Exhibit 10.1  ASSET
PURCHASE AGREEMENT by and among E-Z-EM, Inc.  and
 ODell
Engineering Ltd.  and
 Philip C.
ODell  January 16,
2005 -41-   ASSET PURCHASE
AGREEMENT


THIS
ASSET PURCHASE AGREEMENT (the Agreement) is entered into and effective
as of January 16, 2005 by and among E-Z-EM, Inc., a corporation organized and existing
under the laws of the State of Delaware (Purchaser), ODell
Engineering Ltd., a corporation organized and existing under the laws of Ontario (Seller)
and Mr. Philip ODell, an individual resident in the Province of Ontario (Shareholder).



WITNESSETH


WHEREAS,
Seller desires to sell to Purchaser and Purchaser desires to acquire from Seller certain
assets that Seller owns or in which Seller has an interest, on the terms and subject to
the conditions set forth herein; and



WHEREAS,
Shareholder is the sole shareholder and officer of Seller;



NOW,
THEREFORE, in consideration of the mutual covenants and agreements set forth in this
Agreement, and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:



1.
DEFINITIONS1.1
Definitions.
As used in this Agreement, the following defined terms shall have the meanings indicated
below:Acquired
Books and Records has the meaning set forth in Section 2.1.7.Action means
any action, suit, hearing, proceeding, arbitration or Governmental or Regulatory
Authority investigation or audit, whether civil, criminal, administrative or otherwise.
For purposes of this Agreement, pending Actions and Proceedings include
demands, claims, notices of violations, and demand letters.Affiliate means,
as applied to any Person, (a) any other Person directly or indirectly controlling,
controlled by or under common control with, that Person, (b) any other Person that owns
or controls 5% or more of any class of Equity Interest (including any Equity Interest
issuable upon the exercise of any Option) of that Person or any of its Affiliates, or (c)
any director, manager, member, partner, officer, agent, employee or relative of such
Person. For the purposes of this definition, control (including with
correlative meanings, the terms controlling, controlled by, and
under common control with) as applied to any Person, means the possession,
directly or indirectly, of the power to direct or cause the direction of the management
and policies of that Person, whether through ownership of voting securities or by
Contract or otherwise.Agreement means
this Agreement and the Exhibits and Schedules hereto (other than the Ancillary
Agreements, to the extent required by the context) and the-42-
certificates
delivered in connection herewith, as the same may be amended, modified or restated from
time to time in accordance with the terms hereof.Ancillary
Agreements means the Bill of Sale, the Assignment and Assumption Agreement, the
ODell Restrictive Covenant, and all other Contracts to be delivered in connection
with the transactions contemplated by this Agreement.Assets
and Properties of any Person means all assets and properties of every kind,
nature, character and description (whether real, personal or mixed, whether tangible or
intangible, whether absolute, accrued, contingent, fixed or otherwise and wherever
situated), including, the goodwill related thereto, operated, owned, licensed or leased
by or in the possession of such Person, including cash, cash equivalents, investment
assets, accounts and notes receivable, chattel paper, documents, instruments, general
intangibles, real estate, equipment, inventory, goods and Intellectual Property including
the goodwill related thereto.Assigned
Licenses has the meaning set forth in Section 2.1.4.Assignment
and Assumption Agreement has the meaning set forth in Section 3.2.2.Assumed
Obligations has the meaning set forth in Section 2.3.Bill
of Sale has the meaning set forth in Section 3.2.1.Books
and Records means all files, documents, instruments, papers, books and records
relating to the Business, including budgets, data bases, pricing guidelines, ledgers
(including general financial ledgers), journals, deeds, records, files and other data
relating to current and past orders and jobs and prospect lists for future orders and
jobs, Contracts, Licenses, customer and supplier lists, mailing lists, computer files and
programs, retrieval programs, operating data and plans and environmental studies and
plans.Business means
the business of Seller relating and/or involving the development, commercialization,
exploitation, marketing, manufacturing and sale of the RSDL Products and the RSDL
Technology.Business
Contracts has the meaning set forth in Section 2.1.6.Business
Day means a day other than Saturday, Sunday or any day on which banks located
in the State of New York are authorized or obligated to close.CCC
Contract means the contract dated November 21, 2003 (5FB0A-04/x809/001/PV)
between the Canadian Commercial Corporation and the Seller.Claim
Notice has the meaning set forth in Section 9.4.1.Closing has
the meaning set forth in Section 3.1.-43-
Closing
Date has the meaning set forth in Section 3.1.Code means
the Internal Revenue Code of 1986, as amended, and the rules and regulations promulgated
thereunder, and any successor legislation thereto.Condition as
it relates to any Person or business, means the condition (financial or otherwise),
results of operations, Assets and Properties and prospects of such Person or business.Confidential
Information has the meaning set forth in Section 7.4.Constating
Documents means, with respect to any Person (i) the articles of incorporation,
organization or formation forming such Person (or any similar document or certificate
serving such function) and all amendments thereto, (ii) the bylaws, agreement of general
or limited partnership, limited liability company operating agreement, as applicable, and
(iii) all resolutions of directors, committees, shareholders, members, managers,
partners, as applicable, of such Person.Consulting
Term has the meaning set forth in Section 7.1.Contract means
any written or oral contract, agreement, undertaking, understanding, promise or
commitment, whether express or implied, and whether or not legally binding.Customer
Orders has the meaning set forth in Section 2.1.5.Emergency
Services means police, firefighting, ambulance and hospital furnished
emergency medical services including search and rescue organizations.Employment
Offer means the written offer of employment from an Affiliate of Purchaser to
Jasmine Rakic, in the form attached as Exhibit B hereto.Equity
Interest means, as applicable, shares of capital stock, partnership interests,
membership interests, equity interests, quotas, or any similar term under applicable Law,
including nominee, qualifying and similar shares.Field
of Use means military, including chemical weapon demilitarization and area
remediation, and Emergency Services, but excludes Canadian military sales.Governmental
or Regulatory Authority means any court, tribunal, arbitrator, board, bureau,
department, authority, agency, commission, official or other instrumentality of the
United States, Canada, any foreign country or any domestic or foreign state, county, city
or other political subdivision.Improvements has
the meaning set forth in Section 7.5(a).-44-
Indebtedness of
any Person means all obligations of such Person (or any other Persons if secured by the
Assets and Properties of such first Person) (i) for borrowed money, (ii) evidenced by
notes, bonds, debentures or similar instruments, (iii) for the deferred purchase price of
goods or services (other than trade payables or accruals incurred in the ordinary course
of business), (iv) under capital leases and (v) in the nature of guarantees of the
obligations described in clauses (i) through (iv) above of any other Person.Indemnified
Party has the meaning set forth in Section 9.4.1.Indemnified
Person has the meaning set forth in Section 9.1.Indemnifying
Party has the meaning set forth in Section 9.4.1.Initial
Payment has the meaning set forth in Section 2.5(a)(ii).Intellectual
Property means, without duplication, all patents and patent rights, trademarks
and trademark rights, trade names and trade name rights, service marks and service mark
rights, service names and service name rights, brand names, inventions, processes,
formulae, copyrights and copyright rights, trade dress, business and product names,
logos, slogans, Trade Secrets, industrial models, processes, designs, specifications,
data, technology, methodologies, computer programs, confidential and proprietary
information, whether or not subject to statutory registration, and all related technical
information, manufacturing, engineering and technical drawings, know-how, ideas,
developments and all pending applications for and registrations of patents, trademarks,
service marks and copyrights, including all unregistered Intellectual Property rights
pertaining to the Business and the right to sue for past infringement, if any, in
connection with any of the foregoing, and all documents, disks and other media on which
any of the foregoing is stored.Intellectual
Property Assets means the RSDL Technology and the Improvements.Inventions has
the meaning set forth in Section 7.5(b).Knowledge or
Know or Known means, with respect to Seller, the
knowledge of any director, officer or employee of Seller, or all of them, as the case may
be, as well as matters that either Shareholder or any director, officer or employee of
Seller, or all of them, as the case may be, should have known, after due inquiry.Labor
Claims has the meaning set forth in Section 6.Laws means
all laws (including common law), statutes, rules, regulations, ordinances and other
pronouncements having the effect of law of the United States, Canada any foreign country
or any domestic or foreign state, county, city or other political subdivision or of any
Governmental or Regulatory Authority.-45-
Liabilities means
all Indebtedness, obligations and other liabilities of a Person (whether absolute,
accrued, contingent, known or unknown, fixed or otherwise, or whether due or to become
due).Licenses means
all licenses, permits, certificates of authority, authorizations, approvals,
registrations, franchises and similar consents granted or issued by any Governmental or
Regulatory Authority.Liens means
any mortgage, deed of trust, pledge, assessment, security interest, lease, lien, adverse
claim, levy, charge or other encumbrance of any kind, or any conditional sale Contract,
title retention Contract or other Contract to give any of the foregoing.Loss means
any and all damages, fines, fees, penalties, deficiencies, Liabilities, losses and
expenses, including interest, reasonable expenses of investigation, court costs,
reasonable fees and expenses of attorneys, accountants and other experts or other
expenses of litigation or other proceedings or of any claim, default or assessment (such
fees and expenses to include all fees and expenses, including fees and expenses of
attorneys, incurred in connection with (i) the investigation or defense of any third
party claims or (ii) successfully asserting or disputing any rights under this Agreement
against any party hereto or otherwise).Net
Sales means the amount of sales of a product less any discounts, rebates,
chargebacks, returns, allowances, royalties paid to third parties, pre-paid freight and
insurance and uncollectible receivables.New
Product has the meaning set forth in Section 7.5(b).Nonassignable
Contract has the meaning set forth in Section 2.2.Nonassignable
License has the meaning set forth in Section 2.2.Option with
respect to any Person means any security, right, subscription, warrant, option, phantom stock
right or other Contract that gives the right to (i) purchase or otherwise receive or
be issued any Equity Interest of such Person or any security of any kind convertible into
or exchangeable or exercisable for any Equity Interest of such Person or (ii) receive any
benefits or rights similar to any rights enjoyed by or accruing to the holder of Equity
Interests of such Person, including any rights to participate in the equity, income or
election of directors or officers or Persons holding like positions or performing like
functions of such Person.Order means
any writ, judgment, decree, injunction or similar order of any Governmental or Regulatory
Authority (in each such case whether preliminary or final).Person means
any natural person, corporation, limited liability company, general partnership, limited
partnership, proprietorship, other business-46-
organization,
trust, union, association or Governmental or Regulatory Authority and also includes a
division of any Person.Prohibited
Worker shall have the meaning set forth in Section 7.9.1;Purchase
Price has the meaning set forth in Section 2.5(a).Purchaser has
the meaning set forth in the preamble.RC
Term shall have the meaning set forth in Section 7.8.1;Retained
Obligations has the meaning set forth in Section 2.4.Royalty
Payment has the meaning set forth in Section 2.5(a)(vi).RSDL
Consent has the meaning set forth in Section 3.2.3.RSDL
License Agreement means the license agreement effective May 14, 1996
between Her Majesty the Queen in Right of Canada, as represented by the Minister of
National Defence, and ODell Engineering Ltd., as amended by that First Amending
Agreement dated April 1, 1999.RSDL
Product means any solution, lotion, foam, cream, barrier cream, skin
decontaminant or substance for topical application in humans, the manufacture, use, or
sale of which incorporates any aspect of the RSDL Technology.RSDL
Technology means all Intellectual Property directly or indirectly relating to
the RSDL License Agreement.Sale
Assets has the meaning set forth in Section 2.1.Seller has
the meaning set forth in the preamble.Services
has the meaning set forth in Section 7.1.Shareholder has
the meaning set forth in the preamble.Software
License has the meaning set forth in Section 7.13.Support has
the meaning set forth in Section 7.13.Tax or
Taxes means all federal, state, provincial, local or foreign net or
gross income, gross receipts, net proceeds, sales, use, ad valorem, value added,
franchise, bank shares, withholding, payroll, employment, excise, sales, use, property,
alternative or add-on minimum, environmental or other taxes, assessments, duties, fees,
levies or other governmental charges of any nature whatever, whether disputed or not,
together with any interest, penalties, additions to tax or additional amounts with
respect thereto.-47-
Tax
Returns means any returns, reports or statements (including any information
returns) required to be filed for purposes of a particular Tax.TD
Fund means the Technology Development Fund, as defined in the RSDL License
Agreement.Termination
Agreement has the meaning set forth in Section 3.2.8.Territory shall
have the meaning ascribed to it in the RSDL License Agreement.Therapex
Agreement means that certain representation and supply agreement made February
11, 1997 between the Therapex division of E-Z-Em Canada, Inc. and the Seller.Third
Party Claim has the meaning set forth in Section 9.4.1.Trade
Secrets has the meaning set forth in the Economic Espionage Act of 1996, as the
same may be amended from time to time.Treaty has
the meaning set forth in Section 2.7.1.US
Government Contract means the contract effective as of October 31, 2003 between
US Med Research ACQ Activity and Canadian Commercial Corporation W81XWH-04-D-001, as
amended by MOD A00001, effective as of July 13, 2004, P00001, effective as of July 16,
2004 and P00002, effective as of August 20, 2004.VRSmeans
Vanguard Response Systems Inc., a corporation organized under the laws of the Province
of Ontario, and an Affiliate of Seller.1.2
Unless
the context of this Agreement  otherwise  requires,  (i) words of any gender  include
each other gender;  (ii) words                      using the singular or plural  number
also include the plural or singular  number,  respectively;  (iii) the terms
                     hereof,  herein,  hereby and
 derivative  or similar  words refer to this entire  Agreement;  (iv) the term
                     Section refer to the specified  Section of this
Agreement;  (v) the term other party refer to Seller,  on the
                     one hand, and Purchaser,  on the other;  (vi) the phrases  ordinary
 course of business and ordinary course of                      business
 consistent  with prior  practice  refer to the  business  and  practice of Seller
and (vii) the phrase                      including shall mean including
without limitation.2.
PURCHASE
AND SALE OF ASSETS AND ASSUMPTION OF LIABILITIES2.1
Sale
Assets. Subject to and upon the terms and conditions set forth in this Agreement, Seller
hereby agrees to sell, assign and deliver to Purchaser and Purchaser hereby agrees to
purchase, free and clear of all Liabilities and Liens, other than the Assumed
Obligations, all of Sellers right, title and interest in and to-48-
the
following Assets and Properties (collectively, the Sale Assets) on the
Closing Date such that Purchaser shall have good and marketable title thereto:2.1.1
all
Assets and Properties relating to the RSDL Technology and/or the Business;2.1.2
the
TD Fund, and all research, developments,  improvements,  products, information,  contacts
and other rights and benefits                                related thereto;2.1.3
all
Improvements;2.1.4
all
Licenses relating to the Business (the Assigned Licenses);2.1.5
all
customer orders of Seller relating to the Business as at the Closing Date, which
shall be the customer orders set forth on Schedule
2.1.5, minus orders that are filled between the date of Schedule 2.1.5 and the
Closing Date, plus orders entered into in the
ordinary course of business consistent with prior
practice between the date of Schedule 2.1.5 and the
Closing Date (the Customer Orders);2.1.6
all
Contracts (other than the Customer Orders) (i) to which Seller is a party,
relating to the Business, including the RSDL License Agreement, Contracts
relating to suppliers, sales representatives, dealers, distributors, marketing
arrangements, maintenance agreements, manufacturing arrangements,
confidentiality agreements and non-compete agreements, and (ii) described herein
as pending Contracts, provided that this Section 2.1.6 shall transfer the
exclusive right, but not the obligation, to negotiate and enter into each such
Contract (collectively, the Business Contracts), a list of which
Business Contracts is set forth on Schedule 2.1.6;2.1.7
all
Books and Records of Seller other than those not directly or indirectly related to the
Business (the Acquired Books and Records);
and2.1.8
all
other Assets and Properties of any kind of Seller that relating to, employed in
connection with or otherwise  necessary                                or beneficial  for
the operation of the Business,  in each case not otherwise set forth in this Section
                               2.1.  For greater  certainty,  this  Section  2.1.8 shall
not  include any office  furniture  or office                                equipment of
Seller.2.2
Nonassignable
Contracts and Permits. To the extent that any Customer Order or Business Contract (a
Nonassignable Contract) or any License (a Nonassignable License)
is not assignable or transferable without the consent or waiver of the issuer thereof or
the other party thereto or any third party (including any Governmental or Regulatory
Authority) or if such assignment or transfer or attempted assignment or transfer would
constitute a breach thereof or a violation of any Law or Order, this Agreement shall not
constitute an assignment or-49-
transfer,
or an attempted assignment or transfer thereof until such consent or waiver has been
obtained, and the following provisions shall be applicable:2.2.1
Seller
shall use its best efforts and Purchaser shall reasonably  cooperate  therewith,  to
obtain the consents and waivers                                referred  to in this
 Section  2.2.  To the  extent  that any  consent  or waiver  referred  to in this
                               Section 2.2 is not obtained by Seller,  Seller  shall (A)
provide to Purchaser at Sellers  expense the
                               benefits of any such  Nonassignable  Contract and/or any
such Nonassignable  License,  (B) cooperate in                                any
 reasonable  and lawful  arrangement  requested by Purchaser  designed to provide such
 benefits to                                Purchaser,  and (C) at the  request of
 Purchaser,  enforce for the  account of  Purchaser  at Sellers
                               expense any right of Seller arising from any such
Nonassignable  Contract and/or Nonassignable  License
                               against such issuer or the other party or parties  thereto
 (including  the right to elect to terminate                                in accordance
with the terms thereof on the advice of Purchaser).2.2.2
To
the extent that  Purchaser  is provided the benefits  pursuant to this Section 2.2 of any
such  Nonassignable  Contract,                                Purchaser  shall perform
for the benefit of the issuer  thereof or the other party or parties  thereto,
                               the obligations of Seller thereunder or in connection
 therewith,  but only to the extent that (i) such
                               performance  would not  result in any  default  thereunder
 or in  connection  therewith  and (ii) such                                obligations
would have been Assumed  Obligations,  but for the  nonassignability or
 nontransferability                                thereof.2.2.3
The
 provisions  of this  Section 2.2 shall not affect  Purchasers  obligation  to
 indemnify  Seller and any other Person                                pursuant to
Section 9.2.3
Assumed
Obligations. Purchaser is not assuming any obligations in connection with the
sale, transfer, conveyance, assignment and delivery of the Sale
Assets pursuant to this Agreement except for the obligations of Seller set
forth on Schedule 2.3, but only to the extent arising and to be
performed on or after the Closing Date, and excluding any such
obligations arising or to be performed prior to the Closing Date (the Assumed
Obligations), provided, however, that notwithstanding
anything herein to the contrary, Purchaser shall assume such obligations
only to the extent that Purchaser receives the benefits relating to
such Assumed Obligations.2.4
Retained
Obligations. Purchaser shall not assume any of the Liabilities of Seller other than
the Assumed Obligations. Without limiting the foregoing, except
for the Assumed Obligations, Seller shall be responsible for and shall
discharge in a timely manner all Liabilities incurred by Seller (the
Retained Obligations).2.5
Purchase
Price. (a) The purchase price for the Sale Assets shall be Five Million Dollars
($5,000,000.00) plus the amount payable pursuant to Section
2.5(a)(vi)-50-
(the
Purchase  Price),  payable as follows  (provided that in no event
                     shall the Purchase Price exceed Thirteen Million Dollars
($13,000,000.00)):(i)
Five
Hundred  Thousand  Dollars  ($500,000.00)  payable on the signing of this Agreement by
way of certified  check or wire                                                transfer
(the Deposit);(ii)
Two
 Million  Five  Hundred  Thousand  Dollars  ($2,500,000.00)  payable at the Closing by
way of  certified  check or wire                                                transfer
(the Initial Payment);(iii)
Six
Hundred Thousand Dollars ($600,000.00) on the date which is 180 days after the Closing
Date;(iv)
Seven
Hundred Thousand Dollars ($700,000.00) on the first anniversary of the Closing Date;(v)
Seven
Hundred Thousand Dollars ($700,000.00) on the second anniversary of the Closing Date; and(vi)
the
sum of (A) five percent (5%) of all Net Sales of RSDL Products made in the Field of Use
(plus Canadian  military sales)                                                in the
Territory (plus Canada), plus(B)
one percent (1%) of the portion of all federal grants or awards to Purchaser that are
specifically allocated by the applicable federal agency or official for capital
expenditures by Purchaser to produce RSDL Product,in
each case after the Closing Date (the Royalty Payment), up to a
maximum of Eight Million Dollars ($8,000,000.00); provided however, that the right to
receive Royalty Payments shall not apply to any Net Sales, grants or awards made after
the seventh anniversary of the Closing Date, even if the aggregate amount of Royalty
Payments actually earned pursuant to this Section 2.5(a)(vi) with respect to Net Sales,
grants or awards through such date is less than $8,000,000.00, unless the contract for
such Net Sales was executed or the grant or award approved prior to the seventh
anniversary of the Closing Date (and the $8,000,000.00 cap has not yet been reached). For
greater certainty, in no circumstances shall the total amount of the Royalty Payments
exceed $8,000,000.00.(b)
Subject
to the  limitations  set forth in Section  2.5(a)(vi),  installments of the Royalty
Payment shall be paid quarterly                                           within
 forty-five  (45)  days of the end of each  fiscal  quarter  of  Purchaser  in  which
                                          payment for the RSDL Products that generated
such Net Sales are received by Purchaser.-51-
2.6
Allocation
of Purchase Price. Seller and Purchaser shall, and shall cause their respective
Affiliates to, allocate the Purchase Price (including for this
purpose the Assumed Obligations) among the Sale Assets in an amount equal to
their fair market value as set forth on Schedule 2.6. Seller
and Purchaser each agrees to be bound by the allocations set
forth in this Section 2.6, and to file, or cause to be filed, all other Tax Returns in a
manner consistent with such allocation, and not to take any actions
inconsistent therewith.2.7
Withholding
Tax.2.7.1
As
required by the Code or any other  applicable  law,  Purchaser will withhold any required
amount from payments to Seller                                hereunder  for  payment to
the  appropriate  taxing  authority.   Any amount so  withheld  from will be
                               treated as paid to the Seller for  purposes  of this
 Agreement.   Unless  otherwise  required  by law,
                               Purchaser will withhold 10% of any amounts  treated as
interest for U.S.  federal  income  tax purposes                                that
 qualify for such 10% rate  pursuant to the  Convention  Between the United  States of
America and                                Canada with Respect to Taxes on Income and on
Capital (the Treaty),  provided  that Seller  executes
                               and files such forms or other  documents  as may be
 required  to secure his  entitlement  to such rate                                under
the  Treaty,  including  the  furnishing  by Seller of  Internal  Revenue  Service  Form
W-BEN to                                Purchaser.   If Seller fails to execute or file
any such forms,  or  otherwise  fails to take action to
                               secure his  entitlement to the 10% rate provided  under
the Treaty,  Purchaser will withhold 30% of any                                amounts
that are treated as interest for U.S. federal income tax purposes.2.7.2
With
respect to payments  made under Section 2.5 hereof,  where a  portion any such payment is
treated as interest for U.S.                                federal  income tax
 purposes,  such  portion  will be  calculated  by reference to the test rate set
                               forth in  Treasury  Regulation  Section  1.1274-4,  which
is the lowest  applicable  Federal  rate in
                               effect during the three month period ending with the month
in which the Closing Date occurs.3.
CLOSING3.1
Closing
Date and Time. The closing of the purchase and sale of the Sale Assets (the Closing)
shall take place on or before February ___, 2005 at the offices of
Davies Ward Phillips & Vineberg, LLP, 625 Madison Avenue, 12th Floor,
New York, NY 10022, with effect as of 9:00 a.m. (the Closing
Date).3.2
Seller
Deliveries. At the Closing, Seller shall deliver to Purchaser:3.2.1
a
bill of sale in the form of Schedule 3.2.1, duly executed by Seller (the Bill of
Sale);-52-
3.2.2
an
 assignment  and  assumption  agreement in the form of Schedule  3.2.2,  duly  executed
by Seller (the Assignment  and                                Assumption
Agreement);3.2.3
the
written  consent of Her Majesty the Queen in Right of Canada,  as represented by the
Minister of National  Defence,  to                                the transfer of the
RSDL License  Agreement to Purchaser or an Affiliate of Purchaser,  which  consent,
                               for the avoidance of doubt,  shall also amend certain of
the  provisions of the RSDL License  Agreement                                and shall
be in the form of Schedule 3.2.3 (the RSDL Consent);3.2.4
the
written  consent of the  Canadian  Commercial  Corporation  to the  transfer of the CCC
 Contract  to  Purchaser  or an                                Affiliate of Purchaser
(the CCC Consent);3.2.5
the
Acquired Books and Records, which shall be delivered constructively;3.2.6
such
other good and sufficient  instruments of conveyance,  assignment and transfer, in form
and substance  satisfactory to                                Purchasers  counsel,
 as shall be required to vest in Purchaser good and marketable  title to the Sale
                               Assets free and clear of all Liabilities and Liens other
than the Assumed Obligations;3.2.7
such
documents as Purchaser may  reasonably  request to release all  outstanding  Liens on the
Sale Assets other than Liens                                with respect to the Assumed
Obligations;3.2.8
a
termination  agreement in the form of Schedule 3.2.8, duly executed by Seller with
respect to the Therapex Agreement (the Termination Agreement);3.2.9
a
Certificate  of Good Standing for Seller issued by the Province of Ontario dated not more
than five (5) days prior to the                                Closing Date;3.2.10
a
legal opinion of counsel to Seller in the form of Schedule 3.2.10;3.2.11
a
check of the Seller in the amount of Canadian  fifty thousand  dollars  ($50,000.00)
 payable to E-Z-EM  Canada,  Inc. in                                satisfaction of the
loan made by E-Z-EM Canada, Inc. to Seller;3.2.12
such
documents as Purchaser may request to transfer the Intellectual Property Assets; and3.2.13
all
other documents required to be delivered to Purchaser under the provisions of this
Agreement.3.3
Purchaser
Deliveries. At the Closing, Purchaser shall deliver or cause to be delivered to Seller:-53-
3.3.1
the
Initial Payment by wire transfer of immediately available funds to such account as Seller
shall designate.3.3.2
the
Assignment and Assumption Agreement, duly executed by Purchaser.3.3.3
the
Termination Agreement, duly executed by Purchaser.3.4
Employment
Offer. On or before the Closing, an Affiliate of Purchaser shall have delivered the
executed Employment Offer to Jasmine Rakic.3.5
Operation
of the Business of Seller. Between the date of this Agreement and the Closing, Seller
shall (and Shareholder shall cause Seller to):3.5.1
conduct
the RSDL Business only in the ordinary course of business;3.5.2
except
as otherwise  directed by Purchaser in writing,  and without making any commitment on
 Purchasers  behalf,  use its                                best efforts to
preserve intact its current business  organization,  keep available the services of its
                               officers,  employees  and agents and maintain its
relations  and good will with  suppliers,  customers,
                               employees, agents and others having business relationships
with it;3.5.3
confer
with Purchaser prior to implementing operational decisions of a material nature;3.5.4
otherwise
 report  periodically  to Purchaser  concerning  the status of its business,  operations
 and finances in any way                                material to the Sale Assets
and/or the Assumed Obligations;3.5.5
maintain
the Sale Assets in a state of repair and condition  that complies  with all legal
 requirements  and is consistent                                with the requirements and
normal conduct of Sellers business;3.5.6
keep
in full force and effect, without amendment, all material rights relating to Sellers
business;3.5.7
comply
with all Laws and contractual obligations applicable to the operations of Sellers
business;3.5.8
cooperate
 with Purchaser and assist  Purchaser in identifying  the  governmental  authorizations
 required by Purchaser to                                operate the business  from and
after the Closing  Date and either  transferring  existing  governmental
                               authorizations   of  Seller  to  Purchaser,   where
  permissible,   or  obtaining   new   governmental
                               authorizations for Purchaser;3.5.9
upon
request from time to time, execute and deliver all documents, make all truthful oaths,
testify in any proceedings and do all other acts that may be reasonably necessary or
desirable in the opinion of Purchaser to-54-
consummate
the transactions contemplated by this Agreement, all without further consideration; and3.5.10
maintain
all Acquired Books and Records of Seller relating to Sellers business in the
ordinary course of business.3.6
Negative
Covenant. Except as otherwise expressly permitted herein, between the date of this
Agreement and the Closing Date, Seller shall not, and
Shareholder shall not permit Seller to, without the prior written Consent of
Purchaser, (a) make any modification to any material Contract or
governmental authorization; or (b) enter into any compromise or
settlement of any litigation, proceeding or governmental investigation relating to
the Sale Assets, the RSDL Business or the Assumed Obligations.3.7
Notification.
Between the date of this Agreement and the Closing, Seller and Shareholder shall
promptly notify Purchaser in writing if any of them becomes aware of3.7.1
any
fact or condition that causes or constitutes a breach of any of Sellers
 representations and warranties made as of the                                date of
this Agreement or3.7.2
the
occurrence  after the date of this Agreement of any fact or condition that would or be
reasonably  likely to (except as                                expressly  contemplated
by this Agreement) cause or constitute a breach of any such  representation  or
                               warranty  had that  representation  or  warranty  been
 made as of the time of the  occurrence  of,  or                                Sellers
or either Shareholders  discovery of, such fact or condition.  During the same
period, Seller                                and Shareholder  also shall promptly
 notify  Purchaser of the occurrence of any breach of any covenant
                               of Seller or  Shareholder  in Section  3.5 or 3.6 or of
the  occurrence  of any event that may make the
                               satisfaction of the conditions in Section 10.1 impossible
or unlikely.3.8
Further
Assurances.3.8.1
At
any time or from time to time after the Closing,  at Purchasers request and without
further  consideration,  Seller and                                Shareholder  shall
 execute  and  deliver  to  Purchaser  such  other  instruments  of sale,  transfer,
                               conveyance,  assignment and  confirmation,  provide such
materials and  information and take such other                                actions  as
 Purchaser  may  reasonably  deem  necessary  or  desirable  in order  to more
 effectively                                transfer,  convey and assign to Purchaser,
 and to confirm Purchasers title to, all of the Sale Assets
                               and, to the fullest  extent  permitted by Law, to put
 Purchaser  in actual  possession  and  operating                                control
of the Sale Assets and to assist Purchaser in exercising all rights with respect
 thereto,  and                                otherwise to fulfill their  obligations
 under this  Agreement  and the  Ancillary  Agreements to which
                               they are a party.-55-
3.8.2
Seller
shall not in any manner, directly or indirectly,  take any action which is designed,
intended or might be reasonably                                anticipated  to have the
effect of  discouraging  customers,  suppliers,  lessors,  licensors and other
                               Persons having business  relations with the Business from
 maintaining the same business  relationships                                with
 Purchaser  at any time after the date of this  Agreement as were  maintained  with
Seller and its                                Affiliates  prior to the date of this
 Agreement.  Seller  will  immediately  give notice of and convey
                               any and all  inquiries  by a customer or by any other
 Person,  relating to or in  connection  with any                                Customer
Order, Contract, the Business or RSDL Technology, to Purchaser.3.8.3
Seller
hereby constitutes and appoints  Purchaser the true and lawful attorney of Seller,  with
full power of substitution,                                in the name of  Seller,  or
 Purchaser,  but on  behalf of and for the  benefit  of  Purchaser:  (i) to
                               demand and  receive  from time to time any and all the
Sale  Assets and to make  endorsements  and give                                receipts
 and  releases  for and in  respect  of the  same  and any part  thereof;  (ii) to
 institute,                                prosecute,  compromise and settle any and all
Actions or Proceedings  that Purchaser may deem proper in
                               order to  collect,  assert or enforce any claim,  right or
title of any kind in or to the Sale  Assets,                                (iii) to
defend or compromise  any or all Actions or  Proceedings in respect of any of the Sale
Assets,                                and (iv) to do all such acts and things in
relation to the matters set forth in the  preceding  clauses
                               (i) through (iii) as Purchaser shall deem desirable.
 Seller hereby  acknowledges  that the appointment                                hereby
made and the powers  hereby  granted are coupled  with an interest  and are not and shall
not be                                revocable  by it in any  manner  or for  any
 reason;  provided,  however,  that  Purchaser  shall  not
                               institute or prosecute  any Action in Sellers  name
unless  (x) Purchaser  has been advised by counsel                                that it
may not institute or prosecute  such Action in its own name,  (y) Purchaser  shall first
obtain                                the written consent of Seller to bring such Action,
 which consent shall not be unreasonably  withheld,
                               delayed or  conditioned,  and (z) such  Action  shall be
 brought at  Purchasers  own  expense  unless
                               Purchaser is entitled to  indemnification  for the costs,
 fees or expenses of such Action  pursuant to                                Section 9.1.3.8.4
At
any time after the Closing upon the written request of Purchaser to Seller or Seller to
Purchaser stating the need therefor for litigation, Tax or accounting purposes, the party
receiving such request shall (i) make or cause to be made available to the other party,
its Affiliates or successors, and permit such other party and its agents to inspect and
copy, the Books and Records of the party receiving such request (which for purposes
hereof shall be limited to the Acquired Books and Records if Purchaser is the party
receiving such request) and (ii) assist in arranging discussions with (and calling as
witnesses) officers, employees and agents of the party receiving such request on matters
relating to the Sale Assets, the Assumed Obligations and the Retained Obligations subject
to the reimbursement of the party receiving such request for any actual out-of-pocket
expenses-56-
incurred
by the party receiving such request in the performance of its obligations under this
Section 3.8.4.3.8.5
Notwithstanding
 anything to the contrary contained in this Section 3.8, if the parties are in an
adversarial  relationship                                in any Action,  the furnishing
of  information,  documents or records in accordance  with Section 3.8.4
                               shall be subject to applicable rules relating to discovery.3.9
Best
Efforts. Seller and Shareholder shall use their best efforts to cause the conditions in
Section 10 to be satisfied.4.
REPRESENTATIONS
AND WARRANTIES OF SELLER  AND SHAREHOLDERSeller
and Shareholder hereby jointly and severally represent and warrant to Purchaser as
follows:



4.1
Organization
of Seller. Seller is duly organized, validly existing and in good standing under the
Laws of the Province of Ontario and is duly qualified, licensed
or admitted to do business and is in good standing in those
jurisdictions in which the ownership, use or leasing of its Assets
and Properties relating to the Business, or the conduct or nature
of Business, makes such qualification, licensing or admission necessary. Set forth
on Schedule 4.1 is a list of all jurisdictions in which Seller is
qualified to do business. Seller has complied with all
requirements of fictitious name statutes in all jurisdictions in which it conducts the
Business and has not conducted the Business under any name other
than those listed on Schedule 4.1. Seller has all requisite power
and authority to own its Assets and Properties relating to the Business and to carry on
the Business.4.2
Shareholder.
Shareholder owns all of the issued and outstanding Equity Interests in Seller and no
other Person has any Option or any other interest with respect to
any Equity Interest in Seller.4.3
Power
and Authority. Seller has the full power and authority to execute and deliver this
Agreement and the Ancillary Agreements to which it is a party and
to perform its obligations hereunder and thereunder and to consummate the
transactions contemplated hereby and thereby. This Agreement
and each of the Ancillary Agreements to which Seller or
Shareholder is a party has been or will be duly and validly executed and delivered by
Seller and/or Shareholder, as applicable. This Agreement and the
Ancillary Agreements constitute the legal, valid and binding
obligation of Seller and/or Shareholder, as applicable,
enforceable against it or him in accordance with their respective
terms. This Agreement and each Ancillary Agreement to which Seller is a party
have been duly approved by all requisite action of Shareholder.4.4
No
Conflicts. The execution and delivery by Seller and Shareholder of this Agreement
and the Ancillary Agreements to which it or he is a party, the
performance by Seller and Shareholder of its or his obligations under this
Agreement and the Ancillary Agreements to which it or he is a
party and the-57-
consummation
 of the  transactions                      contemplated hereby and thereby do not and
will not:4.4.1
conflict
with or result in a violation or breach of any of the terms,  conditions or provisions of
the Constating Documents                                of Seller;4.4.2
conflict
 with or result in a violation or breach of any term or provision of any Law,  Contract,
 or Order  applicable  to                                Seller or Shareholder or any of
its or his Assets and Properties; or4.4.3
(i)
conflict with or result in a violation or breach of, (ii) constitute  (with or without
notice or lapse of time or both)                                a default under,  (iii)
require  Seller or  Shareholder  to obtain any consent,  approval or action of,
                               make any filing  with or give any notice to any Person as
a result or under the terms of,  (iv)  result                                in or give
to any Person any right of  termination,  cancellation,  acceleration  or modification in
or                                with  respect  to,  (v)  result  in or give to any
 Person  any  additional  rights or  entitlement  to
                               increased,  additional,  accelerated or guaranteed
 payments  under,  or (vi) result in the creation or
                               imposition  of any Lien upon such or any of its Assets and
 Properties  under,  any  Contract  to which                                Seller or
Shareholder is a party or by which any of its or his Assets and Properties are bound.4.5
Governmental
Approvals and Filings. Except as set forth in Schedule 4.5, no consent, approval or
action of, filing with or notice to any Governmental or
Regulatory Authority on the part of Seller or Shareholder is required in
connection with the execution, delivery and performance of this
Agreement or any of the Ancillary Agreements or the consummation of
the transactions contemplated hereby or thereby.4.6
Legal
Proceedings.4.6.1
There
are no Actions or Proceedings pending or, to the Knowledge of Seller,  threatened
 against,  relating to or affecting                                Seller,  Shareholder
 or any of their  respective  Assets and Properties  that (A) could  reasonably be
                               expected to result in the  issuance of an Order
 restraining,  enjoining or  otherwise  prohibiting  or
                               making illegal the  consummation  of any of the
 transactions  contemplated by this Agreement or any of
                               the Ancillary  Agreements or otherwise result in a
material diminution of the benefits  contemplated by                                this
 Agreement or any of the  Ancillary  Agreements to  Purchaser,  or (B) if determined
 adversely to                                Seller or Shareholder  could  reasonably be
expected to result in (a) any injunction or other equitable
                               relief that could  interfere in any respect  with the
 Business or (b) Losses by Seller,  individually,                                or in
the  aggregate  with  Losses in respect  of other such  Actions  or  Proceedings,
 exceeding  Ten                                Thousand Dollars ($10,000).-58-
4.6.2
There
are no facts or  circumstances  Known to Seller or Shareholder  that could reasonably be
expected to give rise to any                                Action that would be required
to be disclosed pursuant to Section 4.6.1.4.6.3
There
are no Orders outstanding against Seller or Shareholder.4.6.4
Attached
hereto as Schedule 4.6.4, are all responses of counsel for Seller to auditors requests
for information  regarding                                Actions or Proceedings  pending
or threatened  against,  relating to or affecting  Seller or its Assets
                               and Properties relating to the Business.4.7
Compliance
With Laws and Orders. Seller is now complying and has at all times since January 1,
2001 complied with all Laws and Orders applicable to the
Business. Seller has not at any time since January 1, 2001 received notice
that it is or has at any time since January 1, 2001 been, in
violation of or in default under, any Law or Order applicable to
it or to any of its Assets and Properties relating to the Business other than
violations and defaults that have been fully cured as of the
Closing Date. Neither the ownership nor use of the Sale Assets,
nor the conduct of the Business, conflicts with the rights of any
other Person, or violates, or with or without the giving of notice
or the passage of time, or both, will violate, conflict with or result in a default,
right to accelerate, increased costs or payments, or loss of
rights under, any terms or provisions of any Contract to which
Seller is a party or by which Seller or its Assets and Properties may be bound or
affected, or any Law or Order by which Seller or its Assets and
Properties may be bound or affected, or reasonably justify any Action or
penalty based thereon. Seller does not Know of any proposed Laws,
Orders, Governmental or Regulatory Authority takings,
condemnations or other proceedings that would be applicable to the Business before or
after the Closing Date.4.8
Taxes.4.8.1
All
Tax Returns and reports in respect of Taxes  required to be filed with respect to Seller
have been timely filed and all                                Taxes  required to be shown
on such Tax Returns and  reports or  otherwise  due have been timely  paid;
                               all such Tax  Returns and reports  (insofar as they relate
to the  activities  or income of Seller) are                                true,
 correct  and  complete  in all  respects;  and the Seller has paid in full or set up an
adequate                                reserve in respect of all material  Taxes for the
periods  covered by such Tax Returns,  as well as all
                               other material Taxes, penalties,  interest, fines,
 deficiencies,  assessments and governmental charges                                that
have become due and payable,  including  all Taxes that the Seller is  obligated to
withhold  from                                amounts paid or payable to or benefits
conferred upon employees, creditors and third parties.4.8.2
Seller
has not made any payments, is not obligated to make any payments,  and is not a party to
any Contract that under any                                circumstances  could-59-
oblige
it to make  payments to any person upon a change of control of the Seller,
                               in each case that would not be deductible under applicable
tax laws.4.8.3
There
are no Tax liens imposed by any Governmental or Regulatory Authority outstanding against
any Sale Assets.4.9
Intellectual
Property Rights.4.9.1
The
Intellectual  Property Assets set forth in Schedule 4.9 constitute the only Intellectual
Property used by Seller in the                                conduct of the  Business
 or  material  to the  Condition  of the  Business  and no other  Intellectual
                               Property is used by Seller or is necessary or beneficial
 in the conduct of the  Business.  Seller owns                                and
possesses all right title and interest in each item of the Intellectual  Property Assets,
 free and                                clear of all  Liens.  Except  as  disclosed  on
 Schedule  4.9,  (i)  Seller  has the  right to use the
                               Intellectual  Property  Assets  as  used  by  it,  (ii)
 Seller  has  not  made  any  registrations  or
                               applications  to  Governmental  or  Regulatory
 Authorities  in respect of such  Intellectual  Property
                               Assets,  (iii) there are no  restrictions on the direct or
indirect  transfer of any such  Intellectual                                Property
 Assets,  (iv) there has been delivered to Purchaser prior to the execution of this
Agreement,                                documentation  with respect to any invention,
 process,  design,  computer program or other know-how or
                               (without  duplication) Trade Secret included in the
Intellectual  Property Assets,  which documentation                                is
accurate in all material  respects and  reasonably  sufficient in detail and content to
identify and                                explain such invention,  process,  design,
 computer  program or other know-how or Trade Secret without
                               reliance on the special  knowledge  or memories  of
others,  (v) Seller has taken  reasonable  security
                               measures to protect the secrecy,  confidentiality  and
value of its Trade Secrets,  (vi) Seller has not                                granted
any license to use the  Intellectual  Property  Assets and (vii) Seller has no  Knowledge
 that                                the Intellectual Property Assets are being infringed
by any other Person.4.9.2
The
conduct of the Business is not infringing any Intellectual  Property rights of any other
Person and no claim is pending                                or, to the  Knowledge  of
Seller  has been  threatened  to such  effect.  There have been no claims and
                               there is no basis for any  claim  challenging  the  scope,
 validity  or  enforceability  of any of the                                Intellectual
Property Assets.4.9.3
Except
as set forth in Schedule  4.9,  Seller is not  obligated  to pay and  Purchaser  shall
not be  obligated to pay, any                                Person any royalty,  fee or
other  consideration  with respect to the use of the Intellectual  Property
                               Assets.4.10
Contracts.4.10.1
Schedule
4.10A contains a true and complete list of each of the following Contracts or other
arrangements (true and complete copies or, if none,-60-
complete
and accurate written descriptions of which, together with all amendments and supplements
thereto and all waivers of any terms thereof, are attached hereto as Schedule 4.10B) to
which Seller is a party or by which the Sale Assets are bound or affected or relating to
the Business or this Agreement:(a)
all
Contracts  (excluding benefit plans) providing for a commitment of employment or
consultation  services for a specified                                           or
unspecified  term, the name,  position and rate of  compensation  of each Person party to
                                          such a Contract and the  expiration  date of
each such Contract and any written or unwritten
                                          representations,  commitments,  promises,
 communications or courses of conduct involving an
                                          obligation of Seller to make payments (with or
without  notice,  passage of time or both) to
                                          any Person in connection with, or as a
consequence of, the transactions  contemplated hereby
                                          or by any of the Ancillary Agreements or to any
employee;(b)
all
Contracts  with any Person  containing  any provision or covenant  prohibiting or
limiting its ability to engage in any                                           business
 activity  relating to the  Business  anywhere in the world or to compete  with any
                                          Person  anywhere  in the world or  prohibiting
 or  limiting  the  ability  of any Person to
                                          compete with it anywhere in the world;(c)
all
partnership, joint venture, shareholders or other similar Contracts relating to the
Business;(d)
all
Contracts relating to the Business concerning the provision of services or products by or
to any Person;(e)
all
Contracts with independent contractors relating to the Business;(f)
all
Contracts relating to Indebtedness relating to the Business;(g)
all
Contracts relating to the RSDL Technology, including the RSDL License Agreement; and(h)
(A)
all other Contracts  relating to the Business that involve the payment or potential
 payment,  pursuant to the terms of                                           any  such
 Contract,  by or to it of more  than  Ten  Thousand  Dollars  ($10,000),  (B) all
                                          Contracts  relating to the Business  that
cannot be  terminated  within thirty (30) calendar
                                          days after giving notice of termination
 without  resulting in any cost or penalty to Seller
                                          and (C) and all of the Contracts that are
material to the Business.4.10.2
Each
Contract  required to be disclosed on Schedule  4.10A is in full force and effect and
 constitutes a legal,  valid and                                binding  Contract,
 enforceable in accordance  with its terms,  of each party thereto.  Seller and each
                               other-61-
party
to the such  Contracts  have complied  with such  Contracts and there is not under any
such                                Contract  any  existing  default,  or event  which,
 after  notice  or lapse  of time,  or both,  would
                               constitute a default or result in a right to  accelerate
 or loss of rights  thereunder.  Seller is not                                obligated,
nor can Seller be compelled, to renegotiate any such Contract.4.10.3
Seller
is not a party to or bound by any Contract  that has been or could  reasonably  be
expected to be, in the  aggregate                                with any other such
Contracts, adverse to the Condition of Seller or the Business.4.10.4
Neither
 Seller nor  Shareholder  knows or has reason to know that any party to any  Contract
 required  to be set forth on                                Schedule  4.10A  intends  to
 terminate  or seek  to  renegotiate  such  Contract,  whether  due to the
                               transactions contemplated by this Agreement and the
Ancillary Agreements or otherwise.4.10.5
Each
Business  Contract is disclosed on Schedule 4.10A, and except as set forth in Schedule
4.10.5,  each Business Contract                                is assignable to Purchaser
without the consent of any other party thereto or of any other purchaser.4.11
Insurance.
Since January 1, 2001, there have been no claims made under any insurance
policies with respect to the Business. Neither Seller nor
Shareholder has received notice that any insurer under any policy is denying
liability with respect to a claim thereunder or defending under a
reservation of rights clause. Neither Seller or Shareholder has any
Knowledge of any threatened claims.4.12
Affiliate
Transactions. With respect to the Business (i) there are no Liabilities between
Seller and any current or former officer, director, or
stockholder of Seller or any Affiliate of any such officer, director, or
stockholder, (ii) no current or former officer, director, or
stockholder of Seller or any Affiliate of any such officer,
director or stockholder provides or causes to be provided any assets, services or
facilities to Seller, and (iii) Seller neither provides nor causes
to be provided any assets, services or facilities to any current or
former officer, director, or stockholder of Seller, or Affiliate of
any such officer, director or stockholder.4.13
Other
Negotiations; Brokers. Neither Seller, Shareholder, any Affiliate thereof, or any
investment banker, financial advisor, attorney, accountant or
other Person retained by or acting for or on behalf of Seller, Shareholder or
any such Affiliate, (i) has entered into a Contract that
conflicts with this Agreement or any Ancillary Agreement to
which it is a party, or (ii) has taken any action that could result in Purchaser, or
any member, manager, officer, employee, agent or any Affiliate of
Purchaser, being subject to any claim for liability under this
Agreement or any Ancillary Agreement. No agent, broker, finder, investment banker,
financial advisor or other similar Person will be entitled to any
fee, commission or other compensation in connection with this
Agreement or any Ancillary Agreement on the basis of any act or
statement made or alleged to have been made by Seller,-62-
Shareholder,
 any Affiliate thereof, or any investment banker, financial advisor, attorney,
 accountant,                      or other Person retained by or acting for Seller,
Shareholder or any such Affiliate.4.14
Restrictions
on Conduct of Business. Seller is not prohibited or restricted from conducting the
Business (as presently conducted and as intended in the future to be
conducted) by any Contract, any Order, Governmental or Regulatory
Authority or Law.4.15
Entire
Business. The Sale Assets are all related to and used in connection with the
Business and are sufficient to conduct the Business (as
previously conducted and as intended in the future to be conducted). No Person
(including Shareholder) other than Seller owns or has any right,
title or interest in any of the Sale Assets and the Sale Assets
constitute all of the Assets and Properties of Seller used in connection with the
Business. Shareholder does not, either directly or through any
ownership of any Equity Interest or other business interest in any
Person directly or indirectly competing with the Business. For greater certainty,
the Shareholders position as a director of VRS Inc. does not
breach this Section 4.15.4.16
Absence
of Certain Business Practices. Neither Seller or any of Sellers shareholders,
directors, officers, employees or agents, nor any other Person
acting on their behalf, has directly or indirectly, within the past five (5) years
(i) given or agreed to give any contribution, gift or similar
benefit to or for the private use of or at the direction of any
customer, client, supplier, governmental employee or other Person who is or may
be in a position to help or hinder Sellers business (or
assist Seller in connection with any actual or proposed
transaction) that (A) might subject Seller to any damage or
penalty in any Action in any jurisdiction, (B) if not given in the
past, might have had an adverse effect on the Condition of Seller or the Business or (C)
if not continued in the future, might adversely affect the
Condition of Seller or the Business, (ii) established or
maintained any unrecorded fund or asset for any purpose, or made
any false or artificial entries on the books of account of Seller
for any reason; or (iii) made any payments to any Person with the intention or
understanding that any part of such payment was to be used for
any other purpose than that described in the documents
supporting the payment.4.17
Customers
and Suppliers.4.17.1
Set
forth on Schedule 4.17.1 are the names and addresses of the customers of the Business.4.17.2
With
respect to the Business, no supplier or customer has cancelled or otherwise terminated,
or threatened to cancel or otherwise terminate, its relationship with Seller, or has
during the last 12 months, decreased or limited materially or threatened to decrease or
limit materially, its services, supplies or materials to Seller or its usage of the RSDL
Products, as the case may be. Seller has not received any notice that any such supplier
or customer intends to cancel or otherwise modify its relationship-63-
with
Seller and Seller has no Knowledge that the assignment of the Sale Assets to Purchaser
will adversely affect the relationship of any such supplier or customer with the
Business. All services and/or products provided by Seller have been provided in
accordance with recognized industry standards and Seller does not have, nor will it have,
any Liability to any Person with respect to any services performed and/or products
manufactured prior to the Closing Date.4.18
Title.
Seller has good and marketable title to all of the Sale Assets, free and clear of all
Liens and Liabilities (other than the Assumed Obligations) and
upon transfer of the Sale Assets to Purchaser as provided herein, Purchaser
shall have good and marketable title thereto, free and clear of
all Liens and Liabilities (other than the Assumed Obligations).4.19
Licenses.
The only License necessary or beneficial for the carrying on of the Business and
the ownership of the Sale Assets is the RSDL License Agreement.
The RSDL License Agreement is valid, binding and in full force and effect
and Seller has not received any notice that it is in default (or
with the giving of notice or the lapse of time or both, would be in
default).4.20
Solvency.
Sellers Assets and Properties exceed its Liabilities and Seller is able to pay its
obligations as they come due in the ordinary course of business.
There has not been filed any petition or application, or any proceeding
commenced which has not been discharged, by or against Seller
with respect to any Assets and Properties of Seller under any Law
relating to bankruptcy, reorganization, fraudulent transfer, compromise,
arrangements, insolvency, readjustment of debt or creditors rights,
and no assignment has been made by Seller for the benefit of
creditors.4.21
Disclosure
Regarding Seller and the Business. No representation or warranty contained in this
Agreement or any Ancillary Agreement, and no statement contained
in any Schedule hereto or thereto or in any certificate, list or other
writing furnished to Purchaser pursuant to any provision of this
Agreement or any Ancillary Agreement contains any untrue
statement of a material fact or omits to state a material fact necessary in order
to make the statements herein or therein, in the light of the
circumstances under which they were made, not misleading. There
is no fact concerning the Business which Seller or Shareholder has not disclosed to
Purchaser in writing which materially and adversely affects (or may
materially or adversely affect) the Business or its Condition.5.
REPRESENTATIONS
AND WARRANTIES OF PURCHASERPurchaser
hereby represents and warrants to Seller as follows:



5.1
Organization.
Purchaser is a corporation duly organized, validly existing and in good standing
under the Laws of the State of Delaware.-64-
5.2
Power
and Authority. Purchaser has full corporate power and authority to execute and
deliver this Agreement and the Ancillary Agreements to which it
is a party and to perform its obligations hereunder and thereunder and to
consummate the transactions contemplated hereby and thereby.
The execution and delivery by Purchaser of this Agreement and the
Ancillary Agreements to which it is a party, and the performance by Purchaser
of its obligations hereunder and thereunder, have been duly and
validly authorized by all necessary corporate action. This
Agreement and the Ancillary Agreements to which it is a party have been duly and
validly executed and delivered by Purchaser and constitute
legal, valid and binding obligations of Purchaser enforceable against
Purchaser in accordance with their respective terms.5.3
Governmental
Approvals and Filings. No consent, approval or action of, filing with or notice to
any Governmental or Regulatory Authority on the part of
Purchaser is required in connection with the execution, delivery and
performance of this Agreement or the Ancillary Agreements to
which it is a party or the consummation of the transactions
contemplated hereby or thereby.5.4
Legal
Proceedings. There are no Actions or Proceedings pending or, to the Knowledge of
Purchaser, threatened against, relating to or affecting
Purchaser or any of its Assets and Properties that could reasonably be expected to
result in the issuance of an Order restraining, enjoining or
otherwise prohibiting or making illegal (i) the consummation of
any of the transactions contemplated by this Agreement or any of the Ancillary
Agreements to which it is a party.5.5
Other
Negotiations; Brokers. Neither Purchaser, any Affiliate thereof, or any investment
banker, financial advisor, attorney, accountant or other Person
retained by or acting for or on behalf of the Purchaser or any such
Affiliate, (i) has entered into a Contract that conflicts with
this Agreement or any Ancillary Agreement to which it is a party,
or (ii) has taken any action that could result in Seller, Shareholder, or any Affiliate
of Seller, being subject to any claim for liability as a result of
entering into this Agreement or any Ancillary Agreement to which
it is a party. No agent, broker, finder, investment banker, financial advisor or
other similar Person will be entitled to any fee, commission or
other compensation in connection with this Agreement or any
Ancillary Agreement on the basis of any act or statement made or alleged to have been
made by Purchaser, any Affiliate thereof, or any investment
banker, financial advisor, attorney, accountant or other Person
retained by or acting for Purchaser or any such Affiliate.5.6
Liability
Insurance. For a period equal to the earlier of (a) three years from the last
installment of the Royalty Payment pursuant to Section
2.5(a)(vi)(A) and (b) seven years from the date hereof, Purchaser or an Affiliate
shall maintain product liability insurance relating to the RSDL
Products or any New Products in an amount consistent with current
practice and shall include Seller as a named insured on any such policy.-65-
6.
LABOR
AND EMPLOYMENT MATTERSNotwithstanding
anything herein to the contrary, Purchaser shall have no obligation to (i) offer
employment to any employee of Seller or (ii) make any severance payment or make any other
payment or provide any benefit to any employee of Seller. Furthermore, Purchaser and
Seller agree that Purchaser shall assume no responsibility of any kind for any
Liabilities directly or indirectly related to employees of Seller (Labor Claims),
including any costs concerning Sellers employees, their employment, or the
termination of their employment, the cost of separation, severance, termination benefits,
any employee benefits, compensation, or remuneration, or any Liabilities for wages,
bonus, or other employee compensation of any nature and any obligations incurred in
connection with any benefit plan of Seller. Additionally, Purchaser shall be under no
obligation with respect to and any amounts payable in connection with any sales
representative agreements (including the termination thereof) to which Seller is a party.



7.
CONSULTING
SERVICES7.1
Engagement.
Purchaser shall engage the consulting services of Shareholder (the Services)
on the terms and conditions set forth in this Section 7.1 for a
period of three (3) years commencing on the date hereof (unless
earlier terminated as provided herein) (the Consulting Term).
Shareholder hereby accepts such appointment and agrees faithfully
to render the Services and to promote the interest of the Company to the best of his
ability. Shareholder shall perform the Services with the highest
level of care, skill and diligence and shall use sound and
professional principles and practices, in compliance with all applicable laws,
regulations, rules, codes and standards. Purchaser and
Shareholder hereby agree that certain of the consulting work provided with respect to
the Software License as described in Section 7.13 may be performed
by Seller.7.2
Time
Commitment; Duties. Shareholder agrees to provide Purchaser with consulting
services in accordance with the following:(i)
one
hundred seventy-five (175) days in year 1 of the Consulting Term;(ii)
one
hundred thirty-five (135) days in year 2 of the Consulting Term; and(iii)
one
hundred (100) days in year 3 of the Consulting Term.Shareholders
duties shall include such functions and duties as he may be required to fulfill from time
to time by Purchaser and its Board of Directors relating to the commercialization of the
RSDL Technology and the development and application of new products, including the New
Products. Shareholder shall make himself available to the Company on such days during the
Consulting Term as Purchaser may reasonably require. Shareholder shall perform the
Services directly and shall not-66-
enter
into any subcontract with respect to the Services without the approval of Purchaser.7.3
Independent
Contractor.(a)
Shareholder
 is and shall remain at all times an independent  contractor and is not, and shall not
represent  himself to be                                           an agent, joint
venturer,  partner or employee of Purchaser or to be related to Purchaser in
                                          any fashion other than as an independent
 contractor.  Shareholder  agrees that it shall not
                                          make  any  representations  or  engage  in  any
 acts  which  could  establish  an  apparent
                                          relationship  of agency,  joint  venture,
 partnership  or employment  with  Purchaser.  For
                                          greater  certainty,  Purchaser shall not be
bound in any manner whatsoever by any agreement,
                                          warranties or representations  made by
Shareholder to any other person, firm or Purchaser or
                                          by any action of Shareholder,  except where
Shareholder has first obtained the prior written
                                          consent of Purchaser.  Nothing  contained in
this  Section 7 is intended to create nor shall
                                          be construed as creating an employment
relationship between Shareholder and Purchaser.(b)
Shareholder
 recognizes that he has the sole responsibility as an independent contractor to comply
with all requirements of                                           applicable  laws,
 rules  and  regulations.  Purchaser  shall  not  make any  deductions  or
                                          withholdings  for pension plans,  employment
 insurance,  taxes or any other similar amounts
                                          from the  Consulting  Fee. It is agreed that
 Shareholder  shall be solely  responsible  for
                                          deducting all applicable Taxes,  pension plan
deductions,  employment insurance premiums and
                                          all  other  relevant  deductions  from  the
 Consulting  Fee and for  remitting  same to any
                                          government  authorities  as may be prescribed
by law.  Shareholder  hereby  indemnifies  and
                                          holds  harmless  Purchaser  from and against
 all  payments  or  remittances  made and costs
                                          incurred by  Purchaser  in the event that
 Purchaser  is  required  to make any  payments or
                                          remittances  in respect of the  deductions  and
 withholdings  referred  to in this  Section
                                          7.3(b),  including but not limited to any Taxes
or other costs imposed directly on Purchaser
                                          with respect to the Consulting Fee.(c)
As
an independent contractor, Shareholder shall not be entitled to any employment related
benefits other than as set forth in this Agreement. With the exception of the Consulting
Fee, Shareholder shall have no claim or cause of action against Purchaser for any cause,
matter or thing including, without limitation, any claim or cause of action arising out
of any alleged employment relationship between Shareholder and Purchaser (which
specifically includes any claim for notice, pay in lieu of notice, severance or vacation-67-
pay,
whether arising by statute or otherwise). It is agreed that the provisions of this
paragraph shall survive the termination of this Agreement and shall remain binding on
Shareholder.7.4
Confidential
Information.(a)
Shareholder
 acknowledges that the nature of Shareholders services to Purchaser is such that
Shareholder shall have access                                           to  information
 of a  confidential  and/or  trade  secret  nature  which has great value to
                                          Purchaser and which  constitutes a substantial
 basis and foundation upon which the business
                                          of Purchaser is based. Such information
 includes,  without  limitation,  (i) trade secrets,
                                          inventions,  ideas,  source and object codes,
 data,  programs,  other works of  authorship,
                                          know-how;  (ii) information  regarding
 marketing and selling,  business plans,  budgets and
                                          unpublished  financial  statements,  licenses,
 prices and costs,  suppliers and  customers;
                                          (iii) information  regarding the skills and
compensation of other employees Purchaser or its
                                          affiliates,  including  but not  limited  to,
 their  respective  business  plans or clients
                                          (including,  without  limitation,   customer
 lists  and  lists  of  customer  sources),  or
                                          information  relating to the products,
 services,  customers,  sales or business  affairs of
                                          Purchaser or its affiliates (the Confidential
Information)(b)
Shareholder
 shall  keep all such  Confidential  Information  in  confidence  during  the  Consulting
 Term and at any time                                           thereafter and shall not
disclose any of such Confidential  Information to any other person,
                                          except to the extent such  disclosure  is (i)
necessary to the  performance  of the Services
                                          and in furtherance of Purchasers  best
 interests,  (ii) required by applicable  law, (iii)
                                          lawfully  obtainable  from other sources,  or
(iv) authorized in writing by a senior officer
                                          or the  Board of  Directors  of  Seller.  Upon
 termination  of  Shareholders  services  to
                                          Purchaser,  Shareholder shall deliver to
Purchaser all documents,  records,  notebooks, work
                                          papers,  and all similar  material  containing
 any of the  foregoing  information,  whether
                                          prepared by Shareholder, Purchaser or anyone
else.7.5
Improvements
and Inventions.(a)
Shareholder
agrees that any improvements, revisions, modifications, discoveries, inventions,
derivative works, enhancements, line extensions, new applications for or changes to the
RSDL Technology, whether patented or patentable or otherwise protectable (the Improvements)
created or developed by Shareholder during the Consulting Term shall be the property of
Purchaser and Purchaser shall be the sole owner of all right, title and interest in such
Improvements and Shareholder shall have no-68-
right,
title or interest in such Improvements. Shareholder agrees to transfer and assign any
such Improvements to Purchaser without payment of any compensation or royalty. For
greater certainty, the items listed in Schedule 7.5 form part of the Improvements.(b)
The
 parties  agree that any  discoveries,  developments,  inventions,  ideas,  concepts,
 products,  whether  patented  or                                           patentable
 or  otherwise  protectable  (the Inventions),   relating  to
 decontamination                                           created or developed by
Shareholder  during the Consulting Term that do not form part of the
                                          RSDL Technology  shall be the property of
Purchaser and Purchaser shall be the sole owner of
                                          all right,  title and interest in such
Inventions and Shareholder shall have no right, title
                                          or interest in such  Inventions.  Shareholder
 shall transfer and assign any such Inventions
                                          to Purchaser.  In the event that Purchaser
 sells an Invention or a product  derived from an
                                          Invention created or developed by Shareholder
(a New Product) and,(i)
such
New  Product is covered by a valid U.S.  patent,  Purchaser  shall pay to  Shareholder  a
royalty fee of 4% of the Net                                                Sales of such
New Product for a period of seven (7) years  beginning on the date of the
                                               first commercial sale of such New Product,
 payable  quarterly  within  forty-five (45)
                                               days of the end of each quarter of
Purchaser; or(ii)
such
New Product is not covered by a valid U.S.  Patent,  Purchaser shall pay to Shareholder a
royalty fee of 2% of the Net                                                Sales of such
New Product for a period of seven (7) years  beginning on the date of the
                                               first commercial sale of such New Product,
 payable  quarterly  within  forty-five (45)
                                               days of the end of each quarter of
Purchaser.(c)
In
connection with any Improvement or Inventions,  Shareholder  further agrees to cooperate
and provide  Purchaser with any                                           information
 necessary to assist in the prosecution of any patent applications and to timely
                                          execute any papers or documents necessary to
file patent applications.(d)
In
the event that  Purchaser  sells a New Product that was  identified  and  introduced  to
Purchaser by  Shareholder  (but                                           developed or
created by a third party) during the Consulting  Term,  Purchaser  shall pay to
                                          Shareholder  a royalty  fee of 2% of the Net
Sales of such New Product for a period of seven
                                          (7) years beginning on the date of the first
 commercial  sale of such New Product,  payable
                                          quarterly within forty-five (45) days of the
end of each quarter of Purchaser.-69-
(e)
Until
the later of the end of the RC Term or the month in which the  payment of the last
 payment of  Royalty  Payments  is                                           made,
 Shareholder  agrees to  provide  Purchaser  with  prompt  notice of the  creation  or
                                          development of any Improvements or Inventions
and of the  identification of any New Products
                                          created or developed by third parties.7.6
Single
Royalty Payment. For greater certainty, in no circumstances shall Shareholder be
entitled to a royalty payment pursuant to Section 7.5(b) with
respect to a RSDL Product or a New Product if at that time the Shareholder is
already entitled to a Royalty Payment pursuant to Section 2.5(a)(vi)
with respect to such product.7.7
Expenses.
Purchaser shall reimburse Shareholder for all reasonable travel and lodging
expenses incurred or paid by Shareholder in the course of the
performance of the Services, upon presentation by Shareholder of documentation,
expense statements, vouchers and/or such other supporting
information as Purchaser may reasonably request. Notwithstanding
the foregoing, any expense to be incurred by Shareholder in excess of Two Thousand
Dollars ($2,000.00) must be pre-approved by Purchaser, and
Shareholder hereby agrees to provide Purchaser with any
documentation required in connection therewith. For greater
certainty, Shareholder shall be entitled to fly business class
on overseas flights and stay in the hotel that is hosting any relevant trade show or
conference, if available; provided, however that Shareholder
shall be required to take reasonable steps to purchase a
reasonably priced business class ticket.7.8
Restrictive
Covenant.7.8.1
Each
of Seller and  Shareholder  agrees that during the period from the date of this
 Agreement  through the seventh  (7th)                                anniversary of the
Closing Date (the RC Term):(a)
neither
Seller nor Shareholder, or any of their Affiliates, shall directly or indirectly, own,
finance, manage, operate, control or participate in the ownership, financing, management,
operation or control of, be a beneficiary of, be employed by, have any equity interest
(whether stock, a partnership interest, a limited liability company interest, a trust
interest or otherwise) in, be an officer of, be a participant in, joint venture or
partnership with, contract with or be associated or connected in any capacity or in any
manner with, or guarantee the obligations of, any Person engaged in or planning to become
engaged in, any business that is directly or indirectly (whether through Affiliates or
otherwise) manufactures, markets, sells, offers for sale, promotes or distributes any
decontamination products in the Territory; provided, however, that this Section 7.8.1(a)
shall not prevent Seller or Shareholder from owning stock in and Shareholder from acting
as a director of VRS-70-
or
owning less than 1% of the stock of any publicly traded company;(b)
neither
Seller nor Shareholder, or any of their Affiliates, shall directly or indirectly,
 manufacture, market, sell, offer                                           for sale,
 promote or distribute any product for or on behalf of any Person that directly or
                                          indirectly  manufactures,  markets,  sells,
 offers for sale,  promotes or  distributes  any
                                          decontamination products in the Territory; and(c)
neither
Seller nor Shareholder, or any of their Affiliates, shall directly or indirectly,
 manufacture, market, sell, offer                                           for sale,
 promote or distribute any product that is a derivative or variation of any of the
                                          RSDL  Products  for or on behalf of any Person
 that  directly or  indirectly  manufactures,
                                          markets,  sells,  offers for sale,  promotes
 or  distributes  any of the  foregoing  in the
                                          Territory.7.8.2
In
the case of New Products,  each of Seller and  Shareholder  agrees that for a period of
seven years from the date of the                                first  commercial sale of
a New Product,  neither Seller nor Shareholder,  or any of their  Affiliates,
                               shall directly or indirectly,  manufacture,  market,
 sell,  offer for sale,  promote or distribute any                                product
 that is a derivative  or  variation  of such New Product,  for or on behalf of any
Person that                                directly or indirectly  manufactures,
 markets,  sells, offers for sale, promotes or distributes any of
                               the foregoing in the Territory.7.9
Non-Solicitation.7.9.1
Except
as permitted in writing by Purchaser, each of Seller and Shareholder agrees that:(a)
during
the RC Term,  neither Seller nor Shareholder,  or any of their Affiliates,  shall
directly or indirectly  supervise,                                           manage,
hire, cause to be hired or otherwise induce any employee, consultant,  contractor or
                                          any  other  Person  otherwise  in the  service
 of or  remunerated  by  Purchaser  (each,  a Prohibited  Worker) to
leave the employment of Purchaser or induce any  Prohibited  Worker
                                          to terminate his, her or its engagement with
Purchaser; or(b)
for
a period of thirty-six (36) months following the last month in which Royalty  Payments
are paid to the Seller,  neither                                           Seller nor
Shareholder,  or any of their Affiliates shall directly or indirectly  supervise,
                                          manage,  hire or cause to be hired  any
 Prohibited  Worker  for any  reason,  or  otherwise
                                          interfere with any such Prohibited Workers
employment with Purchaser.-71-
7.10
No
Appropriation of Diversion of Business.Each
of Seller and Shareholder agree that during the RC Term, neither Seller, Shareholder nor
any of their Affiliates shall directly or indirectly appropriate, divert or assist any
other Person to appropriate or divert any business or customer away from Purchaser or its
Affiliates (or attempt to do any of the foregoing).


7.11
Remedies.7.11.1
In
the event of a breach of this Section 7, if Seller,  Shareholder or any of their
Affiliates is prevented by a court from                                committing any
further violation,  whether by a temporary  restraining order,  injunction or otherwise,
                               the time periods set forth in this Agreement (for Seller
and all of its  Affiliates)  shall be computed                                by
 commencing  the periods on the date of the  applicable  court order and  continuing
 them from that                                date for the full period provided.7.11.2
The
parties  hereto  agree that the  services to be rendered by  Shareholder  pursuant to
this Section 7 and the rights and                                privileges  granted to
 Purchaser  pursuant to this Section 7 are of a special,  unique,  extraordinary
                               and intellectual  character,  which gives them a peculiar
value, the loss of which cannot be reasonably                                or
adequately  compensated  in damages in any action at law, and that the breach by
 Shareholder of any                                of the  terms of this  Section 7  will
 cause  Purchaser  great  and  irreparable  injury  and  damage.
                               Shareholder hereby expressly agrees that Purchaser shall
be entitled to:(a)
without
the necessity for posting any bond, (i) an injunction or injunctions to prevent  breaches
of the provisions of this                                           Agreement,  (ii)
enforce  specifically this Agreement and the terms and provisions hereof in
                                          any Action instituted in any court having
 jurisdiction over Seller, and (iii) apply for any
                                          other equitable relief available to Purchaser;
and(b)
any
other remedy to which Purchaser or its Affiliates may be entitled pursuant hereto or
otherwise.For
greater certainty, the remedies in this Section 7.11 are in addition to any remedies of
the Purchaser pursuant to Section 9.7.12
Reasonableness.
Seller and Shareholder agree that the covenants contained in Sections 7.8, 7.9 and
7.10 are reasonable with respect to their duration, geographic area
and scope.7.13
License
Agreement. Seller and Shareholder hereby grant to Purchaser a non-exclusive, worldwide,
perpetual, irrevocable, royalty-free license (the Software License) to
use, copy, distribute, display, sublicense, sell, offer to sell and rent the proprietary
software owned or used by Seller and/or Shareholder that is necessary to complete all
reporting requirements under the U.S. Government Contract. For a period of three years
from the date hereof, at the request of-72-
Purchaser,
Seller and/or Shareholder shall provide Purchaser with training, maintenance and support
(collectively, Support) with respect to the Software License. Seller
and/or Shareholder shall also provide Purchaser with any updates or improvements made to
such software. The hours spent by Seller and/or Shareholder providing Support shall be
counted towards the required consulting hours in Section 7.2. Seller and/or Shareholder
shall not be entitled to any compensation for providing the Support or any updates or
improvements.8.
SURVIVAL
OF REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTSNotwithstanding
any right of Purchaser (whether or not exercised) to investigate the Business, the
affairs of Seller or the accuracy of the representations and warranties of Seller
contained in this Agreement and the Ancillary Agreements, Purchaser has the right to rely
fully upon the representations, warranties, covenants and agreements of Seller contained
in this Agreement and the Ancillary Agreements. The representations, warranties,
covenants and agreements of Purchaser and Seller contained in this Agreement and the
Ancillary Agreements shall survive the Closing (a) until the second anniversary of the
Closing Date with respect to all representations and warranties and any covenant or
agreement to be performed in whole or in part on or prior to the Closing (other than the
representations and warranties contained in Sections 4.1, 4.3 and 4.18, which shall
survive forever; representations and warranties contained in Section 4.8, which shall
survive until 60 days following the longest applicable statute of limitations contained
in the Code has expired; or (b) with respect to each other covenant or agreement
contained in this Agreement, indefinitely, and no party shall have any liability pursuant
to Section 9 with respect to any representation, warranty, covenant or agreement after it
terminates pursuant to this Section 8, except that any representation, warranty, covenant
or agreement that would otherwise terminate in accordance with clause (a) will continue
to survive if notice is given to the other party on or prior to such termination date,
until the related claim for indemnification has been satisfied or otherwise resolved.



9.
INDEMNIFICATION9.1
Indemnification
by Seller and Shareholder. Seller and Shareholder hereby jointly and severally agree
to indemnify and to hold Purchaser and its respective
shareholders, directors, managers, officers, employees and agents,
subsidiaries and affiliates (the Indemnified Persons)
harmless from, against and in respect of, and shall on demand
reimburse the Indemnified Persons for, any and all Loss suffered or incurred by any of
them in connection with or arising from:(a)
any
breach by Seller or  Shareholder  of any of its or his covenants or  agreements  in this
 Agreement or in any Ancillary                                           Agreement;(b)
any
 failure  by Seller or  Shareholder  to  perform  any of its or his  obligations  in this
 Agreement  or any  Ancillary                                           Agreement;-73-
(c)
any
breach of any warranty or the inaccuracy of any representation of Seller or Shareholder
 contained in this Agreement or                                           in any
Ancillary Agreement;(d)
any
third party claim in  connection  with any RSDL  Product  manufactured  or sold or
services  performed  by Seller on or                                           before
 the  Closing  Date,  except  those  claims  relating  solely to a defect in any RSDL
                                          Product as a result of the  manufacturing of
such RSDL Product (as oppose to a defect in the
                                          design or specifications);(e)
any
Liabilities of Seller other than the Assumed Obligations;(f)
any
 Liabilities  relating to the Business to the extent based upon or resulting from actions
or omissions  occurring on or                                           prior to the
Closing Date other than the Assumed Obligations;(g)
(i)
any and all Taxes  imposed on Seller,  or for which  Seller is liable,  (ii) all Taxes
 arising  out of a breach of the
                                          representations  and  warranties  or  covenants
 contained  in  Section 4, (iii) any and all
                                          Liabilities  which may be  asserted  as a
result  of  Sellers  noncompliance  with any bulk
                                          transfer or bulk sales Law and (iv) any costs
or expenses with respect to Taxes  indemnified
                                          hereunder;(h)
any
Labor Claim; and(i)
any
 Liabilities  relating to the Business  arising after the Closing Date resulting  from
the gross  negligence or willful                                           misconduct of
Shareholder and/or Seller during the Consulting Term.9.2
Set-Off.
Purchaser shall be entitled to set off any amounts owing by Seller and/or
Shareholder pursuant to this Agreement, against any amounts owed
to Seller and/or Shareholder pursuant to this Agreement.9.3
Indemnification
by Purchaser. Purchaser hereby agrees to indemnify and to hold Seller and Shareholder
harmless from, against and in respect of and shall on demand reimburse Seller and
Shareholder for any and all Loss suffered or incurred by Seller or Shareholder by reason
of (a) any inaccurate representation, breach of warranty or nonfulfillment of any
covenant or agreement by Purchaser contained herein, in any Ancillary Agreement or in any
certificate, document or instrument delivered to Seller pursuant hereto or thereto or in
connection herewith or therewith, (b) the Assumed Obligations, (c) any Liabilities
relating to the Business to the extent based upon or resulting from actions or omissions
occurring on or after the Closing Date (including any actions taken under Section 2.2),
other than any Liabilities arising as a result of the gross negligence or willful
misconduct of Shareholder and/or Seller during the Consulting Term and (d) any third
party claim in connection with any RSDL Product manufactured-74-
by
Purchaser on or prior to the Closing Date resulting solely from a defect in the
manufacturing of such RSDL Product (as opposed to a defect in the design or
specifications).9.4
Method
of Asserting Claims. All claims for indemnification under Section 9 shall be asserted
and resolved as follows:9.4.1
The
party claiming  indemnification  (the Indemnified Party) in respect
of, arising out of or involving a claim or demand                                made by
a third party against the  Indemnified  Party (a Third Party  Claim)
shall deliver  notice (a Claim Notice) to the other party (the Indemnifying
 Party) as soon as reasonably  practicable after
                               receipt by such Indemnified Party of written notice of the
Third Party Claim;  provided,  however, that                                failure to
give such Claim Notice shall not affect the  indemnification  provided  hereunder  except
to                                the extent the  Indemnifying  Party shall have been
 actually  prejudiced  as a result of such failure.                                The
Indemnifying Party shall promptly mitigate any such prejudice to the extent possible.9.4.2
If
a Third Party Claim is made against an Indemnified Party, the Indemnifying Party shall be
entitled to participate in the defense thereof and, if it acknowledges that as between it
and the Indemnified Party, it is responsible for such Third Party Claim, the Indemnifying
Party may choose to assume the defense thereof with counsel selected by the Indemnifying
Party, which counsel must be reasonably satisfactory to the Indemnified Party. Should the
Indemnifying Party so assume the defense of a Third Party Claim, the Indemnifying Party
shall not be liable to the Indemnified Party for legal expenses subsequently incurred by
the Indemnified Party in connection with the defense thereof, but shall continue to pay
for any expenses of investigation and any Loss suffered. If the Indemnifying Party
assumes such defense, the Indemnified Party shall have the right to participate in the
defense thereof and to employ counsel, at its own expense, separate from the counsel
employed by the Indemnifying Party. If (i) the Indemnifying Party shall not assume the
defense of a Third Party Claim with counsel satisfactory to the Indemnified Party within
five days of any Claim Notice, or (ii) legal counsel for the Indemnified Party notifies
the Indemnifying Party that there are or may be legal defenses available to the
Indemnified Party that are different from or additional to those available to the
Indemnifying Party, which, if the Indemnified Party and the Indemnifying Party were to be
represented by the same counsel, would constitute a conflict of interest for such counsel
or prejudice prosecution of the defenses available to such Indemnified Party, or (iii) if
the Indemnifying Party shall assume the defense of a Third Party Claim and fail to
prosecute such defense with reasonable diligence, then in each such case the Indemnified
Party, by notice to the Indemnifying Party, may employ its own counsel and control the
defense of the Third Party Claim and the Indemnifying Party shall be liable for the
reasonable fees, charges and disbursements of counsel-75-
employed
by the Indemnified Party and the Indemnified Party shall be promptly reimbursed for any
such fees, charges and disbursements, as and when incurred. Whether the Indemnifying
Party or the Indemnified Party controls the defense of any Third Party Claim, the parties
shall cooperate in the defense thereof. Such cooperation shall include the retention and
provision to the counsel of the controlling party of records and information that are
reasonably relevant to such Third Party Claim, and making employees available on a
mutually convenient basis to provide additional information and explanation of any
material provided hereunder. The Indemnifying Party shall have the right to settle,
compromise or discharge a Third Party Claim (other than any such Third Party Claim in
which criminal conduct is alleged) without the Indemnified Partys consent if such
settlement, compromise or discharge (i) constitutes a complete and unconditional
discharge and release of the Indemnified Party, and (ii) provides for no relief other
than the payment of monetary damages and such monetary damages are paid in full by the
Indemnifying Party.9.4.3
If
any Indemnified  Party should have a claim under Section 9 against any Indemnifying
 Party that does not involve a Third                                Party Claim,  the
 Indemnified  Party shall deliver  notice (an Indemnity  Notice)  with
 reasonable                                promptness  to the  Indemnifying  Party.  The
failure by any  Indemnified  Party to give the  Indemnity
                               Notice shall not impair such partys rights hereunder
 except to the extent that an Indemnifying  Party
                               demonstrates  that it has been actually  prejudiced
 thereby.  The  Indemnifying  Party shall  promptly
                               mitigate  any such  prejudice  to the  extent
 practicable.  If the  Indemnifying  Party  notifies  the
                               Indemnified  Party that it does not dispute the claim
described in such Indemnity  Notice,  the Loss in                                the
 amount  specified  in the  Indemnity  Notice  will  be  conclusively  deemed  a
 liability  of the                                Indemnifying  Party  under  Section  9
and  the  Indemnifying  Party  shall  pay  such  amount  to  the
                               Indemnified  Party on demand.  If the  Indemnifying  Party
 disputes its liability with respect to such                                claim,  the
 Indemnifying  Party and the  Indemnified  Party will in good faith  attempt to negotiate
a                                resolution of such dispute.10.
Conditions
Precedent and Termination10.1
Conditions
Precedent to Purchasers Obligation to Close. Purchasers obligation to
purchase the Sale Assets and to take the other actions required to
be taken by Purchaser at the Closing is subject to the satisfaction, at or prior
to the Closing, of each of the following conditions (any of which
may be waived by Purchaser, in whole or in part):10.1.1
Each
of Sellers and Shareholder representations and warranties in this Agreement
shall have been accurate in all material respects as of the date of this Agreement, and
shall be accurate in all material respects as of the time of the Closing as if then made
(except each of the representations and-76-
warranties
in this Agreement that contains an express materiality qualification which shall be
accurate in all respects as of the time of the Closing as if then made).10.1.2
Each
of the covenants and  obligations  that Seller and  Shareholder  are required to perform
or to comply with pursuant to                                this  Agreement at or prior
to the Closing  shall have been duly  performed  and  complied  with in all
                               material respects.10.1.3
Seller
shall have obtained the RSDL Consent and the CCC Consent and such consents shall be in
full force and effect.10.1.4
Seller
and Purchaser shall have met with individuals from US Med Research ACQ Activity (Fort
Deidrich).10.1.5
Seller
shall deliver all other documents required to be delivered pursuant to Section 3.2.10.1.6
Since
the date of this  Agreement,  there shall not have been  commenced or threatened  against
 Purchaser,  or against any                                Affiliate of Purchaser,  any
 proceeding  (i)  involving any challenge to, or seeking  damages or other
                               relief in connection  with,  the  transaction
 contemplated  by this Agreement or (b) that may have the
                               effect of preventing,  delaying,  making  illegal,
 imposing  limitations or conditions on or otherwise
                               interfering with the transactions contemplated by this
Agreement.10.1.7
Neither
the consummation nor the performance of any of the  transactions  contemplated by this
Agreement will,  directly or                                indirectly  (with or  without
 notice or lapse of time),  contravene  or  conflict  with or result in a
                               violation of or cause Purchaser or any Affiliate of
Purchaser to suffer any adverse  consequence  under                                (a)
any  applicable  Law or Order  or (b) any Law or Order  that  has  been  published,
 introduced  or                                otherwise proposed by or before any
governmental body.10.2
Conditions
Precedent to Sellers Obligation to Close. Sellers obligation to sell the
Sale Assets and to take the other actions required to be taken by
Seller at the Closing is subject to the satisfaction, at or prior to the
Closing, of each of the following conditions (any of which may be
waived by Seller in whole or in part):10.2.1
Each
of Purchasers  representations  and warranties in this Agreement shall have been
accurate in all material respects as                                of the date of this
 Agreement  and shall be  accurate in all  material  respects as of the time of the
                               Closing as if then made.10.2.2
All
of the covenants and obligations  that Purchaser is required to perform or to comply with
pursuant to this Agreement at                                or  prior to the  Closing
 (considered  collectively),  and each of  these  covenants  and  obligations-77-
(considered
individually), shall have been performed and complied with in all material respects.10.2.3
Purchaser
shall deliver all the documents required to be delivered pursuant to Section 3.3.10.2.4
There
 shall not be in  effect  any Law or any  injunction  or other  Order  that (a)
 prohibits  the  consummation  of the                                transactions
 contemplated  by this  Agreement  and (b) has been  adopted or issued,  or has
 otherwise                                become effective, since the date of this
Agreement.10.3
Termination
Events. By notice given prior to or at the Closing, subject to Section 10.4, this
Agreement may be terminated as follows:10.3.1
by
Purchaser if a material  breach of any provision of this Agreement has been committed by
Seller or Shareholder  and such                                breach has not been waived
by Purchaser;10.3.2
by
Seller if a material  breach of any provision of this  Agreement has been committed by
Purchaser and such breach has not                                been waived by Seller;10.3.3
by
mutual written consent of Purchaser and Seller; or10.3.4
by
Purchaser if the Closing has not occurred on or before [March] 30, 2005 or such
later date as the parties may agree upon, unless the
Purchaser is in material breach of this Agreement.10.4
Effect
Of Termination. Each partys right of termination under Section 10.3 is in
addition to any other rights it may have under this Agreement or
otherwise, and the exercise of such right of termination will not be an election of
remedies. If this Agreement is terminated pursuant to Section
10.3, (i) Seller shall return the Deposit to Purchaser within 48
hours of such termination and (b) all obligations of the parties under this Agreement
will terminate, except that the obligations of the parties in
this Section 10.4 and Section 12 will survive, provided,
however, that, if this Agreement is terminated because of a breach of this
Agreement by the non-terminating party or because one or more of
the conditions to the terminating partys obligations under this
Agreement is not satisfied as a result of the partys
failure to comply with its obligations under this Agreement,
the terminating partys right to pursue all legal remedies will survive such
termination unimpaired.11.
TAX
PROCEDURES11.1
Conveyance
Taxes. Any documentary, sales, use, stamp or other similar Taxes and recording and
filing fees (including any penalties and interest) incurred in
connection with the transactions contemplated by this Agreement shall be
borne by Seller.-78-
11.2
**Purchase Price Adjustments.**  All  amounts  paid  pursuant to this  Agreement  by one party to
another  party  (other than                      interest  payments,  if any) shall be
treated by such parties for tax purposes as an  adjustment  to the Purchase
                     Price to the extent permitted by Law.12.
MISCELLANEOUS12.1
Notices. All notices,  requests and other communications  hereunder must be in writing and will be
deemed to have been duly                      given only if delivered  personally
 against  written  receipt or by facsimile  transmission or mailed by prepaid
                     first class certified mail, return receipt requested,  or mailed by
overnight courier prepaid,  to the parties at                      the following
addresses or facsimile numbers:If to Seller or Shareholder,
      to: 
                ODell
      Engineering Ltd. 
                28 Hilborn Avenue
      
                Cambridge, Ontario
      
                N1T 1M7 Canada
      
                Facsimile No.:
      (519) 694-9922 
                Attn: Mr. Philip
      C. ODell, P.Eng.
                          President
      
      If to Purchaser, to 
                E-Z-EM, Inc.
      
                1111 Marcus
      Avenue, LL-26 
                Lake Success,
      New York 11590 
                Facsimile No.:
      (516) 302-2918 
                Attn: Anthony
      A. Lombardo 
      with a copy to: 
                Davies Ward
      Phillips & Vineberg LLP 
                625 Madison
      Avenue, 12th Floor 
                New York, New
      York 10022 
                Facsimile No.:
      (212) 308-0132 
                Attn: Steven
      H. Levin, Esq.All
  such notices,  requests and other  communications  will (i) if delivered  personally to
  the address as provided in this Section 12.1, be deemed given upon delivery, (ii) if
  delivered by facsimile transmission to the facsimile number as provided in this Section
  12.1, be deemed given upon receipt, (iii) if delivered by mail in the manner described
  above to the address as provided in this Section-79-
12.1,
be deemed given upon receipt provided that such notice is sent by certified mail and (iv)
if delivered by overnight courier to the address as provided in this Section 12.1, be
deemed given on the earlier of the first Business Day following the date sent by such
overnight courier or upon receipt (in each case regardless of whether such notice,
request or other communication is received by any other Person to whom a copy of such
notice is to be delivered pursuant to this Section 12.1). Any party from time to time may
change its address, facsimile number or other information for the purpose of notices to
that party by giving notice specifying such change to the other party hereto.12.2
Entire
Agreement. This Agreement and the Ancillary Agreements supersede all prior discussions
and agreements between the parties with respect to the subject
matter hereof and thereof and contain the sole and entire agreement between
the parties hereto and thereto with respect to the subject matter
hereof and thereof.12.3
Expenses.
Except as otherwise expressly provided in this Agreement, each party will pay its
own costs and expenses, provided that Purchaser shall pay all sales
Taxes relating to the purchase and sale of the Sale Assets.12.4
Public
Announcements. Seller and/or Shareholder will not issue or make any statements or
releases to the public with respect to this Agreement or the
transactions contemplated hereby without Purchasers consent.12.5
Waiver.
Any term or condition of this Agreement may be waived at any time by the party that
is entitled to the benefit thereof, but no such waiver shall be
effective unless set forth in a written instrument duly executed by or on
behalf of the party waiving such term or condition. No waiver by
any party of any term or condition of this Agreement, in any one
or more instances, shall be deemed to be or construed as a waiver of the same or any
other term or condition of this Agreement on any future occasion.
All remedies, either under this Agreement or by Law or otherwise
afforded, will be cumulative and not alternative.12.6
Amendment.
This Agreement may be amended, supplemented or modified only by a written instrument
duly executed by or on behalf of each party hereto.12.7
Currency.
All references to dollar amounts in this Agreement are references to U.S. dollars.12.8
No
Third Party Beneficiary. The terms and provisions of this Agreement are intended
solely for the benefit of each party hereto and their respective
successors or permitted assigns, and it is not the intention of the parties to
confer third-party beneficiary rights, and this Agreement does not
confer any such rights, upon any other Person other than any Person
entitled to indemnity under Section 9.12.9
Assignment;
Binding Effect. Neither this Agreement nor any right, interest or obligation
hereunder may be assigned (by operation of law or otherwise) by
Seller without the prior written consent of Purchaser and any attempt to do so
will be void.-80-
If
  Purchaser is assigning this Agreement to a Person owning assets having a fair market
  value at such time at more than $25 million, then Purchaser may assign this Agreement
  upon written notice to the Seller, provided that Purchasers assignee assumes (in
  writing) the then-outstanding obligations owing hereunder to Seller. Seller hereby
  consents to any such assignment that includes such an assumption, and acknowledges and
  agrees that such an assumption shall be deemed to effect a novation and a release of
  Purchaser with respect to the obligations so assumed by Purchasers assignee.If
  Purchaser is assigning this Agreement to a Person owning assets having a fair market
  value at such time at $25 million or less (a Covered Assignee), then
  Purchaser may assign this Agreement to such Covered Assignee upon written notice to the
  Seller, provided that the Covered Assignee assumes (in writing) Purchasers
  then-outstanding obligations owing hereunder to Seller. In addition, effective
  concurrently with such assignment to and assumption by the Covered Assignee, if any,
  Purchaser hereby guaranties, as a surety and on a contingent basis (i.e., Seller shall
  first exhaust his remedies against such assignee), the Covered Assignees payment of
  the assumed obligations in favor of Seller. Seller hereby consents to any such assignment
  that includes such an assumption and guaranty, and acknowledges and agrees that
  thereafter, Purchasers sole remaining obligation under this Agreement shall be
  pursuant to the guaranty contained in the preceding sentence.Subject
to the preceding sentences of this Section 12.9, this Agreement is binding upon, inures
to the benefit of and is enforceable by the parties hereto and their respective
successors and assigns.12.10
Headings.
The headings used in this Agreement have been inserted for convenience of reference
only and do not define or limit the provisions hereof.12.11
Invalid
Provisions. If any provision of this Agreement is held to be illegal, invalid or
unenforceable under any present or future Law, and if the rights or
obligations of any party hereto under this Agreement will not be materially
and adversely affected thereby, (a) such provision will be fully
severable, (b) this Agreement will be construed and enforced as if
such illegal, invalid or unenforceable provision had never comprised a part hereof,
(c) the remaining provisions of this Agreement will remain in
full force and effect and will not be affected by the illegal,
invalid or unenforceable provision or by its severance herefrom and (d) in lieu of
such illegal, invalid or unenforceable provision, there will be
added automatically as a part of this Agreement a legal, valid and
enforceable provision as similar in terms to such illegal, invalid or unenforceable
provision as may be possible.12.12
Governing
Law. This Agreement shall be governed by and construed in accordance with the domestic
laws of the State of New York, without giving effect to any
choice of law or conflict of law provision or rule (whether of the-81-
State
of                      New York or any other  jurisdiction)  that would cause the
application of the laws of any jurisdiction other than                      the State of
New York.12.13
Construction.
The parties hereto agree that this Agreement is the product of negotiation between
sophisticated parties and individuals, all of whom were
represented by counsel, and each of whom had an opportunity to participate in
and did participate in, the drafting of each provision hereof.
Accordingly, ambiguities in this Agreement, if any, shall not be
construed strictly or in favor of or against any party hereto but rather shall be given
a fair and reasonable construction without regard to the rule of
      *contra proferentum.*12.14
Counterparts.
This Agreement may be executed in any number of counterparts, each of which will be
deemed an original, but all of which together will constitute one
and the same instrument.12.15
Attorneys Fees.
In the event of any Action arising out of this Agreement, the prevailing party
shall be entitled to recover its reasonable attorneys fees and
expenses from the other party.[The
remainder of this page intentionally left blank.]



-82-
IN
WITNESS WHEREOF, this Agreement has been duly executed and delivered by each party hereto
as of the date first above written.


E-Z-EM,
      INC.
      By: /s/ Anthony A. Lombardo
             
             Name: Anthony A. Lombardo
             Title:   President and
      CEOODELL ENGINEERING LTD.
      By: /s/ Philip C. ODell
             
             Name: Philip C. ODell
             Title:   President/s/ Philip C. ODell
             
                              Philip
      C. ODell-83-