SHARE PURCHASE AGREEMENT

Exhibit 2.1

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MERGER AGREEMENT

BY AND AMONG

MERGE TECHNOLOGIES INCORPORATED,

ADI ACQUISITION CORP.,

ACCUIMAGE DIAGNOSTICS CORP.

AND

THE PRINCIPAL SHAREHOLDER OF ACCUIMAGE DIAGNOSTICS CORPORATION

NOVEMBER 24, 2004

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7.2 CONDITIONS TO OBLIGATION OF THE COMPANY AND ITS SHAREHOLDERS. 49

8.3 INDEMNIFICATION PROVISIONS FOR BENEFIT OF THE COMPANY 51

1

EXHIBITS

SCHEDULES

Internal Controls Over Financial Reporting........................................ Schedule 3.33

2

MERGER AGREEMENT

THIS MERGER AGREEMENT (the “AGREEMENT”) is made and entered into as of the 24th day November, 2004 by and among MERGE TECHNOLOGIES INCORPORATED, a Wisconsin corporation (“MERGE”), ADI ACQUISITION CORP., a Nevada corporation (“ACQUISITION SUB”), ACCUIMAGE DIAGNOSTICS CORP., a Nevada corporation (together with its subsidiaries and predecessors, the “COMPANY”), and AVIEL FALIKS (“PRINCIPAL SHAREHOLDER”).

RECITALS

A. The Company is presently engaged in the business of development, marketing and support of software for the visualization, analysis and management of medical imaging data whose primary function is to enhance physicians’ interpretation of data from medical imaging modalities such as computed tomography (“CT”), magnetic resonance (“MR”) and ultrasound through the application of three-dimensional (“3D”) computer graphics and image processing technologies (collectively the “Business”).

B. The respective boards of directors of each of MERGE, ACQUISITION SUB, and the COMPANY have determined that the merger of Acquisition Sub with into the Company (the “Merger”) upon the terms and subject to the conditions set forth in this Agreement is advisable and have approved the Merger.

C. The Principal Shareholder owns 34,050,000 Shares of the Company on the date hereof and has entered in a Voting, Proxy and Option Agreement with Merge on the date hereof (the “Voting Agreement”) approving the Merger and the transactions contemplated by this Agreement, subject to the conditions set forth in the Voting Agreement.

D. The parties desire to make certain representations, warranties, covenants and agreements as set forth in this Agreement.

NOW, THEREFORE, in consideration of the mutual agreements contained herein and for other good and valuable consideration, the value, receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

SECTION 1. DEFINITIONS

For purposes of this Agreement, the following terms have the meanings set forth below:

“ACQUISITION PROPOSAL” means any offer or proposal made by a Person other than Merge or Acquisition Sub concerning any (a) merger, consolidation, business combination or similar transaction involving the Company or any subsidiary of the Company pursuant to which the stockholders of the Company immediately prior to such transaction would own less than 85% of the aggregate voting power of the entity surviving or resulting from such transaction (or the ultimate parent entity thereof), (b) sale, exclusive license or other disposition, directly or indirectly, of assets of the Company or its subsidiaries representing 15% or more of the consolidated assets of the Company and its subsidiaries; (c) issuance, sale or other disposition of securities (or rights to purchase, or instruments convertible into, or exchangeable for, such securities) by the Company representing 15% or more of the voting power of the Company; or (d) transaction in which any Person or group shall acquire beneficial ownership (as defined in Rule 13d-3 under the Exchange Act), or the right to acquire beneficial ownership of 15% or more of the outstanding capital stock of the Company.

“AFFILIATE” has the meaning set forth in Rule 12b-2 of the regulations promulgated under the Securities Exchange Act of 1934, as amended.

“AFFILIATED GROUP” means any affiliated group within the meaning of Section 1504(a) of the Code or any similar provision of state, local

or foreign Law.

“AGREEMENT” means this Merger Agreement, as the same may be amended from time to time in accordance with the terms hereof.

“ANCILLARY AGREEMENTS” means the Voting Agreement, the Escrow Agreement, the Consulting Agreement, and any Employment Agreement to be signed at Closing by an employee of the Company and Merge or any Affiliate of Merge or a Principal Shareholder.

“CODE” means the Internal Revenue Code of 1986, as amended.

“COMPANY” means AccuImage Diagnostics Corporation, a Nevada corporation, its subsidiaries and its predecessors.

“CONSULTING AGREEMENT’ means the Consulting Agreement in the form of EXHIBIT A between Merge and Principal Shareholder to be signed at Closing.

“CONTRACTS” means, collectively, all leases, licenses, agreements, purchase orders, indentures, contracts, commitments, bids and proposals, Plans, guarantees, letters of credit, bonds, notes, mortgages, indemnities, and all orders outstanding for the purchase or provision of materials, goods or services by the Company, in each case whether written or oral, including those listed on SCHEDULE 3.10, to which the Company is a party.

“EMPLOYEE PENSION BENEFIT PLAN” has the meaning set forth in Section 3(2) of ERISA.

“EMPLOYEE WELFARE BENEFIT PLAN” has the meaning set forth in Section 3(1) of ERISA.

“ENVIRONMENTAL, HEALTH, AND SAFETY LIABILITIES” means any cost, damages, expense, liability, obligation or other responsibility, including those of the foregoing which are latent, contingent or potential in nature, arising from or under any Environmental Law and consisting of or relating to:

(a) any environmental, health or safety matters or

conditions (including on-site or off-site
contamination, occupational safety and health, and
regulation of chemical substances or products);

(b) fines, penalties, judgments, awards, settlements, legal

or administrative proceedings, damages, losses, claims,
demands and response, investigative, remedial, or
inspection costs and expenses arising under any
Environmental Law;

(c) financial responsibility under any Environmental Law or any Law

related to occupational safety and health for cleanup
costs or corrective action, including any investigation,
cleanup, removal, containment or other remediation or
response actions required by any Environmental Law
(whether or not such action has been required or requested
by any Governmental Entity or any other Person) and for
any natural resource damages; or

(d) any other compliance, corrective, investigative, or

remedial measures required under any Environmental Law.

The terms “removal” and “remediation,” and “responsive action” include the types of activities covered by the United States Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. Section 9601 et. seq., as amended (“CERCLA”).

“ENVIRONMENTAL LAW” means any Law with respect to the preservation of the environment or the promotion of worker health and safety, including any Law relating to Hazardous Materials, drinking water, surface water, groundwater, wetlands, landfills, open dumps, storage tanks, underground storage tanks, solid waste, waste water, storm water run-off, noises, odors, air emissions, waste emissions or wells. Without limiting the generality of the foregoing, the term encompasses each of the following statutes and the regulations promulgated thereunder, and any similar applicable state, local or foreign Law, each as amended (a) CERCLA, (b) the Solid Waste Disposal Act, (c) the Hazardous Materials Transportation Act, (d) the Toxic Substances Control Act, (e) the Clean Water Act, (f) the Clean Air Act, (g) the Safe Drinking Water Act, (h) the National Environmental Policy Act of 1969, (i) the Superfund Amendments and Reauthorization Act of 1986, (j) Title III of the Superfund Amendments and Reauthorization Act, (k) the Federal Insecticide, Fungicide and Rodenticide Act and (l) the provisions of the Occupational Safety and Health Act of 1970 relating to the handling of and exposure to Hazardous Materials and similar substances.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

“ESCROW AGENT” means The Capital Trust Company of Delaware.

“ESCROW AGREEMENT’ means the Escrow Agreement among Merge, Principal Shareholder and the Escrow Agent, in substantially the form of EXHIBIT B to be signed prior to Closing.

“GAAP” means United States generally accepted accounting principles, as in effect as of the date of this Agreement.

“GOVERNMENTAL ENTITY” means any government or any agency, bureau, board, commission, court, department, official, political subdivision, tribunal or other instrumentality of any government, whether federal, state or local, domestic or foreign.

“HAZARDOUS ACTIVITY” means the distribution, generation, handling, importing, management, manufacturing, processing, production, refinement, Release, storage, transfer, transportation, treatment or use (including any withdrawal or other use of groundwater) of Hazardous Materials in, on, under, about or from the facilities or any part thereof into the environment, other than in ordinary use in compliance with Laws, and any other act, business, operation or thing that poses an unreasonable risk of harm to persons or property on or off the facilities, or that may affect the value of the facilities of the Company.

“HAZARDOUS MATERIALS” means each and every element, compound, chemical mixture, contaminant, pollutant, material, waste or other substance that is defined, determined or identified as hazardous or toxic under any Environmental Law or the Release of which is prohibited under any Environmental Law. Without limiting the generality of the foregoing, the term will include (a) “hazardous substances” as defined in CERCLA, the Superfund Amendments and Reauthorization Act of 1986, or Title III of the Superfund Amendments and Reauthorization Act and regulations promulgated thereunder, each as amended, (b) “hazardous waste” as defined in the Solid Waste Disposal Act and regulations promulgated thereunder, each as amended, ( c) “hazardous materials” as defined in the Hazardous Materials Transportation Act and the regulations promulgated thereunder, each as amended, (d) “chemical substance or mixture” as defined in the Toxic Substances Control Act and regulation promulgated thereunder, each as amended, (e) petroleum and petroleum products and byproducts and (f) asbestos.

“INTELLECTUAL PROPERTY” means, collectively, patents, patent disclosures, trademarks, service marks, trade dress, logos, trade names, copyrights and mask works, and all registrations, applications, reissuances, continuations, continuations-in-part, revisions, extensions, reexaminations and associated goodwill with respect to each of the foregoing, computer software (including source and object codes), computer programs, computer data bases and related documentation and materials, data, documentation, trade secrets, confidential business information (including ideas, formulas, compositions, inventions, know-how, manufacturing and production processes and techniques, research and development information, drawings, designs, plans, proposals and technical data, financial, marketing and business data and pricing and cost information) and other intellectual property rights (in whatever form or medium).

“IRS” means the Internal Revenue Service of the U.S. Department of the Treasury.

“LAW” means any constitutional provision, statute, law, rule, regulation, Permit, decree, injunction, judgment, order, ruling, determination, finding or writ of any Governmental Entity.

“LIEN” means any mortgage, pledge, security interest, charge, claim, suretyship, attachment, restriction or encumbrance, other than (a) mechanics’, materialmens’ and similar liens with respect to amounts not yet due and payable, (b) liens for Taxes not yet due and payable and (c) liens securing rental payments

under capital lease arrangements.

“NET ASSET VALUE” means total assets minus total liabilities of the Company determined in accordance with GAAP.

“ORGANIZATIONAL DOCUMENTS” means, collectively, (a) the articles or certificate of incorporation and the bylaws of a corporation; (b) any charter, operating agreement and similar documents adopted or filed in connection with the creation, formation or organization of a Person; and (c) any amendment to any of the foregoing.

“PBGC” means the Pension Benefit Guaranty Corporation.

“PERMIT” means any license, permit, franchise, certificate of

authority or order, or any waiver of the foregoing, issued by any Governmental
Entity.

“PLAN” means any written plan, fund, program, policy, payroll policy, contract or commitment, whether qualified or not qualified for federal income tax purposes, whether for the benefit of a single individual or more than one individual whether or not subject to ERISA, which is (a) an Employee Pension Benefit Plan, (b) an Employee Welfare Benefit Plan or (c) an incentive, bonus, employment, equity, retention, non-competition, deferred compensation, severance, change in control or ownership or other benefit compensatory plan, fund, program, policy, agreement, contract or commitment of the Company or any Affiliate of the Company for employees, former employees, directors, independent contractors, former independent contractors or their dependents or their beneficiaries.

“PERSON” means an individual, a partnership, a corporation, a limited liability company, an association, a joint stock company, a trust, a joint venture, an unincorporated organization or a Governmental Entity.

“PROHIBITED TRANSACTION” has the meaning set forth in Section 406 of ERISA and Section 4975 of the Code.

“REGULATORY AGENCY” means (i) the Securities and Exchange Commission, (ii) any self-regulatory organization (including NASDAQ), and (iii) any other federal, state or foreign governmental or regulatory agency or authority.

“RELATED PERSON” means with respect to a particular individual: (a) each other member of such individual’s Family; (b) any Person that is directly or indirectly controlled by such individual or one or more members of such individual’s Family; (c) any Person with respect to which such individual or one or more members of such individual’s Family serves as a director, officer, partner, executor, or trustee (or in a similar capacity). “RELATED PERSON” means, with respect to a specified Person other than an individual: (a) any Person that directly or indirectly controls, is directly or indirectly controlled by, or is directly or indirectly under common control with such specified Person; (b) any Person that holds a 5% or more voting or equity interest in such specified Person; (c) each Person that serves as a director, officer, partner, executor or trustee of such specified Person (or in a similar capacity); (d) any Person with respect to which such specified Person serves as a general partner or a trustee (or in a similar capacity); and (e) any related Person of any individual described in clause (b) or (c). For purposes of this definition, the “FAMILY” of an individual includes (i) the individual, (ii) the individual’s spouse and former spouses, (iii) any other natural person who is related to the individual or the individual’s spouse as a parent or descendant, and (iv) any other natural person who resides with such individual.

“RELEASE” means any spilling, leaking, emitting, discharging, depositing, escaping, leaching, dumping or other releasing into the environment, whether intentional or unintentional.

“SCHEDULES” means, collectively, the disclosure schedules attached to this Agreement, which are incorporated into the Agreement in their entirety and made a part thereof.

“SHARES” means all of the issued and outstanding voting and non-voting shares of capital stock of the Company.

“SHAREHOLDERS” means the owners of all the Shares of the Company.

“SUPERIOR PROPOSAL” means any bona fide written offer or proposal made by a Person other than Merge or Acquisition Sub that concerns any merger, consolidation, tender offer, exchange offer, asset acquisition (including by exclusive license), stock or other securities issuance, business combination or similar transaction involving the Company or any subsidiary of the Company that, if consummated, would result in a third party (or its stockholders) owning, directly or indirectly, a majority of the Shares then outstanding (or a majority of the voting power of the shares of capital stock of the surviving entity in a merger, or of the direct or indirect parent of the surviving entity in a merger) or a majority of the assets of the Company and its subsidiaries prior to such transaction, which the Board of Directors of the Company determines in good faith (after consultation with a recognized financial advisor) to be (i) more favorable to the stockholders of the Company from a financial point of view (taking into account probability of closing and all other terms and conditions of such proposal and this Agreement and any changes to the financial terms of this Agreement proposed by Merge in response to such offer or otherwise) than the Merger; and (ii) reasonably capable of being completed, taking into account all financial, legal regulatory and other aspects of the proposal, and the identity of the Person making the proposal.

“TAX RETURN” means any return, declaration, report, claim for refund or information return or statement relating to Taxes, including any schedule or attachment thereto.

“TAX” means any federal, state, local or foreign net income, gross income, gross receipts, sales, use, ad valorem, transfer, franchise, profits, license, lease, service, service use, withholding, payroll, employment, excise, severance, environmental, capital stock, social security, unemployment, disability, real property, personal property, registration, value added, alternative, add-on minimum, stamp, occupation, premium, windfall profits, customs, duties or other tax, fee, assessment or charge, including any interest, penalty or addition thereto.

“TRANSFER AGENT” means Pacific Stock Transfer Company, the Company’s current transfer agent for its Shares.

In addition, the following terms shall have the meanings ascribed to them in the section number opposite such term:

 

SECTION 2. THE MERGER; CLOSING; EFFECTIVE TIME

2.1. THE MERGER.

Upon the terms and subject to the conditions set forth in this Agreement, at the Effective Time (as defined in Section 2.3) Acquisition Sub shall be merged with and into the Company and the separate corporate existence of Acquisition Sub shall thereupon cease. The Company shall be the surviving corporation in the Merger (sometimes hereinafter referred to as the “Surviving Corporation”), and the separate corporate existence of the Company with all its rights, privileges, immunities, powers and franchises shall continue unaffected by the Merger. The Merger shall have the effects specified in the Nevada General Corporation Law (the “Nevada Statute”).

2.2 CLOSING .

The closing of the Merger (the “Closing”) shall take place (i) at the offices of Michael Best & Friedrich LLP, 100 E. Wisconsin Avenue, Milwaukee Wisconsin on the second business day after the day on which the last to be fulfilled or waived of the conditions set forth in Section 7 shall be satisfied or waived in accordance with this Agreement (other than those conditions that by their nature are to be satisfied at the Closing, but subject to the fulfillment or waiver of those conditions) or (ii) at such other place and time and/or on such other date as the Company and Merge may agree in writing (the “Closing Date”).

2.3 EFFECTIVE TIME .

As soon as practicable following the Closing on the Closing Date, the Company and Merge will cause a certificate of merger (the “Certificate of Merger”) to be executed, acknowledged and filed with the Secretary of State of the State of Nevada (the “Nevada Secretary”) as provided in Section 92A.200 of the Nevada Statute. As part of such filing, a plan of merger in form reasonably acceptable to Merge and the Company will be filed with the Nevada Secretary. The Merger shall become effective at the time the Certificate of Merger is duly filed with the Secretary of State of the State of Nevada (the “Effective Time”).

2.4 CHARTER AND BYLAWS.

The Certificate of Incorporation of Acquisition Sub as in effect immediately prior to the Effective Time shall be the certificate of incorporation of the Surviving Corporation (the “Charter”), until duly amended as provided therein or by applicable Law. The bylaws of Acquisition Sub as in effect immediately prior to the Effective Time shall be the bylaws of the Surviving Corporation (the “By-Laws”), until duly amended as provided therein or by applicable Law.

2.5. DIRECTORS AND OFFICERS.

The directors of Acquisition Sub at the Effective Time shall, from and after the Effective Time, be the directors of the Surviving Corporation until their successors have been duly elected or appointed and qualified or until their earlier death, resignation or removal in accordance with the Charter and the By-Laws. The officers of Acquisition Sub at the Effective Time shall, from and after the Effective Time, be the officers of the Surviving Corporation until their successors have been duly elected or appointed and qualified or until their earlier death, resignation or removal in accordance with the Charter and the By-Laws.

2.6 EFFECT OF THE MERGER ON SHARES.

(a) At the Effective Time, by virtue of the Merger and without any action on the part of the holder of any Shares of the Company, each Share issued and outstanding immediately prior to the Effective Time (other than “Excluded Shares” as defined below) shall be converted into the right to receive the proportionate share of Six Million Dollars ($6,000,000) which amount shall include the Holdback (as defined in Section 2.9) (the “Merger Consideration”).

Shares owned by Merge, Acquisition Sub or any other direct or indirect Subsidiary of Merge (collectively, the “Merge Companies”) or Shares that are owned by the Company or any direct or indirect subsidiary of the Company, and in each case not held on behalf of third parties, or Shares (“Dissenting Shares”) that are owned by shareholders (“Dissenting Shareholders”) who do not vote to approve the Merger and comply with all the provisions of the Nevada Statute concerning the right of holders of Shares to dissent from the Merger and require payment of fair value (as that term is used in the Nevada Statute) for their Shares shall be an “Excluded Share” and collectively, “Excluded Shares” for purposes of this Agreement. At the Effective Time, all Shares shall no longer be outstanding and shall be canceled and retired and shall cease to exist, and each certificate (a “Certificate”) formerly representing any of such Shares (other than Excluded Shares) shall thereafter represent only the right to receive the Merger Consideration.

The portion of the Merger Consideration due to each Shareholder on the Closing Date (other than Dissenting Shareholders) shall be his or her proportionate ownership of the outstanding Shares as of Closing.

(b) Dissenting Shares. Notwithstanding anything in this Agreement to the contrary, any Dissenting Shares shall not be converted as described in Section 2.6(a), but shall be converted into the right to receive such consideration as may be determined to be due to the respective Dissenting Shareholders pursuant to the Nevada Statute. If, after the Effective Time, any Dissenting Shareholder withdraws his demand or fails to perfect or otherwise loses his rights as a Dissenting Shareholder to payment of fair value, in any case pursuant to the Nevada Statute, his Shares shall be deemed to be converted as of the Effective Time into the right to receive his proportionate share of the Merger Consideration. The Company shall give Merge (i) prompt notice of any demands for fair value for Shares received by the Company and (ii) the opportunity to participate in and direct all negotiations and proceedings with respect to any such demands. The Company shall not, without the prior written consent of Merge, make any payment with respect to, or settle, offer to settle or otherwise negotiate, any such demands. Any amounts paid to the holders of Dissenting Shares in excess of their proportionate share of the Merger Consideration, and the costs of all proceedings, including attorneys’ and expert witness fees, in resolving the claim of any Dissenting Shareholder, shall be an amount to be indemnified under Section 8 or paid out of the Holdback, at the option of Merge

(c) Cancellation of Shares. Each Share issued and outstanding immediately prior to the Effective Time and owned by any of the Merge Companies or owned by the Company or any direct or indirect subsidiary of the Company (in each case other than Shares that are owned on behalf of third parties), shall, by virtue of the Merger and without any action on the part of the holder thereof, cease to be outstanding, shall be canceled and retired without payment of any consideration therefor and shall cease to exist.

(d) Acquisition Sub. At the Effective Time, each share of Common Stock, par value $.01 per share, of Acquisition Sub issued and outstanding immediately prior to the Effective Time shall be automatically converted into one share of common stock of the Surviving Corporation.

2.7 EXCHANGE OF SHARES FOR MERGER CONSIDERATION.

(a) Payment Procedures. At the Closing, Merge shall deliver to the Transfer Agent, for delivery to each of the Shareholders (other than holders of Excluded Shares) such Shareholder’s proportionate share of the Merger Consideration due at Closing in exchange for Shares being surrendered except that the Holdback shall be delivered by Merge to the Escrow Agent at Closing for deposit pursuant to the Escrow Agreement. Upon surrender of a Certificate (or affidavit of loss in lieu thereof) for cancellation to the Transfer Agent, the holder of such Certificate shall be entitled to receive in exchange therefor (after giving effect to any tax withholding required by Law) (i) a check in the amount of the holder’s proportionate share of the Merger Consideration based upon the number of Shares represented by such Certificate (or affidavit of loss in lieu thereof), and the Certificate so surrendered shall forthwith be canceled. No interest will be paid or accrued on any amount payable upon due surrender of the Certificates. In the event of a transfer of ownership of Shares that is not registered in the transfer records of the Transfer Agent, a check for any cash to be paid upon due surrender of the Certificate may be paid to such a transferee if the Certificate formerly representing such Shares is presented to the Transfer Agent, accompanied by all documents required by the Transfer Agent to evidence and effect such transfer and to evidence that any applicable stock transfer taxes have been paid or are not applicable.

(b) Transfers. After the Effective Time, there shall be no transfers on the stock transfer books regarding the Company of the Shares that were outstanding immediately prior to the Effective Time.

(c) Lost, Stolen or Destroyed Certificates. In the event any Certificates shall have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the Person claiming such Certificates to be lost, stolen or destroyed and execution of an indemnity agreement in form satisfactory to Merge and the Transfer Agent and further, if required by Merge or the Transfer Agent, the posting by such Person of a bond in customary amount as indemnity against any claim that may be made against it with respect to such Certificates, the Transfer Agent may issue in exchange for such lost, stolen or destroyed Certificates a check in the amount (after giving effect to any required tax withholdings) proportionate share of the Merger Consideration represented by such lost, stolen or destroyed Certificate deliverable in respect of, the Shares represented by such Certificates pursuant to this Agreement.

2.8 ADJUSTMENT FOR CLOSING BALANCE SHEET.

(a)  Adjustment . Merge shall be reimbursed by the amount that the Net Asset Value (as hereinafter defined) of the Company determined as of the Closing Date is less than $-220,168 (negative $220,168) (the “Target Amount”). The amount of any such adjustment shall be paid to Merge from the Holdback.

(b)  Net Asset Value . For purposes of this Section, the term “Net Asset Value” means the net asset value reflected in the Closing Balance Sheet (as hereinafter defined), except that the following shall be excluded from the calculation of any Net Asset Value: (i) cash received upon exercise of stock options for Shares exercised after September 30, 2004; (ii) up to $80,000 of legal fees incurred by the Company in connection with the Merger, as evidenced by invoices of legal counsel for the Company prepared in a manner consistent with past practices; and (iii) operating losses of the Company incurred in the ordinary course of business from and after October 1, 2004 (not to exceed $40,000 per full calendar month, prorated to the Closing Date).

(c) Five days prior to the Closing Date, the Company will prepare a Preliminary Balance Sheet in accordance with GAAP which has properly accrued for all amounts owed to vendors and employees, current and previous management and properly reserved for bad debt and all pending, threatened and contingent liabilities required to be reserved for under GAAP up to and including the Closing Date (such balance sheet, the “Preliminary Balance Sheet” and such procedures, the “Balance Sheet Procedures”). If the Preliminary Balance Sheet indicates that the Net Asset Value is less than the Target Amount, Merge may deduct the difference from the Merger Consideration.

The final balance sheet as of the Closing Date (the “Closing Date Balance Sheet”) will be prepared by Merge and delivered to the Principal Shareholder within one hundred eighty (180) days after Closing. The Closing Date Balance Sheet shall be prepared consistent with the Balance Sheet Procedures. If the Principal Shareholder notifies Merge within thirty (30) days following receipt of the Closing Date Balance Sheet that the Principal Shareholder disagrees with the Closing Date Balance Sheet, the parties shall attempt in good faith to resolve such dispute as soon as possible. If the parties are unable to resolve such dispute within thirty (30) days after the Merge’s receipt of notice from the Principal Shareholder, such dispute shall be submitted to a neutral office of nationally recognized independent accountants (the “Auditor”) jointly chosen by, and mutually acceptable to, the Principal Shareholder and Merge for the purpose of resolving the dispute set forth in such notice. If the parties are not able to agree on the Auditor within thirty (30) days, the Auditor shall be the Milwaukee Office of Grant Thornton or Deloitte Touche. The Auditor shall review and decide the issue or issues that are subject of such dispute within 30 days. The decision of the Auditor shall be binding on the parties. The fees and costs of the Auditor shall be borne equally by the Principal Shareholder and Merge (50%). Any amount by which the Net Asset Value, as finally determined in the Closing Date Balance Sheet, is less than the Target Amount (other than any amount already withheld from the Merger Consideration) shall at Merge’s option, either first be paid out of the Holdback referred to in Section 2.9 or be subject to indemnification as provided in Section 8. The Merger Consideration shall not be increased if the Closing Date Balance Sheet Net Asset Value shows a lower net loss than the Target Amount.

2.9 HOLDBACK.

$1,000,000 of the Merger Consideration shall be deposited by Merge at Closing with the Escrow Agent to be governed by the terms of the Escrow Agreement (the “Holdback”). At the conclusion of the escrow Merge will pay the Principal Shareholder simple interest out of its own funds to the extent sufficient funds are not in Escrow, at the rate of five percent (5%) per annum, on the net adjusted balance of the Holdback outstanding at the end of the escrow period (i.e. original balance less amounts due to Merge under Section 2.8 or Section 8 of this Agreement) and due to Principal Shareholder. Such interest will be calculated from the Closing Date. No interest shall be paid by Merge or out of the Escrow to Principal Shareholder from and after the Closing Date on amounts paid to Merge out of the Escrow.

SECTION 3. REPRESENTATIONS AND WARRANTIES OF COMPANY AND THE PRINCIPAL SHAREHOLDER

The Company and the Principal Shareholder, jointly and severally prior to the Closing, and the Principal Shareholder by himself from and after the Closing, hereby represent and warrant to, and covenant with, Merge and Acquisition Sub as of the date of this Agreement and as of the Closing Date, as follows, it being agreed that a disclosure applicable to one representation and warranty shall be deemed to modify and provide information with respect to the other representations and warranties to which the disclosure is reasonably believed to be relevant without the necessity of repetition:

3.1 ORGANIZATION.

The Company is a corporation duly organized, validly existing and in good standing under the Laws of the State of Nevada. The Company and each of its Affiliates is duly qualified or licensed to conduct business and is in good standing under the Laws of each jurisdiction where the character of the properties owned, leased or operated by it or the nature of its activities makes such qualification necessary, a list of which is set forth on SCHEDULE 3.1, except where the failure to so qualify would not have a material adverse effect on the business or assets of the Company. The Company has full corporate power and authority necessary to own or lease its assets and property, and to carry on the Business and to own and use the properties owned and used by it. The Company has delivered to Merge copies of the Organizational Documents of the Company, each as amended to date, and each such document is in full force and effect. The Company is not in violation of its Organizational Documents. SCHEDULE 3.1 lists all Affiliates of the Company, indicating the jurisdiction of incorporation or organization of each Affiliate. The Company does not control, directly or indirectly, or have any direct or indirect ownership or equity interest in any Person.

3.2 AUTHORIZATION OF TRANSACTION.

The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by all necessary action on the part of the Board of Directors of the Company and, prior to Closing, will be authorized by all necessary action on the part of the Shareholders. The Company and the Principal Shareholder have the absolute and unrestricted right, power, authority and capacity (including full corporate power and authority) or have taken all requisite action to enable the Company and the Principal Shareholder to execute and deliver this Agreement and the Ancillary Agreements and to perform their obligations hereunder and thereunder. This Agreement has been, and upon Closing will be, duly executed and delivered by the Company and the Principal Shareholder. When duly executed and delivered, this Agreement constitutes, and each of the Ancillary Agreements delivered in conjunction with this Agreement, when executed and delivered will constitute, the valid and legally binding obligation of the Company and/or of the Principal Shareholder as the case may be, each enforceable in accordance with its terms, subject to (i) laws of general application relating to bankruptcy insolvency, and the relief of debtors, and (ii) general equitable principles.

3.3 NONCONTRAVENTION; CONSENTS.

(a) Except as set forth on Schedule 3.3, the execution and delivery of this Agreement and the Ancillary Agreements by the Company and the Principal Shareholder contemplated by this Agreement, and the consummation and performance by the Company and the Principal Shareholder of the transactions contemplated hereby or thereby, will not: (i) violate any Law to which the Company or the Principal Shareholder or by which either of them or any of their respective properties are bound or affected; (ii) violate any provision of the Organizational Documents of the Company; (iii) result in any breach of or constitute a default (or an event that with notice or lapse of time or both would become a default) under or impair the Company’s rights or alter the rights or obligations of any third party under, or give to others any rights of termination, amendment, acceleration or cancellation of, or result in the creation of a Lien on any of the properties or assets of the Company, pursuant to any Contract, Permit, or other instrument or obligation to which the Company is a party or by which the Company or its properties are bound or affected.

(b) SCHEDULE 3.3 lists all consents, waivers and approvals required to be obtained in connection with the consummation and performance of the transactions contemplated hereby under any of the Contracts or Permits to which the Company or the Principal Shareholder is a party. No Contract to which the Company is a party has been amended to increase the amount payable by the Company thereunder or otherwise modify the terms thereof in order to obtain any such consent, approval or authorization.

(c) Except as set forth on Schedule 3.3, no consent, approval, order or authorization of or registration, declaration or filing with any Governmental Entity, is required by or with respect to the Company or the Principal Shareholder in connection with the execution and delivery of this Agreement or the consummation of the transactions contemplated hereby or thereby.

3.4. CAPITALIZATION.

(a) SCHEDULE 3.4 sets forth for the Company (i) the number of shares of authorized capital stock, (ii) the number of issued and outstanding capital stock of each class of the shares, (iii) the names of its directors and elected officers and (iv) the names each Person owning options or warrants for Shares and the number of shares, options, warrants, and convertible securities owned by such Person and obtainable upon exercise in full of all options and warrants. All of the issued and outstanding Shares of capital stock of the Company, and all Shares issuable upon exercise of outstanding options and warrants, have been duly authorized and are validly issued, fully paid and nonassessable and are not subject to preemptive rights whether created by (i) statute, (ii) the Organizational Documents of the Company or (iii) any agreement or document to which the Company or any Affiliate thereof is a party or by which it is bound. The Principal Shareholder holds of record and owns beneficially good, valid and marketable title to all of the outstanding Shares of the Company listed on SCHEDULE 3.4, free and clear of any restrictions on transfer (other than restrictions under the Securities Act of 1933, as amended, and applicable state securities Laws), Taxes, Liens, options, warrants, purchase rights, contracts, agreements, commitments, equities, claims or demands.

(b) Except as set forth in SCHEDULE 3.4, there are no equity securities, partnership or limited liability company interests or similar ownership interests of any class of the Company, or any securities exchangeable or convertible into or exercisable for such equity securities, partnership or limited liability company interests or similar ownership interests, issued, reserved for issuance or outstanding. Except for securities the Company owns, directly or indirectly, there are no equity securities, partnership interests or similar ownership interests of any class of any subsidiary of the Company, or any security exchangeable or convertible into or exercisable for such equity securities, partnership interests or similar ownership interests, issued, reserved for issuance or outstanding. Except as set forth in SCHEDULE 3.4, there are no outstanding or authorized options, warrants, equity securities, partnership or limited liability company interests or similar ownership interests, calls, rights (including purchase rights, subscription rights, conversion rights, preemptive rights, exchange rights, rights related to stock appreciation, phantom stock or profit participation, or similar rights), or any commitments, contracts or agreements (all of the foregoing of which shall be terminated on or before the Closing Date) of any character to which the Company is a party or by which it is bound obligating the Company or the Principal Shareholder to issue, deliver, sell, or cause to be issued, delivered or sold, or repurchase, redeem or otherwise acquire, or cause the repurchase, redemption or acquisition, of any shares of capital stock, partnership interests or similar ownership interests of the Company or obligating the Company to grant, extend, accelerate the vesting of or enter into any such option, warrant, equity security, call, right, commitment, contract or agreement.

(c) All Shares and all options, warrants, convertible or other securities of the Company have been issued in compliance with all applicable federal and state securities laws and any applicable pre-emptive rights.

(d) The Principal Shareholder has good title to his 34,050,000 Shares, free and clear from any Lien, preemptive right, voting trust or shareholder agreement, exception, proxy, option, put, call, or any third-party right of any kind or nature whatsoever except the Voting Agreement. The Principal Shareholder has full and sole voting power (in the case of voting Shares owned by such Person) over his Shares and has the full right, power and authority to deliver his Shares to Merge in exchange for his pro rata share of the Merger Consideration in the manner provided for in this Agreement.

3.5 FINANCIAL STATEMENTS; SEC FILINGS.

(a) The Company has on a timely basis filed all forms, reports, and documents required to be filed by it with the Securities and Exchange Commission (“SEC”) since January 1, 2001. SCHEDULE 3.5 lists and (except to the extent available in full without redaction on the SEC’s web site through the Electronic Data Gathering, Analysis and Retrieval System (“EDGAR”) two days prior to the date of this Agreement) contains true and complete copies in the form filed with the SEC of (i) the Company’s Annual Reports on Form 10-K SB for each fiscal year of the Company ending on or after December 31, 1999; (ii) its Quarterly Reports on Form 10-Q SB for each of the first three fiscal quarters in each of the fiscal years of the Company referred to in clause (i) above; (iii) all proxy statements relating to the Company’s meetings of shareholders (whether annual or special) held, and all information statements relating to shareholder consents since the beginning of the first fiscal year referred to in clause (i) above; (iv) all certifications and statements required by (A) Rule 13a-14 or 15d-14 under the Exchange Act or (B) 18 U.S.C. § 1350 (Section 906 of the Sarbanes-Oxley Act of 2002 (“SOX”)) with respect to any report referred to in clause (i) or (ii) above; (v) all other forms, reports, registration statements, and other documents (other than preliminary materials if the corresponding definitive materials are contained in Schedule 3.5) filed by the Company with the SEC since the beginning of the first fiscal year referred to in clause (i) above (the forms, reports, registration statements, and other documents referred to in clauses (i), (ii), (iii), (iv), and (v) above are, collectively, the “Company SEC Reports” and, to the extent available in full without redaction on the SEC’s web site through EDGAR two days prior to the date of this Agreement, are, collectively, the “Filed Company SEC Reports”); and (vi) all comment letters received by the Company from the staff of the SEC since January 1, 2001, and all responses to such comment letters by or on behalf of the Company. All matters and statements made in the certifications and statements referred to in clause (iv) above are accurate. The Company SEC Reports (x) were or will be prepared in accordance with the requirements of the Securities Act and the Exchange Act, as applicable, and the rules and regulations thereunder and (y) did not at the time they were filed with the SEC, or will not at the time they are filed with the SEC, contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading. The Company maintains disclosure controls and procedures as required by Rule 13a-15 or 15d-15 under the Exchange Act. Schedule 3.5 contains true and complete copies of all written descriptions of and all policies, manuals, and other documents promulgating such disclosure controls and procedures. Except as disclosed in Filed Company SEC Reports, each director and executive officer of the Company has filed with the SEC on a timely basis complete and accurate versions of all statements required by Section 16(a) of the Exchange Act and the rules and regulations thereunder since January 1, 2001. As used in this Section 3.5, the term “filed” shall be broadly construed to include any manner in which a document or information is furnished, supplied, or otherwise made available to the SEC, including, but not limited to, as may be required pursuant to Item 9 or 12 of Form 8-K.

(b) The financial statements of the Company included or incorporated by reference in any Company SEC Reports (including the related notes) complied as to form, as of the respective dates of filing of such Company SEC Reports with the SEC, in all material respects with applicable accounting requirements and the rules and regulations of the SEC with respect thereto (including, without limitation, Regulation S-B), have been prepared in accordance with GAAP (except, in the case of unaudited financial statements, to the extent permitted by Regulation SB for Quarterly Reports on Form 10-Q-SB) applied on a consistent basis throughout the periods involved (except as may be indicated in the notes thereto) and fairly present the consolidated financial condition of the Company at the dates thereof and the consolidated results of operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to notes and normal year-end audit adjustments that were not, or with respect to any such financial statements contained in any Company SEC Reports to be filed subsequent to the date hereof are not expected to be, material in amount or effect). Schedule 3.5 lists copies of the documentation creating or governing, all “off-balance sheet arrangements” (as defined in Item 303(c) of Regulation SB) in effect with respect to the Company during any period covered by any of the Company SEC Reports that was required to be disclosed in any Company SEC Report. Odenburg, Ullakko Murenishi & Company, LLP, which has expressed its opinion with respect to the consolidated financial statements of the Company included in Company SEC Reports (including the related notes) filed after January 1, 2003, (x) is a registered public accounting firm (as defined in Section 2(a)(12) of SOX), (y) to the Company’s knowledge, after reasonable inquiry, is and has been throughout the periods covered by such financial statements “independent” with respect to the Company within the meaning of Regulation S-X, and (z) to the Company’s knowledge, after reasonable inquiry, is, and has been throughout the periods covered by such financial statements, with respect to the Company, in compliance with subsections (g) through (l) of Section 10A of the Exchange Act. Pohl McNabola Berg & Company LLP, which expressed its opinion with respect to the consolidated financial statements of the Company included in Company SEC Reports (including the related notes) filed prior to January 1, 2003, (y) to the Company’s knowledge, after reasonable inquiry, was throughout the periods covered by such financial statements “independent” with respect to the Company within the meaning of Regulation S-X, and (z) to the Company’s knowledge, after reasonable inquiry, was throughout the periods covered by such financial statements, with respect to the Company, in compliance with subsections (g) through (l) of Section 10A of the Exchange Act. SCHEDULE 3.5 lists all non-audit services performed by Odenburg, Ullakko Murenishi & Company, LLP or Pohl McNabola Berg & Company LLP for the Company since January 1, 2003.

(c) Except as and to the extent set forth on the audited balance sheet of the Company as of September 30, 2004, including all notes thereto (the “Year-end Balance Sheet”) attached to this Agreement as SCHEDULE 3.5(c), the Company has no liabilities or obligations of any nature (whether accrued, absolute, contingent, or otherwise) that would be required to be reflected on a balance sheet, or in the notes thereto, prepared in accordance with GAAP, except (i) for liabilities or obligations incurred in the ordinary course of business since September 30, 2004, that would not have a material adverse effect on the Company, or (ii) as otherwise reflected in the Filed Company SEC Reports.

3.6 UNDISCLOSED LIABILITIES.

The Company has no material liabilities or obligations of a type required to be disclosed on a balance sheet or in the related notes to the combined financial statements prepared in accordance with GAAP (whether known or unknown, absolute or contingent, liquidated or unliquidated, or due or to become due) except for liabilities and obligations which are: (a) reflected or reserved for on the Financial Statements or (b) that have arisen since the date of the last Year-end Balance Sheet in the ordinary course of the operation of the Company (all of which material liabilities and obligations are set forth on SCHEDULE 3.6 and none of which results from, arises out of, relates to, is the nature of or was caused by any breach of contract, breach of warranty, tort, infringement or violation of Law) except as disclosed on such Schedule.

3.7 SUBSEQUENT EVENTS.

Since December 31, 2003, there has not been any material adverse change in the business, condition, operations, properties, assets, results of operations or prospects of the Company nor has any event occurred or circumstance arisen that could reasonably be expected to result in such material adverse change. Except as set forth in SCHEDULE 3.7, since the end of its last fiscal year, the Company has conducted its business only in the ordinary course of business and there has not been any:

(a) single transaction in an amount exceeding $10,000 or series of related transactions that result in expenditures in excess of $25,000 (not including compensation paid in the ordinary course of business);

(b) change in the Company’s authorized or issued capital stock; grant of any stock option or right to purchase shares of capital stock of the Company; issuance of any security convertible into such capital stock; grant of any registration rights; purchase, redemption, retirement, or other acquisition by the Company of any shares of any such capital stock; or declaration or payment of any dividend or other distribution or payment in respect of shares of capital stock;

(c) amendment to the Organizational Documents of the Company;

(d) payment or increase by the Company of any bonuses, salaries, or other compensation to any shareholder, director, officer, or (except in the ordinary course of business) employee or entry into any employment, severance, separation, or similar agreement with any director, officer or employee, except for the salaries and bonuses set forth upon SCHEDULE 3.7, the amount of which bonuses is consistent with the past practices of the Company;

(e) adoption of, or increase in the payments to or benefits under, any profit sharing, bonus, deferred compensation, savings, insurance, pension, retirement or other Employee Benefit Plan for or with any employees of the Company;

(f) damage to or destruction or loss of any asset or property of the Company, whether or not covered by insurance, materially and adversely affecting the properties, assets, business, financial condition or prospects of the Company, taken as a whole;

(g) entry into, termination of, or receipt of notice of termination of (i) any cooperative, marketing, license, distributorship, sales representative, joint venture, credit or similar agreement, or (ii) any Contract or transaction, or series of related Contracts or transactions, involving a total commitment by or to the Company of more than $25,000.00, except for sales (but not terminations) to customers in the ordinary course of business;

(h) sale (other than sales in the ordinary course of business), lease or other disposition of any asset or property of the Company or mortgage, pledge or imposition of any Lien on any material asset or property of the Company;

(i) cancellation or waiver of any claims or rights with a value to the Company in excess of $10,000;

(j) material change in the accounting methods, principles or practices used by the Company;

(k) any revaluation by the Company of any of its assets, including writing down the value of capitalized inventory or writing off notes or Accounts Receivable (defined below) other than in the ordinary course of business;

(l) agreement, whether oral or written, by the Company to do any of the foregoing; or

(m) Contracts awarded to the Company, including those as to which work has not yet commenced, that include prices at levels not reasonably expected, to yield profits at the Company’s usual and customary profitability margins.

3.8 ACCOUNTS RECEIVABLE.

All accounts receivable of the Company that are included in the Year-end Balance Sheet or on the accounting records of the Company as of the Closing Date or the Preliminary Balance Sheet (collectively, the “ACCOUNTS RECEIVABLE”) represent or will represent valid obligations accounted for in accordance with GAAP applied on a basis consistent with that used in the preparation of the Financial Statements arising from sales actually made or services actually performed in the ordinary course of business. All such Accounts Receivable on the Preliminary Balance Sheet will be or have been collected, net of the respective reserves shown on the Preliminary Balance Sheet, within 90 days following the Closing Date. The reserves maintained by the Company are adequate and calculated consistent with past practice and, in the case of the reserve as of the Closing Date, will not represent a greater percentage of the Accounts Receivable as of the Closing Date than the reserve reflected in the Year-end Balance Sheet representing the Accounts Receivable reflected therein and will not represent a material adverse change in the composition of such Accounts Receivable in terms of aging). There is no contest, claim or right of set-off, under any Contract with any obligor of an Accounts Receivable relating to the amount or validity of such Accounts Receivable. SCHEDULE 3.8 contains a complete and accurate list of all Accounts Receivable as of the date hereof, which list sets forth the aging of such Accounts Receivable.

3.9 TAX MATTERS.

(a) The Company filed all Tax Returns that it was required to file and all such Tax Returns relating to the Company were correct and complete in all respects. Except as set forth on SCHEDULE 3.9(a)(1), all Taxes owed by the Company, whether or not shown on any Tax Return, have been paid when due. Except as set forth on SCHEDULE 3.9(a)(2), the Company is not currently the beneficiary of any extension of time within which to file any Tax Return. No claim with respect to the Company has ever been made by an authority in a jurisdiction where the Company does not file Tax Returns that any such entity is or may be subject to taxation by that jurisdiction. There is no Lien affecting the Shares or any of the assets or properties of the Company that arose in connection with any failure or alleged failure to pay any Tax.

(b) The Company has withheld and paid all Taxes required to have been withheld and paid in connection with amounts paid or owing to any employee, independent contractor, creditor, the Principal Shareholder or other party.

(c) No taxing authority will assess any additional Taxes for any period for which Tax Returns relating to the Company have been filed. There is no dispute or claim concerning any Tax liability of the Company claimed or raised by any authority. SCHEDULE 3.9(c) lists all federal, state, local and foreign income Tax Returns of the Company for the past six years, indicates those Tax Returns that have been audited and indicates those Tax Returns that currently are the subject of audit. The Company has delivered to Merge correct and complete copies of all federal income Tax Returns, examination reports and statements of deficiencies assessed against or agreed to by the Company for the past three years.

(d) The Company has not waived any statute of limitations in respect of Taxes or agreed to any extension of time with respect to a Tax assessment or deficiency.

(e) All material elections in effect as of the date hereof with respect to Taxes affecting the Company are set forth on SCHEDULE 3.9. The Company is not or will not be required to recognize positive adjustments to income pursuant to Section 481 of the Code.

(f) There are no outstanding rulings of, or requests for rulings from, any tax authority addressed to the Company that are, or if issued would be, binding on the Company.

(g) Except as set forth on SCHEDULE 3.9, the Company is not a party to any joint venture, partnership or other arrangement or contract which could be treated as a partnership for federal income tax purposes.

(h) The Company has not filed a consent under Section 341(f) of the Code concerning collapsible corporations. The Company has not made any payments, is not obligated to make any payments and is not a party to any agreement that under any circumstances could obligate it to make any payments that will not be fully deductible under Section 280G of the Code. The Company has not been a United States real property holding corporation with the meaning of Section 897(c)(2) of the Code during the applicable period specified in Section 897(c)(1)(A)(ii) of the Code. The Company has disclosed on its federal income Tax Returns all positions taken therein that could give rise to a substantial understatement of federal income Tax within the meaning of Section 6662 of the Code.

(i) None of the assets or properties of the Company secures any debt the interest on which is tax-exempt under Section 103(a) of the Code. None of the assets or properties of the Company are “tax-exempt use property” within the meaning of Section 168(h) of the Code. The transactions contemplated by this Agreement are not subject to Tax withholding pursuant to the provisions of Section 3406 or Subchapter A of Chapter 3 of the Code or any other provision of applicable Law. The Principal Shareholder is a United States Person within the meaning of the Code.

(j) Except as set forth on SCHEDULE 3.9, the Company is not a party to any Tax allocation or Tax sharing agreement. The Company (i) is not and has not been a member of an Affiliated Group filing a consolidated federal income Tax Return, and (ii) has not any liability for the Taxes of any Person under Treasury Regulation Section 1.1502-6 (or any similar provision of state, local or foreign Law), as a transferee or successor, by contract or otherwise.

(k) No taxing authority will assess any additional income Taxes against any Affiliated Group for any period during which the Company was a member of such group. There is no dispute or claim concerning any income Tax liability of any Affiliated Group for any taxable period during which the Company was a member of such group either (i) claimed or raised by any authority in writing or (ii) as to which the Company has knowledge based upon personal contact with any agent of such authority. Except as set forth in SCHEDULE 3.9, no Affiliated Group has waived any statute of limitations with respect to any income Taxes or agreed to any extension of time with respect to an income Tax assessment or deficiency for any taxable period during which the Company was a member of such group.

(l) The unpaid taxes of the Company do not and will not as of the Closing Date exceed the reserves for tax liability set forth on its Year-end Balance Sheet.

(m) All net operating losses (“NOL’s”) set forth in the Tax Returns are valid.

(n) No new material book deficiencies are expected for the fiscal year ended September 30, 2004.

3.10 CONTRACTS.

(a) Except for the Contracts listed on SCHEDULE 3.10, the Company is not a party to or otherwise bound by any written or oral: (i) mortgage, indenture, credit agreement, security agreement, note, installment obligation or other instrument relating to the borrowing of money; (ii) guarantee of