this Agreement, no employee of the Company is on long-term disability leave, extended absence or receiving benefits pursuant to the Workplace Safety and Insurance Act, 1999 (Ontario). The employment of all of the employees is terminable on such notice as is required by Law, including common law notice, or pursuant to the terms of a written agreement of employment.

               (b) There is no labor strike, dispute, slowdown, stoppage or lockout actually pending, or to the Knowledge of Seller, threatened against the Company.

               (c) No employee of the Company is represented by a labor union or labor organization. None of the Company or the Business is a party to or bound by any collective bargaining agreement, labor contract, letter of understanding, letter of intent, voluntary recognition agreement or legally binding commitment or written communication with any labor organization, labor union, trade union or employee organization and there are no pending, or to the Knowledge of Seller, threatened representation campaigns, elections or proceedings concerning union representation involving any employee of the Company.

               (d) No labor union has been certified by the National Labor Relations Board as bargaining agent for any of the employees of the Company.

               (e) There is no unfair labor practice charge or complaint against the Company pending or to the Knowledge of Seller threatened before the National Labor Relations Board. The Company is in compliance with all applicable local, state, federal and foreign Laws relating to labor and employment, including but not limited to Laws relating to discrimination, disability, labor relations, hours of work, payment of wages and overtime wages, pay equity, immigration, workers compensation, working conditions, employee scheduling, family and medical leave, and employee terminations. Except as set forth in Section 3.24(e) of the Disclosure Schedule , there are no complaints, lawsuits, arbitrations, administrative proceedings, or other proceedings pending or, to the Knowledge of Seller, threatened against the Company brought by or on behalf of any applicant for employment, any current or former employee, any person alleging to be a current or former employee, any class of the foregoing, or any Governmental Entity, relating to any such Law or regulation, or alleging breach of any express or implied contract of employment, wrongful termination of employment, or alleging any other discriminatory, wrongful or tortious conduct in connection with the employment relationship. The Company is in compliance with the Workplace Safety and Insurance Act, 1997 (Ontario) and is not subject to any penalty assessments thereunder based upon a determination by the Workplace Safety and Insurance Board.

               (f) There are no outstanding orders made under the Occupational Health and Safety Act (Ontario) relating to the Company or the Business. The Company is operating in compliance with all occupational health and safety laws, including the Workplace Hazardous Materials Information System (WHMIS), in connection with the Business. There are no pending, or to the Knowledge of Seller, threatened charges against the Company under occupational health and safety laws relating to the Business. There have been no fatal or critical accidents which have occurred in the course of the operation of the Business which have resulted in or that are reasonably likely to result in charges under the Occupational Health and Safety Act (Ontario). The Company has complied in all respects with any orders issued under occupational health and safety laws.

               (g) Since the enactment of the WARN Act, the Company has not effectuated a “ plant closing ” (as defined in the WARN Act) affecting any site of employment or one or more facilities or operating units within any site of employment or facility of the

Company, and there has not occurred a “ mass layoff ” (as defined in the WARN Act) affecting any site of employment or facility of the Company. Within the last six months, the Company has not incurred any liability or obligation which remains unsatisfied under the WARN Act or any other applicable Laws regarding the termination or layoff of employees.

               (h) Except as set forth on Section 3.24(h) of the Disclosure Schedule , none of the employees or independent contractors engaged by the Company in the year immediately prior to the date hereof has indicated to the Company that he, she or it intends to resign, retire or terminate his, her or its engagement with the Company as a result of the transactions contemplated by this Agreement or otherwise. To the Knowledge of Seller, none of the employees of the Company is in violation of any non-competition, non-solicitation, non-disclosure or any similar agreement with any third party.

          Section 3.25 Brokers or Finders . Other than Merriman Curhan Ford & Co., whose fees and expenses will be paid by Seller, no agent, broker, investment banker, financial advisor or other firm is or will be entitled to any brokers’ or finder’s fee or other commission or similar fee in connection with the transactions contemplated by this Agreement except for any agent, broker, investment banker, financial advisor or other firm or Person engaged by Purchaser.

          Section 3.26 Affiliate Transactions .

               (a) None of (i) Seller or Parent, (ii) any Affiliate of the Company, Seller or Parent (other than the Company) or (iii) any director or officer of (x) the Company, Seller or Parent or (y) any Affiliate of the Company, Seller or Parent (each of the foregoing, a “ Related Party ”) has any interest in any Contract with, or relating to, the Business, the Company or any of the properties, assets or rights of the Company or the Business, except for those listed in Section 3.26(a) of the Disclosure Schedule and for normal compensation for services as an officer, director or employee of the Company.

               (b)  Section 3.26(b) of the Disclosure Schedule lists all current and non-current payment obligations to the Company as to which the obligor is a Related Party (other than de minimis advances in the ordinary course of business consistent with past practice to employees who are neither officers nor directors of the Company, Parent or Seller or any of their respective Affiliates). Without limiting the generality of the foregoing, no Related Party has any obligation under any outstanding guarantee, letter of comfort, letter of assurance, keepwell, letter of credit, performance bond, assurance bond, surety agreement, indemnity agreement or any other form of assurance or guaranty (a “ Credit Support Obligation ”) in connection with the Business or the Company.

               (c)  Section 3.26(c) of the Disclosure Schedule lists all current and non-current payment obligations of the Company to any Related Party (other than (x) amounts owing to employees that arise under the terms of their employment and related ordinary course benefit plans of the Company that are listed in the Disclosure Schedule and (y) ordinary course expense reimbursements to employees and directors of the Company relating to the performance of their duties for the Company). Without limiting the generality of the foregoing, the Company

has no Credit Support Obligation in connection with any Related Parties or any of their respective businesses (other than the Business).

          Section 3.27 Information Supplied . The Proxy Statement will not, on the date it is first mailed to stockholders of Seller and at the time of the Stockholders Meeting, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading. The Proxy Statement will comply as to form with the applicable requirements of the Exchange Act. The representations and warranties contained in this Section 3.27 will not apply to statements or omissions included in the Proxy Statement based upon information furnished in writing to Seller by Purchaser specifically for use therein.

          Section 3.28 Separation; Excluded Liabilities .

               (a) The Business and the Company have at all times been operated separately from other businesses conducted by Seller. The Company and its predecessors have not, at any time, engaged in, managed, supervised, represented, held itself out to third parties or the public as conducting, or operated in any way the Implantable Chip Business.

          (b) Section 3.28(b) of the Disclosure Schedule sets forth a list and detailed description of each Excluded Liability for which the Company, as of the date hereof, has any liability of any kind or nature, whether primary, successor or secondary, and whether or not accrued, contingent or required to be recorded under U.S. GAAP. By the Closing Date, Seller shall have taken all necessary actions, including by transferring liabilities and obtaining releases, to cause all Excluded Liabilities to have ceased to be liabilities (of any kind or nature, whether primary, successor or secondary, and whether or not accrued, contingent or required to be recorded under U.S. GAAP) of the Company.

          Section 3.29 Solvency . Seller is (and, as of the Closing Date, immediately after giving effect to all of the transactions contemplated by this Agreement, including, without limitation, the payment of all related fees and expenses, will be) Solvent. For purposes of this Agreement, the term “ Solvent ” means that, as of any date of determination, (a) the amount of the fair saleable value of the assets of Seller and its Subsidiaries, taken as a whole, exceeds, as of such date, the sum of (i) the value of all liabilities of Seller and its Subsidiaries, taken as a whole, including contingent and other liabilities, as of such date, as such terms are generally determined in accordance with the applicable federal Laws governing determinations of the solvency of debtors, and (ii) the amount that will be required to pay the probable liabilities of Seller and its Subsidiaries, taken as a whole, on its existing debts and obligations (including contingent liabilities) as such debts and obligations mature; (b) Seller will not have, as of such date, an unreasonably small amount of capital for the operation of the business in which it is engaged or proposed to be engaged by Seller following such date; and (c) Seller will be able to pay its liabilities, including contingent and other liabilities, as they mature.

          Section 3.30 Opinion of Financial Advisor. The financial advisor of Seller, Merriman Curhan Ford & Co., has delivered to Seller an opinion dated the date of this

Agreement to the effect that, as of such date, the Purchase Price is fair to Seller from a financial point of view.

          Section 3.31 Private Issuer . The Company is a “private issuer” within the meaning of National Instrument 45-106 Prospectus and Registration Exemptions adopted by the Canadian Securities Administrators.

          Section 3.32 Investment Canada Act . The Company (a) is not engaged in the production of uranium and does not own an interest in a producing uranium property in Canada, (b) does not provide any “financial service”, as defined under Part IV of the Investment Canada Act (Canada), (c) does not provide any “transportation service”, as defined in the Investment Canada Regulations (SOR/85-611), and (d) is not a “cultural business”, as defined under Part IV of the Investment Canada Act (Canada).

          Section 3.33 Competition Act . For the purposes of Section 110 of the Competition Act, the aggregate value of the assets in Canada and the gross revenues generated from sales in/or from Canada, of the Company and its Subsidiaries (within the meaning of the Competition Act) is not greater than Cdn$50 million and Cdn$50 million per annum, respectively, in accordance with the Notifiable Transactions Regulations (SOR/87-348).

          Section 3.34 Privacy Laws .

               (a) The Company has complied at all times in all material respects with all Privacy Laws in connection with the collection, use and disclosure of Personal Information by the Company; and all Personal Information has been collected, used and disclosed with the consent of each individual to whom such Personal Information relates and has been used only for the purposes for which it was initially collected.

               (b) The Company has had in place since March 31, 2005 a privacy policy governing the collection, use and disclosure of Personal Information by the Company and has collected, used and disclosed Personal Information in accordance with such policy.

ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASER

          Subject to Section 10.1(b), Purchaser represents and warrants to Seller that:

          Section 4.1 Organization . Purchaser is a corporation duly organized, validly existing and in good standing under the laws of Connecticut, (b) has all requisite corporate or other legal entity power and authority to carry on its business as it is now being conducted and to own the properties and assets it now owns and (c) is duly qualified or licensed to do business in every jurisdiction in which such qualification is required.

          Section 4.2 Authorization; Validity of Agreement . Purchaser has the requisite corporate power and authority to execute, deliver and perform this Agreement and to consummate the Closing. The execution, delivery and performance by Purchaser of this Agreement and the consummation by Purchaser of the Closing have been duly authorized by the

Board of Directors of Purchaser, and no other corporate action on the part of Purchaser is necessary to authorize the execution, delivery and performance by Purchaser of this Agreement or the consummation by Purchaser of the Closing. This Agreement has been duly executed and delivered by Purchaser, and, assuming due and valid authorization, execution and delivery hereof by Seller, is a valid and binding obligation of Purchaser, enforceable against Purchaser in accordance with its terms, except that (i) such enforcement may be subject to applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or other similar Law, now or hereafter in effect, relating to or limiting creditors’ rights generally and (ii) equitable remedies of specific performance and injunctive and other forms of equitable relief may be subject to equitable defenses and to the discretion of the court before which any proceeding therefor may be brought.

     Section 4.3 Consents and Approvals; No Violations . Except for filings required under, and other applicable requirements of, the Exchange Act and the rules and regulations promulgated thereunder, and the NASDAQ rules, and except for filings, permits, authorizations, consents and approvals as may be required under, and other applicable requirements of, state securities or blue sky laws, the HSR Act and the Investment Canada Act, none of the execution, delivery or performance of this Agreement by Purchaser or the consummation by Purchaser of the Closing will (a) conflict with or result in any breach of any provision of the certificate of incorporation or by-laws or similar organizational document of Purchaser, (b) require any filing with or notice to, or permit, authorization, consent or approval of, any Governmental Entity, (c) result in a violation or breach of, or constitute (with or without notice or lapse of time or both) a default (or give rise to any right of termination, cancellation or acceleration) or any adverse modification of any terms or rights under, any of the terms, conditions or provisions of any Contract to which Purchaser or any of its Subsidiaries is a party or by which any of them or any of their respective properties, assets or rights may be bound or (d) violate any Law applicable to Purchaser, any of its Subsidiaries or any of their respective properties or assets.

     Section 4.4 Litigation . As of the date hereof, there is no Proceeding pending or, to the Knowledge of Purchaser, threatened against Purchaser or any of its Affiliates relating to Seller, the Company, this Agreement or any Related Document or any of the transactions contemplated hereby or thereby.

     Section 4.5 Brokers or Finders . Neither Purchaser nor any of its Subsidiaries or its Affiliates has entered into any agreement or arrangement entitling any agent, broker, investment banker, financial advisor or other firm or Person to any broker’s or finder’s fee or any other commission or similar fee in connection with any of the transactions contemplated by this Agreement.

     Section 4.6 Financing . Purchaser has sufficient funds to enable it to consummate the transactions contemplated by this Agreement.

     Section 4.7 Accredited Investor . Purchaser is an “accredited investor” within the meaning of the National Investment 45-106 Prospectus and Registration Exemptions adopted by the Canadian Securities Administrators.

     Section 4.8 No Other Representations and Warranties . Purchaser acknowledges and agrees that Seller makes no representations or warranties other than as set forth in this Agreement, the Related Documents to which it is or will be a party, and any certificates or documents delivered pursuant to a requirement of hereto or thereto; provided that nothing herein or therein shall limit or prejudice any claim or action by Purchaser for fraud.

ARTICLE V
COVENANTS OF SELLER AND PURCHASER

     Section 5.1 Interim Operations of the Company . Except as expressly contemplated by this Agreement, during the period from the date of this Agreement to the Closing, Seller will cause the Company to conduct its operations according