Unassociated Document


    
 

    
      
        

      

    

     

    SHARE
PURCHASE AGREEMENT

     

    BETWEEN

     

    JAG
MEDIA HOLDINGS, INC.,

     

    CARDIOGENICS
EXCHANGECO INC.,

    


    CARDIOGENICS
INC.

     

    AND

     

    YAHIA
GAWAD, PRINCIPAL SHAREHOLDER OF CARDIOGENICS INC.

    
      


      
        

      

       

       

    

    _____________________________

     

    MAY
22, 2009


    
      
         


      

      
        
        

        
          

        

      

      
         


        
        

      

    


    TABLE
OF CONTENTS

    


    
      
        
          
            	 
      	 
      	 
      	
                    Page

                  
	 
      	 
      	 
      	 
      
	
                    ARTICLE 1

                  	
                    INTERPRETATION

                  	
                    2

                  
	 
      	
                    1.1

                  	
                    Definitions

                  	
                    2

                  
	 
      	
                    1.2

                  	
                    Headings
      and References

                  	
                    8

                  
	 
      	
                    1.3

                  	
                    Entire
      Agreement

                  	
                    8

                  
	 
      	
                    1.4

                  	
                    Applicable
      Law

                  	
                    8

                  
	 
      	
                    1.5

                  	
                    Statutes

                  	
                    8

                  
	 
      	
                    1.6

                  	
                    Number
      and Gender

                  	
                    8

                  
	 
      	
                    1.7

                  	
                    Currency

                  	
                    9

                  
	 
      	
                    1.8

                  	
                    Knowledge

                  	
                    9

                  
	 
      	
                    1.9

                  	
                    Annexes

                  	
                    9

                  
	 
      	
                    1.10

                  	
                    Not
      Joint and Several Obligations

                  	
                    9

                  
	 
      	 
      	 
      
	
                    ARTICLE
      2

                  	
                    PURCHASE
      AND SALE

                  	
                    9

                  
	 
      	
                    2.1

                  	
                    Purchase
      and Sale

                  	
                    9

                  
	 
      	
                    2.2

                  	
                    Purchase
      Price

                  	
                    9

                  
	 
      	
                    2.3

                  	
                    Exchangeco
      Consideration for JAG Common Shares

                  	
                    10

                  
	 
      	
                    2.4

                  	
                    Deliveries
      by Company Shareholders

                  	
                    10

                  
	 
      	
                    2.5

                  	
                    Section
      85 Elections

                  	
                    11

                  
	 
      	
                    2.6

                  	
                    Stated
      Capital Account of Exchangeco

                  	
                    11

                  
	 
      	
                    2.7

                  	
                    Registration
      of JAG Common Shares and Exchangeable Shares

                  	
                    11

                  
	 
      	 
      	 
      
	
                    ARTICLE
      3

                  	
                    REPRESENTATIONS
      AND WARRANTIES

                  	
                    11

                  
	 
      	
                    3.1

                  	
                    Representations
      and Warranties of the Company and the Principal
Shareholder

                  	
                    11

                  
	 
      	
                    3.2

                  	
                    Representations
      and Warranties of JAG

                  	
                    22

                  
	 
      	
                    3.3

                  	
                    Qualification
      of Representations and Warranties

                  	
                    30

                  
	 
      	
                    3.4

                  	
                    Non-Waiver

                  	
                    30

                  
	 
      	
                    3.5

                  	
                    Survival
      of Representations and Warranties

                  	
                    30

                  
	 
      	 
      	 
      
	
                    ARTICLE
      4

                  	
                    OTHER
      COVENANTS OF THE PARTIES

                  	
                    31

                  
	 
      	
                    4.1

                  	
                    Access
      and Investigation

                  	
                    31

                  
	 
      	
                    4.2

                  	
                    Operation
      of the Company's Business

                  	
                    31

                  
	 
      	
                    4.3

                  	
                    Operation
      of JAG's Business

                  	
                    32

                  
	 
      	
                    4.4

                  	
                    Delivery
      of Audited Financial Statements by Company

                  	
                    33

                  
	 
      	
                    4.5

                  	
                    Preparation
      of Pro Forma Financials

                  	
                    34

                  
	 
      	
                    4.6

                  	
                    Support
      Agreement and Exchange Rights Agreement

                  	
                    34

                  
	 
      	
                    4.7

                  	
                    Preparation
      and Filing of Acquisition 8-K

                  	
                    34

                  
	 
      	
                    4.8

                  	
                    Delivery
      of Final Form 8-K to Private Placement Investors

                  	
                    34

                  
	 
      	
                    4.9

                  	
                    Preparation
      and Filing of Schedule 14F-1 Information Statement

                  	
                    34

                  
	 
      	
                    4.10

                  	
                    Resignation
      of JAG Executives

                  	
                    34

                  
	 
      	
                    4.11

                  	
                    Consulting
      Agreements with Former JAG Executives

                  	
                    35

                  
	 
      	
                    4.12

                  	
                    Long-Term
      Incentive Plan and S-8 Registration Statement

                  	
                    35

                  
	 
      	
                    4.13

                  	
                    Conversion
      of Company Debentures

                  	
                    36

                  


          

        

      

    


    
      
         


      

      
        -i-

        
          

        

      

      
         


      

    


    TABLE
OF CONTENTS

    (continued)

     

    
      
        
          
            	 
      	 
      	 
      	
                    Page

                  
	 
      	 
      	 
      	 
      
	 
      	
                    4.14

                  	
                    Exchange
      of Company Warrants

                  	
                    36

                  
	 
      	
                    4.15

                  	
                    Exchange
      of Company Options

                  	
                    36

                  
	 
      	
                    4.16

                  	
                    Name
      Change; Post-Closing Information Statement

                  	
                    36

                  
	 
      	
                    4.17

                  	
                    Exchange
      Listing

                  	
                    36

                  
	 
      	
                    4.18

                  	
                    Notification

                  	
                    36

                  
	 
      	
                    4.19

                  	
                    Confidential
      Information

                  	
                    37

                  
	 
      	 
      	 
      
	
                    ARTICLE
      5

                  	
                    CLOSING

                  	
                    38

                  
	 
      	
                    5.1

                  	
                    Closing

                  	
                    38

                  
	 
      	
                    5.2

                  	
                    Exchangeco's
      and JAG’s Conditions

                  	
                    38

                  
	 
      	
                    5.3

                  	
                    The
      Company’s and the Principal Shareholder’s Conditions

                  	
                    40

                  
	 
      	
                    5.4

                  	
                    Waiver

                  	
                    41

                  
	 
      	
                    5.5

                  	
                    Failure
      to Satisfy Conditions

                  	
                    41

                  
	 
      	 
      	 
      
	
                    ARTICLE
      6

                  	
                    INDEMNIFICATION

                  	
                    42

                  
	 
      	
                    6.1

                  	
                    Definitions

                  	
                    42

                  
	 
      	
                    6.2

                  	
                    Indemnification
      by the Company and the Principal Shareholder

                  	
                    42

                  
	 
      	
                    6.3

                  	
                    Indemnification
      by JAG and Exchangeco

                  	
                    43

                  
	 
      	
                    6.4

                  	
                    Agency
      for Representatives

                  	
                    43

                  
	 
      	
                    6.5

                  	
                    Notice
      of Third Party Claims

                  	
                    43

                  
	 
      	
                    6.6

                  	
                    Defence
      of Third Party Claims

                  	
                    44

                  
	 
      	
                    6.7

                  	
                    Assistance
      for Third Party Claims

                  	
                    44

                  
	 
      	
                    6.8

                  	
                    Settlement
      of Third Party Claims

                  	
                    44

                  
	 
      	
                    6.9

                  	
                    Direct
      Claims

                  	
                    45

                  
	 
      	
                    6.10

                  	
                    Failure
      to Give Timely Notice

                  	
                    45

                  
	 
      	
                    6.11

                  	
                    Reductions
      and Subrogation

                  	
                    45

                  
	 
      	
                    6.12

                  	
                    Payment
      and Interest

                  	
                    45

                  
	 
      	 
      	 
      
	
                    ARTICLE
      7

                  	
                    GENERAL

                  	
                    46

                  
	 
      	
                    7.1

                  	
                    Amendment

                  	
                    46

                  
	 
      	
                    7.2

                  	
                    Expenses

                  	
                    46

                  
	 
      	
                    7.3

                  	
                    No
      Finder's Fee

                  	
                    46

                  
	 
      	
                    7.4

                  	
                    Notices

                  	
                    46

                  
	 
      	
                    7.5

                  	
                    Public
      Announcements

                  	
                    48

                  
	 
      	
                    7.6

                  	
                    Assignment
      and Enurement

                  	
                    48

                  
	 
      	
                    7.7

                  	
                    Independent
      Legal Advice

                  	
                    48

                  
	 
      	
                    7.8

                  	
                    Further
      Assurances

                  	
                    48

                  
	 
      	
                    7.9

                  	
                    Counterparts

                  	
                    49

                  
	 
      	
                    7.10

                  	
                    Facsimile
      and E-Mail Execution

                  	
                    49

                  


          

        

      

    


    
      
         


      

      
        -ii-

        
          

        

      

      
         


      

    


     

    THIS SHARE PURCHASE AGREEMENT
made the 22nd day of May, 2009

     

    BETWEEN:

     

    JAG
MEDIA HOLDINGS, INC.,

    a
corporation incorporated under the laws of the State of Nevada

     

    (hereinafter
called "JAG")

     

    -
and -

     

    CARDIOGENICS
EXCHANGECO INC.,

    a
corporation incorporated under the laws of the Province of Ontario,
Canada

     

    (hereinafter
called "Exchangeco")

     

    -
and -

     

    CARDIOGENICS
INC.,

    a
corporation incorporated under the laws of the Province of Ontario,
Canada

     

    (hereinafter
called the "Company")

    


    -and-

    


    YAHIA
GAWAD

    a
resident of Toronto, Ontario, Canada and principal shareholder of CardioGenics
Inc.

    


    (hereinafter
called the “Principal
Shareholder” or “Gawad”)

     

    RECITALS:

     

    
      	
              1.

            	
              Exchangeco
      wishes to purchase all of the issued and outstanding shares of the
      Company.

            


    

     

    
      	
              2.

            	
              The
      Principal Shareholder is the legal and beneficial owner of 64.5% of the
      issued and outstanding common shares of the
  Company.

            


    

     

    
      	
              3.

            	
              The
      Principal Shareholder has agreed to (a) sell to Exchangeco all of the
      Principal Shareholder‘s shares of the Company (the “Principal Shareholder
      Shares” and (b) cause all other shareholders of the Company (the
      “Other Company
      Shareholders”) to sell and deliver to Exchangeco all of their
      shares in the Company in accordance with the terms of this Agreement (the
      “Remaining
      Company Shares”). The Principal Shareholder and the Other Company
      Shareholders are referred to collectively as the “Company
      Shareholders”).

            


    


    
      
         


      

      
         


        
          

        

      

      
         


        -
2 - 

      

    

     

    
      	
              4.

            	
              The
      respective boards of directors of JAG, Exchangeco and the Company
      have approved this Agreement.

            


    

     

    IN CONSIDERATION of the
premises and the respective agreements in this Agreement, and of other
consideration (the receipt and sufficiency of which are acknowledged by each
party), the parties agree as follows:

     

    ARTICLE 1

    INTERPRETATION

     

    
      	
              1.1 

            	
              Definitions

            


    

     

    In this
Agreement and the Recitals hereto:

     

    "Affiliate" means any person
or entity that controls, is controlled by or is under common control of another
person or entity; and "controlled" means ownership
of an equity interest in such entity greater than 50%;

     

    "Agreement" means this share
purchase agreement including all attached annexes, as the same may be
supplemented, amended, restated or replaced from time to time;

     

    "Applicable Law" means any
domestic or foreign statute, law (including the common law), ordinance, rule,
regulation, restriction, regulatory policy or guideline, by-law (zoning or
otherwise), or Order, or any consent, exemption, approval or license of any
Governmental Authority, that applies in whole or in part to JAG, Exchangeco, the
Company, the Company Shareholders, the Business or the way the Business is
carried on;

     

    "Assets" means all of the
assets, real and personal, tangible and intangible, and undertaking of the
Company, including those tangible and intangible assets reflected in the
Financial Statements;

     

    "Benefit Plans" means all
bonus, deferred compensation, incentive compensation, share purchase and share
option, severance or termination pay, medical or dental benefits, life or other
insurance, disability, vacation, employee assistance, pension, retirement, and
each other employee benefit plan or agreement (whether oral or written)
sponsored, maintained or contributed to or required to be contributed to by the
Company for the benefit of any of the employees of the
Business;


    
      
         


      

      
         


        
          

        

      

      
         


        - 3
- 

      

    

     

    "Books and Records" means the
accounting records and all books, records, books of account, sales and purchase
records, lists of suppliers and customers, credit and pricing information,
formulae, business, engineering and consulting reports and research and
development information and plans and projections of or relating to the Company
or the Business and all other documents, files, records, correspondence, and
other data and information, financial or otherwise, which are relevant to the
Company or the Business, including all data and information stored
electronically or on computer related media;

     

    "Business" means the business
carried on by the Company, which includes the research, development and
distribution of products targeting the immunoassay segment of the in vitro
diagnostics testing market, such as the Company’s QL Care Analyzer and its
battery of cardiovascular tests and the Company’s proprietary paramagnetic
beads;

     

    "Business Day" means a day
other than a Saturday, Sunday, or statutory or civic holiday in Toronto,
Ontario;

     

    "Callco" means CardioGenics Callco Inc., a
corporation organized under the laws of the province of Ontario,
Canada;

     

    "Canadian Securities Laws"
means the Securities
Act (Ontario) and any other Canadian securities rules, regulations, laws,
national instruments or policies;

     

    "Closing" means the completion
of the sale to, and purchase by, Exchangeco of the Shares, and the completion of
all other transactions contemplated by this Agreement which are to occur
contemporaneously with the purchase and sale of the Shares;

     

    "Closing Date" means June 30,
2009 or such other date as JAG and the Company agree in writing that the Closing
shall take place;

     

    "Closing Document" means any
document delivered at or subsequent to the Closing Time, including any document
as provided in or pursuant to this Agreement;

     

    "Closing Time" means 2:00 p.m.
on the Closing Date or such other time on that date as the parties agree in
writing that the Closing shall take place;

     

    “Company Debenture” has the
meaning ascribed to that term in Section 3.1.2

     

    “Company Disclosure Schedule”
means the disclosure schedule to be provided by the Company and the Principal
Shareholder to Exchangeco and JAG, on a date prior to the Closing to be agreed
upon by JAG and the Company;

     

    “Company Options” has the
meaning ascribed to that term in Section 3.1.2

     

    “Company Shareholders” has the
meaning ascribed to that term in the Recitals;


    
      
         


      

      
         


        
          

        

      

      
         


        - 4
- 

      

    

     

    “Company Shareholder Exchange
Election” means the notice to be provided by each Company Shareholder in
accordance with Section 2.4.2 of this Agreement and pursuant to  which
each Company Shareholder shall irrevocably elect to receive either JAG Common
Shares or Exchangeable Shares in exchange for their Purchased
Shares;

     

    “Company Shareholder Exchange
Notice” means the notice in the form contained in Annex 1 to be furnished
by each Company Shareholder in accordance with Section 2.4.1 of this
Agreement;

     

    “Company Warrants” has the
meaning ascribed to that term in Section 3.1.2.

     

    "Condition of the Business"
means the condition of the Company including the Assets, liabilities,
operations, activities, earnings, affairs and financial position of the
Company;

     

    "Contracts" means any contract,
arrangement, agreement, license or equipment lease to which the Company is a
party or by which it is bound, or any other obligations of the Company, written
or oral, which, in each case, involve aggregate payments to or by the Company in
excess of $25,000 per annum;

     

    "Contractual Rights" means the
full benefit of all unfilled customer purchase orders, quotations, tenders for
contracts which remain open for acceptance, and entitlements and engagements to
which the Company is entitled, whether written or oral, including any deposits
made in connection therewith, and forward commitments of the Company for
supplies or materials entered into in the ordinary course, which in each case
involve aggregate payments to or by the Company in connection with the Business
in excess of $25,000 per annum;

     

    “Debenture Holder” has the
meaning ascribed to that term in Section 4.13 of this Agreement.

     

    “Debenture Notice” means the
notice to be furnished by the holder of each Company Debenture in accordance
with Section 4.13 of this Agreement.

     

    "Defending Party" has the
meaning ascribed to that term in Section 6.7;

     

    "Encumbrance" means any
encumbrance of any kind whatever and includes a security interest, mortgage,
lien, hypothecation, pledge, assignment, charge, security under Section 426 or
Section 427 of the Bank
Act (Canada), trust or deemed trust or any other right or claim of others
of any kind whatever affecting the Assets and any restrictive covenant or other
agreement, restriction or limitation (registered or unregistered), on the use of
the Assets and any rights or privileges capable of becoming any of the
foregoing;

     

    "Equipment" means all fixed assets and
tangible personal property owned or leased by the Company;


    
      
         


      

      
         


        
          

        

      

      
         


        - 5
- 

      

    

     

    "Exchange Act" means the
Securities and Exchange Act of 1934, as amended, or any successor law and
regulations and rules issued pursuant to that Act or any successor
law;

     

    “Exchange Rights Agreement”
means an agreement among JAG, Exchangeco, and the Company Shareholders acquiring
Exchangeable Shares to be entered into prior to the Closing, but only if deemed
necessary by JAG, Exchangeco and the Company, and which enables Exchangeco to
fulfil its obligations to the Exchangeable Shares shareholders to the extent
such obligations are not addressed in the Support Agreement.

     

    "Exchangeable Shares" means the
exchangeable shares to be created in the capital of Exchangeco;

     

    "Final Determination" means,
with respect to any determination made by a Taxing Authority, a final
determination after all appeal rights with respect to that determination have
been exhausted or all time periods for appeals from that have expired without
appeals having been taken;

     

    “Financial Statements" means
the consolidated financial statements of the Company, prepared in accordance
with U.S. GAAP, consisting of the consolidated balance sheet of the Company for
the fiscal years ended October 31st in each
of the years 2007 and 2008 and the related statements of income and retained
earnings, stockholders’ equity and cash flow, for the years then ended and the
unaudited consolidated financial statements of the Company consisting of the
balance sheet of the Company as at January 31, 2009, and the related statements
of income and retained earnings, stockholders’ equity and cash flow for the
three-month period then ended;

     

    "Governmental Authority" means
any domestic or foreign government whether federal, provincial, state or
municipal and any governmental agency, governmental authority, governmental
tribunal or governmental commission of any kind whatever, including securities
regulators;

     

    "GST" means all goods and
services taxes, sales taxes levied by the federal government of Canada, value
added taxes or multi-stage taxes and all provincial sales taxes integrated with
such federal taxes, assessed, rated or charged upon the Company;

     

    "including" means "including without limitation"
and the term "including"
shall not be construed to limit any general statement which it follows to the
specific or similar items or matters immediately following it;

     

    "Intellectual Property" means the Company's
copyright, software, patents, trade-marks, rights in or to processes, know-how,
show-how, methods, trade secrets, industrial designs, and any other industrial
or intellectual property rights, anywhere in the world, including any of the
forgoing relating to the Company’s QL Care Analyzer and any related tests
(whether or not fully developed), the Company’s proprietary paramagnetic beads
and any other devices, inventions or intellectual property of any kind, whether
or not registered or registrable, including any reissues, divisions,
continuations, continuations-in-part, renewals, improvements, translations,
derivatives, modifications and extensions of any of the
foregoing;


    
      
         


      

      
         


        
          

        

      

      
         


        - 6
- 

      

    

     

    "Inventory" means all
inventories of raw materials, work-in-progress, stock-in-trade, finished goods,
supplies, packaging and advertising and publicity materials of the Company,
wherever located, and whether on consignment or not;

     

    "JAG Common Shares" means all
classes of common stock of JAG, excluding, however, any Series 2 Class B and
Series 3 Class B common stock of JAG;

     

    "JAG Disclosure Schedule" means
the disclosure schedule to be provided by JAG to the Company, on a date prior to
the Closing to be agreed upon by JAG and the Company;

     

    “JAG Executives” means Thomas
J. Mazzarisi and Stephen J. Schoepfer the sole directors and executive officers
of JAG.

     

    "JAG Financial Statements" means
the audited financial statements of JAG as contained in Form 10-K for the year
ended July 31, 2008 and its interim financial statements as set forth on its
Form 10-Q for the three-month period ended January 31, 2009;

     

    “Notice Date” has the meaning
ascribed to that term in Section 2.1.4;

     

    "Notice Period" has the meaning
ascribed to that term in Section 6.6;

     

    "Order" means any written
order, judgment, injunction, decree, award or writ of any court, tribunal,
arbitrator or Governmental Authority;

     

    "ordinary course" when used in
relation to the conduct of the Business means any transaction which constitutes
an ordinary day-to-day business activity of the Company conducted in a
commercially reasonable and businesslike manner consistent with the Company's
past practices;

     

    “Other Company Shareholders”
has the meaning ascribed to that term in the Recitals.

     

    "Per Share Purchase Price" has
the meaning ascribed to that term in Section 2.2;

     

    "Pre-Closing Period" has the
meaning set forth in Section 4.1(a);

     

    "Prime Rate" means the rate of
interest per annum established by the TD Bank from time to time as the reference
rate of interest for the determination of interest rates that the TD Bank
charges customers of varying degrees of creditworthiness in Canada for Canadian
dollar loans made by it in Canada and payable on demand and referred to as the
"Prime Rate";


    
      
         


      

      
         


        
          

        

      

      
         


        - 7
- 

      

    

     

    “Principal Shareholder Shares”
has the meaning ascribed to that term in the Recitals;

     

    "Private Placement" means the
private placement for common shares of the Company in aggregate value not less
than $1,500,000 closing on the Closing Date;

     

    "Purchase Price" means the
purchase price to be paid by Exchangeco to the Company Shareholders as provided
in Section 2.2;

     

    "Purchased Shares" has the meaning ascribed
thereto in Section 2.1;

     

    "Related Party" means any one
of the Company or the Company Shareholders or, if applicable, any member of his
or her immediate family or any Affiliate of the foregoing;

     

    “Remaining Company Shares” has
the meaning ascribed to that term in the Recitals.

     

    "Related Agreements" means the
Support Agreement and Exchange Rights Agreement;

     

    "Representative" means
officers, directors, employees, agents, legal counsel, accountants, advisors and
representatives;

     

    "SEC Documents" has the meaning
set forth in Section 3.2.6;

     

    "Securities Act" means the
Securities Act of 1933, as amended, or any successor law and regulations and
rules issued pursuant to that Act or any successor law;

     

    "Shivas Shares" means the
161,269 common shares of the Company owned by Russell Shivas;

     

    "Support Agreement" means an
agreement between the Company Shareholders acquiring Exchangeable Shares,
Exchangeco and JAG to be entered into prior to the Closing and which enables
Exchangeco to fulfil its obligations to provide JAG common stock pursuant to
the terms of the Exchangeable Shares;

     

    "Taxes" means all taxes and
related governmental charges (including assessments, charges, duties, rates,
fees, imposts, levies or other governmental charges and interest, penalties or
additions associated therewith) including Canadian federal, provincial,
municipal and local, foreign or other income, franchise, capital, real property,
personal property, tangible, withholding, payroll, employer health, transfer,
sales, use, consumption, excise, anti-dumping, countervail and value added
taxes, all other taxes of any kind for which the Company may have any liability
imposed by Canada or any province, municipality, country or foreign government
or subdivision or agency thereof, whether disputed or not and all Canada Pension
Plan contributions and unemployment insurance premiums;


    
      
         


      

      
         


        
          

        

      

      
         


        - 8
- 

      

    

     

    "Taxing Authority" means Canada
Customs and Revenue Agency, Excise and Taxation, any other taxing authority or a
court of competent jurisdiction from which no further appeal may be made if the
determination of Canada Customs and Revenue Agency, Excise and Taxation, or such
other taxing authority is appealed;

     

    "Transmission" has the meaning
ascribed to that term in Section 7.4(c); and

     

    "U.S. GAAP" means generally
accepted accounting principles in the U.S., consistently applied.

     

    
      	
              1.2 

            	
              Headings
      and References

            


    

     

    The
division of this Agreement into Sections and Subsections and the insertion of
headings are for convenience of reference only and shall not affect the
construction or interpretation of this Agreement.

     

    
      	
              1.3 

            	
              Entire
      Agreement

            


    

     

    This
Agreement constitutes the entire agreement between the parties pertaining to the
subject matter hereof and supersedes all prior agreements, negotiations,
discussions and understandings, written or oral, between the parties. This
Agreement may be amended, modified or supplemented only by a written agreement
signed by each party.

     

    
      	
              1.4 

            	
              Applicable
      Law

            


    

     

    This
Agreement shall be governed by, and interpreted and enforced in accordance with,
the laws in force in the Province of Ontario (excluding any conflict of laws,
rule or principle which might refer such interpretation to the laws of another
jurisdiction).  Each party irrevocably submits to the non-exclusive
jurisdiction of the courts of Ontario with respect to any matter arising
hereunder or related hereto.

     

    
      	
              1.5 

            	
              Statutes

            


    

     

    Unless
specified otherwise, reference in this Agreement to a statute refers to that
statute as it may be amended, or to any restated or successor legislation of
comparable effect.

     

    
      	
              1.6 

            	
              Number
      and Gender

            


    

     

    In this
Agreement, words in the singular include the plural and vice versa and words in
one gender include all genders.


    
      
         


      

      
         


        
          

        

      

      
         


        - 9
- 

      

    

     

    
      	
              1.7 

            	
              Currency

            


    

     

    Unless
specified otherwise, all statements of or references to dollar amounts in this
Agreement are to lawful money of the United States.

     

    
      	
              1.8 

            	
              Knowledge

            


    

     

    Any
reference to the knowledge of Exchangeco or JAG shall mean the actual knowledge
of either of the JAG Executives, after reviewing all relevant records and making
due inquiries.  Any reference to the knowledge of the Company or the
Principal Shareholder shall mean the actual knowledge, information and belief of
Gawad after reviewing all relevant records and making due
inquiries.

     

    
      	
              1.9 

            	
              Annexes

            


    

     

    The
following Annexes form a part of this Agreement:

     

    
      
        
          
            
              
                
                  	
                          Annex

                        	 	
                          Description of Annexes

                        
	 	 	 
	
                          1

                        	 	
                          Company
      Shareholder Exchange Notice

                        
	
                          2

                        	 	
                          Debenture
      Notice

                        


                

              

            

          

        

      

    

     

    
      	
              1.10 

            	
              Not
      Joint and Several Obligations

            


    

     

    All
representations, warranties, covenants, obligations and liabilities of the
Company and the Principal Shareholder, on the one hand, and JAG and Exchangeco,
on the other hand, in this Agreement or any Closing Document are independent
representations, warranties, covenants, obligations and liabilities of each
party and are several and not joint.

    


    ARTICLE 2

    PURCHASE
AND SALE

     

    
      	
              2.1 

            	
              Purchase
      and Sale

            


    

     

    Exchangeco
agrees to purchase all of the issued and outstanding common shares in the
capital of the Company as of the Closing, other than the Shivas Shares (the
"Purchased
Shares"), and the Principal Shareholder agrees to (a) sell and transfer
the Principal Shareholder Shares to Exchangeco and (b) cause the Other Company
Shareholders to sell and deliver to Exchangeco the Remaining Company Shares, on
the terms and conditions contained in this Agreement.

     

    
      	
              2.2 

            	
              Purchase
      Price

            


    

     

    The
purchase price for each Purchased Share shall be U.S.$0.03553 per share (the
"Per Share
Purchase Price") for an aggregate purchase price of U.S.$15,000,184.00
(the "Purchase
Price). The Purchase Price shall be allocated, paid and satisfied by
Exchangeco issuing and delivering (or causing to be issued and delivered by
JAG’s transfer agent) to the Company Shareholders of record as of the Closing
Time their pro-rata number of Exchangeable Shares or JAG Common Shares (as
elected by each Company Shareholder) to which they are entitled pursuant to this
Agreement, which shares shall be registered in the name of the Company
Shareholders (or as otherwise directed by the Company Shareholders in writing).
The sum of the (a) JAG Common Shares issued to the Company Shareholders and (b)
number of JAG Common Shares into which the Exchangeable Shares may be exchanged
shall not exceed 422,183,610 JAG Common Shares.


    
      
         


      

      
         


        
          

        

      

      
         


        - 10
- 

      

    

     

    
      	
              2.3 

            	
              Exchangeco
      Consideration for JAG Common Shares

            


    

     

    In
consideration of JAG issuing JAG Common Shares to the Company Shareholders on
Closing, on Closing Exchangeco agrees to issue one common share in its capital
to or to the order of JAG, such common share to have a value equal to the
aggregate value of JAG Common Shares issued to the Company Shareholders, which
aggregate value shall be the product of the Per Share Purchase Price multiplied
by the number of JAG Shares so issued.  JAG hereby directs Exchangeco
to issue such common share to Callco, a wholly-owned subsidiary of
JAG.  In consideration of JAG directing such common share to be issued
to Callco, JAG will cause Callco to issue one common share in its capital to JAG
on Closing, such common share to have a value equal to the Per Share Purchase
Price multiplied by the number of JAG Shares so issued.

     

    
      	
              2.4 

            	
              Deliveries
      by Company Shareholders

            


    

     

    The
Company and the Principal Shareholder shall cause:

    


    2.4.1                     The
Company Shareholders of record as of June 1, 2009 (the “Notice Date”) to each
properly complete, execute and deliver to the Company (which will then, in turn,
deliver to JAG and Exchangeco) the Company Shareholder Exchange Notice not later
than five (5) Business Days after the Notice Date. If any Company Options or
Company Warrants are exercised after the Notice Date and prior to the Closing,
the Company and the Principal Shareholder shall cause such new Company
Shareholders to, promptly after the exercise of their Company Options and/or
Company Warrants, deliver a properly completed and executed Company Shareholder
Exchange Notice to the Company for further delivery to JAG and
Exchangeco.

     

    2.4.2                     Properly
complete, execute and deliver to the Company (which will then, in turn, deliver
to JAG and Exchangeco) the Company Shareholder Exchange Election prior to the
Closing Time.

     

    2.4.3                     The
Company Shareholders to each transfer and deliver to Exchangeco at the Closing
Time share certificates representing all of their Purchased Shares duly endorsed
in blank (and accompanied by a properly completed and executed stock power in
form acceptable to JAG) for transfer against delivery of share certificates
representing that number of Exchangeable Shares or JAG Common Shares to which
they are entitled under this Agreement.


    
      
         


      

      
         


        
          

        

      

      
         


        - 11
- 

      

    

     

    
      	
              2.5 

            	
              Section
      85 Elections

            


    

     

    In order
to defer any taxes payable under the Income Tax Act (Canada) by
any Company Shareholders in respect of the disposition of any of the Purchased
Shares for Exchangeable Shares, each Company Shareholder and Exchangeco agree to
file any necessary joint election pursuant to subsection 85(1) of the Income Tax Act (Canada) in
the prescribed form and within the prescribed time whereby the proceeds of
disposition to the particular Company Shareholder of the Purchased Shares and
the cost thereof to Exchangeco shall be deemed to be an amount equal to the
adjusted cost base of the Purchased Shares to the particular Company Shareholder
for the purposes of the Income
Tax Act (Canada) at the Closing Time.  The respective Company
Shareholder‘s accountants shall prepare and file these elections.  The
applicable parties agree to file corresponding elections pursuant to any
relevant provincial taxing statutes.

     

    
      	
              2.6 

            	
              Stated
      Capital Account of Exchangeco

            


    

     

    In
connection with issuing the Exchangeable Shares, and in accordance with
subsection 24(3) of the Business Corporations Act
(Ontario), Exchangeco shall add to its stated capital account maintained
for the Exchangeable Shares, an amount equal to the aggregate of each "agreed
amount" as specified in the elections referred to in Section 2.5.

     

    If the
parties make a determination or any Taxing Authority makes a Final Determination
that the adjusted cost base of the Purchased Shares is an amount other than the
amount set forth in the election filed pursuant to Section 2.5 of this
Agreement, Exchangeco shall forthwith take whatever steps may be necessary or
advisable to rectify the addition to the stated capital account in respect of
the Exchangeable Shares nunc
pro tunc, as of the Closing Time, to reflect the
determination.

     

    
      	
              2.7 

            	
              Registration
      of JAG Common Shares and Exchangeable
Shares

            


    

     

    All JAG
Common Shares received by any Company Shareholders pursuant to this Agreement in
exchange for their Purchased Shares shall not be registered for resale and,
therefore, shall remain subject to the rights and restrictions of Rule 144. All
Exchangeable Shares received by any Company Shareholders pursuant to this
Agreement in exchange for their Purchased Shares (and any JAG Common Shares into
which such Exchangeable Shares may be exchanged) shall not be registered for
resale prior to six (6) months following the Closing and, therefore, shall be
subject to the rights and restrictions of Rule 144 prior to any such
registration.

     

    ARTICLE 3

    REPRESENTATIONS
AND WARRANTIES

     

    
      	
              3.1 

            	
              Representations
      and Warranties of the Company and the Principal
  Shareholder

            


    

     

    As at the
date of this Agreement and as at the Closing Date, the Company and the Principal
Shareholder each represents and warrants to JAG and Exchangeco as set forth in
this Section 3.1 and acknowledges that JAG and Exchangeco are relying on such
representations and warranties in entering into this Agreement:


    
      
         


      

      
         


        
          

        

      

      
         


        -
12 - 

      

    

     

    
      	
              3.1.1 

            	
              Authorization

            


    

     

    
      	
               
      

            	
              (a)

            	
              The
      Company is a corporation duly incorporated, organized and validly existing
      in good standing under the Business Corporations
      Act (Ontario).  No proceedings have been taken or
      authorized by the Company or any of the Company Shareholders or, to the
      best of the knowledge of the Company and the Principal Shareholder, by any
      other person, with respect to the bankruptcy or insolvency of the Company
      or any of the Company Shareholders, or the liquidation, dissolution or
      winding up of the Company.

            


    

     

    
      	
               
      

            	
              (b)

            	
              The
      Company has the power and capacity to execute and deliver, and to observe
      and perform its covenants and obligations under, the Closing Documents to
      which it is a party.

            


    

     

    
      	
               
      

            	
              (c)

            	
              This
      Agreement and each Closing Document to which the Principal Shareholder
      and/or the Company is a party has been duly executed and delivered by the
      Principal Shareholder and/or the Company, as the case may be, and this
      Agreement and each of the Closing Documents constitute a valid and binding
      obligation of the Principal Shareholder and the Company enforceable
      against each of them in accordance with their respective
      terms.

            


    

     

    
      	
               
      

            	
              (d)

            	
              The
      Company has all necessary power and authority to own or lease the Assets
      and to carry on the Business as at present carried on. The Company
      possesses all licenses, permits, authorizations and certificates material
      to the conduct of the Business.  The Company has not received
      any notice of proceedings relating to the revocation or modification of
      any such license, permit, authorization or certificate which, by itself or
      in the aggregate, if the subject of an unfavourable decision, ruling or
      finding, would have an adverse material effect on the conduct of the
      business, operations, financial condition or income of the
      Company.  Neither the nature of the Business nor the location or
      character of any of the Assets requires the Company to be registered,
      licensed or otherwise qualified as an extra-provincial or foreign
      corporation or to be in good standing in any jurisdiction other than
      jurisdictions where it is duly registered, licensed or otherwise qualified
      and in good standing for such
purpose.

            


    

     

    
      	
               
      

            	
              (e)

            	
              A
      true copy of the articles and all by-laws of the Company have or will be
      delivered to Exchangeco by the Company.  The articles and such
      by-laws of the Company constitute all of the organizational documents and
      by-laws of the Company, are complete and correct and are in full force and
      effect.

            


    

     

    
      	
               
      

            	
              (f)

            	
              The
      original or true copies of all corporate records of the Company have or
      will be made available to Exchangeco for review.  Such corporate
      records are complete and accurate.  All resolutions contained in
      such records have been duly passed and all such meetings have been duly
      called and held.  The share certificate books, register of
      shareholders, register of transfer and registers of officers and directors
      of the Company are complete and
accurate.

            


    


    
      
         


      

      
         


        
          

        

      

      
         


        - 13
- 

      

    

     

    
      	
              3.1.2 

            	
              Authorized
      and Issued Capital of the Company

            


    

     

    
      	
               
      

            	
              (a)

            	
              The
      authorized capital of the Company consists of an unlimited number of
      common shares without par value. No preferred shares are authorized by the
      Company. As of May 20, 2009 there were (a) 12,971,045 Company common
      shares issued and outstanding; (b) outstanding Company options to purchase
      219,953 Company common shares (the “Company
      Options”);
      (c) outstanding Company Warrants to purchase 1,609,908 Company common
      shares (the “Company
      Warrants”);
      and (d) outstanding debentures in the aggregate principal amount of
      $2,000,000, which are convertible into 2,523,000 Company common shares
      (the “Company
      Debentures”).

            


    

     

    
      	
               
      

            	
              (b)

            	
              All
      of the issued and outstanding Company common shares, Company Options,
      Company Warrants and Company Debentures are duly authorized and validly
      issued and all Company common shares are fully paid and
      non-assessable.

            


    

     

    
      	
               
      

            	
              (c)

            	
              None
      of the outstanding equity securities or other securities of the Company
      were issued in violation of the Securities Act or any other Applicable
      Law.

            


    

     

    
      	
               
      

            	
              (d)

            	
              On
      Closing, the Company Shareholders will legally and beneficially own their
      respective Purchased Shares and Exchangeco shall acquire, good and
      marketable title to the Purchased Shares, free and clear of all
      Encumbrances.  There are no restrictions on the transfer of the
      Purchased Shares except those set forth in the Company's articles of
      incorporation.

            


    

     

    
      	
              3.1.3 

            	
              Options
      and No Shareholders' Agreement

            


    

     

    
      	
               
      

            	
              (a)

            	
              Except
      for the Company common shares, the Company Warrants, the Company Options
      and the Company Debentures, no options, warrants, debentures, rights,
      privileges or any other rights entitling the holders thereof to acquire
      any Purchased Shares or any other security (as defined in the Securities
      Act (Ontario)) of the Company are outstanding.  The Company is
      not, and except as contemplated by this Agreement will not, be
      contractually obligated to purchase, redeem or otherwise acquire any of
      its outstanding Purchased Shares.

            


    

     

    
      	
               
      

            	
              (b)

            	
              Except
      for the Private Placement investors pursuant to their respective
      subscription agreements and the holders of the Company Warrants, Company
      Options and Company Debentures, no Person has any oral or written
      agreement, subscriptions, options, conversion, pre-emptive or exchange
      rights, warrants, repurchase or redemption agreements, registration rights
      agreements, or other agreements, claims or commitments of any nature
      whatsoever or any other right capable of becoming any of the foregoing
      (whether legal, equitable, contractual or otherwise), for the subscription
      or issuance of any shares or securities of the
  Company.

            


    

     

    
      	
               
      

            	
              (c)

            	
              The
      Company is not party to any shareholders' or other agreement affecting the
      issued and outstanding shares of the Company or regulating the Company's
      affairs.

            


    


    
      
         


      

      
         


        
          

        

      

      
         


        - 14
- 

      

    

     

    
      	
              3.1.4 

            	
              No
      Subsidiaries

            


    

     

    Except
for Luxspheres Inc. which is inactive and has no material assets or liabilities,
the Company does not own any shares in any other corporate body and has no
investment or proposed investment in any person which is or would be material to
the business and affairs of the Company.

     

    
      	
              3.1.5 

            	
              Absence
      of Conflicting Agreements

            


    

     

    None of
the execution and delivery of, or the observance and performance by the Company
or the Principal Shareholder of any covenant or obligation under this Agreement
or any Closing Document, or the Closing:

     

    
      	
               
      

            	
              (a)

            	
              contravenes
      or results in, or will contravene or result in, a violation of or a
      default under (with or without the giving of notice or lapse of time, or
      both) or in the acceleration of any obligation
  under:

            


    

     

    
      	
               
      

            	
              (i)

            	
              any
      Applicable Law;

            


    

     

    
      	
               
      

            	
              (ii)

            	
              any
      license or permit issued in favour of the
  Company;

            


    

     

    
      	
               
      

            	
              (iii)

            	
              the
      articles, by-laws, directors' or shareholders' resolutions of the
      Company;

            


    

     

    
      	
               
      

            	
              (iv)

            	
              the
      provisions of any material agreement, lease, mortgage, security document,
      obligation or instrument to which the Company or the Principal Shareholder
      is a party, or by which the Company or the Principal Shareholder is bound
      or affected;

            


    

     

    
      	
               
      

            	
              (v)

            	
              the
      provisions of any material Contract to which the Company or the Principal
      Shareholder is a party or by which the Company, the Principal Shareholder
      or the Assets are bound or affected;
or

            


    

     

    
      	
               
      

            	
              (vi)

            	
              any
      Order binding the Company or the Principal Shareholder or the property of
      assets of the Company or the Principal
  Shareholder;

            


    

     

    
      	
               
      

            	
              (b)

            	
              relieves
      any other party to any Contract or Contractual Right of that party's
      obligations thereunder or enable it to terminate its obligations
      thereunder; or

            


    

     

    
      	
               
      

            	
              (c)

            	
              results
      in the creation or imposition of any material Encumbrance on the Company
      or any of the material Assets.

            


    

     

    
      	
              3.1.6 

            	
              Consents,
      Approvals

            


    

     

    No
consent, approval, license, permit, Order, authorization, registration or
declaration of, or filing with, any Governmental Authority or other person is
required by the Company, any of the Company Shareholders or the Principal
Shareholder in connection with (a) the Closing, or (b) the execution and
delivery by the Company, the Company Shareholders or Principal Shareholder of,
and the performance by the Company, the Company Shareholders or Principal
Shareholder of their respective obligations under, this Agreement or the Closing
Documents to which they are a party.


    
      
         


      

      
         


        
          

        

      

      
         


        - 15
- 

      

    

     

    
      	
              3.1.7 

            	
              Litigation

            


    

     

    Except as
set out in the Company Disclosure Schedule, there is no claim, demand, suit,
action, cause of action, dispute, proceeding, litigation, grievance,
arbitration, governmental proceeding or other proceeding including appeals and
applications for review, in progress against, by or relating to the Company, any
Company Shareholders or the Principal Shareholder or affecting the Assets or the
Business nor are any of the same pending or, to the knowledge of the Company or
the Principal Shareholder, threatened.  There is not at present,
outstanding or pending against the Company, any of the Company Shareholders or
the Principal Shareholder, any Order that materially and adversely affects the
Business or the Assets in any way or that in any way relates to this Agreement
or the transactions contemplated hereby.

     

    
      	
              3.1.8 

            	
              The
      Financial Statements

            


    

     

    The
Financial Statements will be prepared in accordance with U.S. GAAP
and:

     

    
      	
               
      

            	
              (a)

            	
              will
      be complete and accurate in all material
  respects;

            


    

     

    
      	
               
      

            	
              (b)

            	
              will
      accurately disclose all the Assets and liabilities (whether accrued,
      absolute, contingent or otherwise) of the Company and present fairly,
      accurately and completely in all material respects the financial condition
      of the Company, as at the date
thereof;

            


    

     

    
      	
               
      

            	
              (c)

            	
              will
      reflect in all material respects all proper accruals, as at the date
      thereof and for the period covered thereby;
and

            


    

     

    
      	
               
      

            	
              (d)

            	
              will
      contain or reflect adequate reserves for all known liabilities and
      obligations of the Company of any nature, whether absolute, contingent or
      otherwise, matured or unmatured, as at the date
  thereof.

            


    

     

    
      	
              3.1.9 

            	
              Absence
      of Changes

            


    

     

    Since
January 31, 2009:

     

    
      	
               
      

            	
              (a)

            	
              the
      Company has conducted the Business in the ordinary course and has not
      incurred any material debt, obligation or liability outside of the
      ordinary course and has used its best efforts to preserve the Business and
      the Assets;

            


    

     

    
      	
               
      

            	
              (b)

            	
              there
      has not been any material change in the Condition of the Business, other
      than changes in the ordinary course, and such changes have not, either
      individually or in the aggregate, been materially adverse or have had or
      may be reasonably expected to have, either before or after the Closing
      Time, a material adverse effect on the Condition of the
      Business;

            


    


    
      
         


      

      
         


        
          

        

      

      
         


        - 16
- 

      

    

     

    
      	
               
      

            	
              (c)

            	
              there
      has not been any change in, or the creation of, any Applicable Law, any
      termination, amendment or revocation of any material license or any
      material damage, destruction, loss, labour dispute or other event,
      development or condition of any character (whether or not covered by
      insurance) which has had, or could have, a material adverse affect on the
      Company or the Condition of the Business;
and

            


    

     

    
      	
               
      

            	
              (d)

            	
              there
      has not been any change in the accounting principles, policies, practices
      or procedures of the Company or their application to the
      Company.

            


    

     

    
      	
              3.1.10 

            	
              Absence
      of Unusual Transactions

            


    

     

    Since
January 31, 2009, the Company has not:

     

    
      	
               
      

            	
              (a)

            	
              transferred,
      assigned, sold or otherwise disposed of any of its Assets, or cancelled
      any debts or claims, except in the ordinary
  course;

            


    

     

    
      	
               
      

            	
              (b)

            	
              incurred
      or assumed any obligation or liability (fixed or contingent) other than
      obligations or liabilities included in the Financial Statements, and
      obligations and liabilities incurred since the date thereof in the
      ordinary course;

            


    

     

    
      	
               
      

            	
              (c)

            	
              suffered
      extraordinary loss;

            


    

     

    
      	
               
      

            	
              (d)

            	
              created
      any Encumbrance on any of the Assets or suffered or permitted any such
      Encumbrance that has arisen on the Assets since that date to remain,
      except unsecured obligations and liabilities incurred in the ordinary
      course;

            


    

     

    
      	
               
      

            	
              (e)

            	
              except
      as contemplated by this Agreement, modified, amended or terminated any
      Contract, agreement or arrangement to which it is or was a party, or
      waived or released any right which it has or had, other than in the
      ordinary course;

            


    

     

    
      	
               
      

            	
              (f)

            	
              hired
      or dismissed any employees whose annual salary exceeds
      $100,000;

            


    

     

    
      	
               
      

            	
              (g)

            	
              increased
      the compensation or benefits paid to any employees other than in the
      ordinary course;

            


    

     

    
      	
               
      

            	
              (h)

            	
              paid
      a bonus or other extraordinary payment to any employee other than bonus
      payments made in the ordinary course of business which are consistent with
      past practices of the Company;

            


    

     

    
      	
               
      

            	
              (i)

            	
              entered
      into any material contracts or arrangements other than in the ordinary
      course;

            


    

     

    
      	
               
      

            	
              (j)

            	
              incurred
      any debt, liability or obligation for borrowed money, or incurred any
      other debt, liability or obligation except in the ordinary course;
      or

            


    

     

    
      	
               
      

            	
              (k)

            	
              authorized
      or agreed or otherwise become committed to do any of the
      foregoing.

            


    


    
      
         


      

      
         


        
          

        

      

      
         


        - 17
- 

      

    

     

    
      	
              3.1.11 

            	
              Material
      Contracts

            


    

     

    All
material Contracts and the Contractual Rights are in full force and effect and
are in good standing and the Company is entitled to all benefits thereunder and
is not dependent upon the guarantee of any security by a third
party.  A list of material Contracts and Contractual Rights is set
forth in the Company Disclosure Schedule. The Company has complied with all
material terms thereof, has paid all amounts due thereunder, has not waived any
material rights thereunder and no default or breach exists in respect thereof on
the part of any of the parties thereto and no event has occurred which, after
the giving of notice or the lapse of time or both, would constitute such a
default or breach. All amounts payable to
the Company under the material Contracts and Contractual Rights are still due
and owing to the Company without any right of set off.  The Company is
not a party to any material Contract or Contractual Right which it does not have
the capacity to perform.

     

    
      	
              3.1.12 

            	
              Accounts
      Receivable

            


    

     

    All
accounts receivable have been accurately recorded in the books of the Company
are bona fide and are good and collectible at the full face value thereof,
without discount, rebate, set-off or counterclaim, except for proper and
sufficient allowances for doubtful accounts provided for in the books of the
Company and in the Financial Statements.  The Company's rights in
respect of each account receivable and under the security related thereto will
be enforced by the Company in accordance with normal business practices and will
not be waived, modified or compromised in any manner.

     

    
      	
              3.1.13 

            	
              Condition
      of Assets

            


    

     

    All
material tangible Assets of the Company are in good working condition and good
repair having regard to their use and age.

     

    
      	
              3.1.14 

            	
              Collective
      Agreements

            


    

     

    The
Company is not a party, either directly or by operation of law, to any
collective agreement.  No trade union or any person holds bargaining
rights with respect to any of the employees.  There are no threatened
or pending union organizing activities involving the employees.

     

    
      	
              3.1.15 

            	
              Benefit
      Plans

            


    

     

    
      	
               
      

            	
              (a)

            	
              All
      material obligations of the Company under any Benefit Plans have been
      satisfied, and there are no outstanding material defaults or violations
      thereunder by the Company.

            


    

     

    
      	
               
      

            	
              (b)

            	
              All
      employer payments, contributions or premiums required to be remitted or
      paid to or in respect of each Benefit Plan, if applicable, have been paid
      or remitted in material compliance with the terms thereof and all
      Applicable Laws.

            


    

     

    
      	
               
      

            	
              (c)

            	
              All
      material accruals for unpaid vacation pay, premiums for unemployment
      insurance, health premiums, pension plan premiums, accrued wages, salaries
      and commissions and other employee Benefit Plans have been reflected in
      the books and records of the
Company.

            


    


    
      
         


      

      
         


        
          

        

      

      
         


        - 18
- 

      

    

     

    
      	
              3.1.16 

            	
              Insurance

            


    

     

    The
Company has had the Assets insured by reputable insurers against loss or damage
as is appropriate to the Business and the Assets, in such amounts and against
such risks as are customarily carried and insured against by owners of
comparable businesses, properties and assets.  All such policies of
insurance are in full force and effect and the Company is not in material
default, whether as to the payment of premium or otherwise, under the terms of
any such policy.

     

    
      	
              3.1.17 

            	
              Intellectual
      Property Rights

            


    

     

    
      	
               
      

            	
              (a)

            	
              Rights

            


    

     

    Except as
set forth in the Company Disclosure Schedule, no Intellectual Property has been
registered by or on behalf of the Company or the Principal Shareholder, nor have
any applications for registration been filed in any jurisdiction.

     

    
      	
               
      

            	
              (b)

            	
              Ownership

            


    

     

    The
Company has the right to use and is the owner of all Intellectual Property and,
in respect of copyrighted works, has obtained a waiver of moral rights from all
authors of such works.  For greater certainty, no Related Party other
than the Company has any ownership or other right in the Intellectual
Property.  Any Intellectual Property not owned but being used by the
Company is being used only with the consent of or license from the rightful
owner thereof and all such licenses are in full force and effect.  No
Seller has knowledge of any claim of adverse ownership in the Intellectual
Property.

     

    
      	
               
      

            	
              (c)

            	
              Complete

            


    

     

    The
Intellectual Property is sufficient and complete to enable the Company to carry
on the Business as presently conducted.  There are no issues known to
the Company affecting the Company's ability to continue to develop, maintain,
support, and exploit the Intellectual Property that would have a material impact
on the Business.

     

    
      	
               
      

            	
              (d)

            	
              Infringements
      by the Company

            


    

     

    To the
knowledge of the Company, there is no claim that any products or services
developed, manufactured, produced, used or sold by the Company or any process,
method, packaging, advertising, or material that the Company employs in the
manufacture, marketing, or sale of any such product, or the provision of any
services by the Company, breaches, violates, infringes or interferes with any
rights of any person.


    
      
         


      

      
         


        
          

        

      

      
         


        - 19
- 

      

    

     

    
      	
               
      

            	
              (e)

            	
              Third
      party Infringements

            


    

     

    To the
knowledge of the Company, there are no infringements of, passing-off related to,
or other interference by third parties with any software or inventions owned by
the Company.

     

    
      	
               
      

            	
              (f)

            	
              Protection
      of Confidentiality

            


    

     

    The
Company has taken commercially reasonable precautions and made commercially
reasonable efforts to protect the Company's trade secrets and secure the
confidentiality of its customer lists, and other proprietary
information.

     

    
      	
               
      

            	
              (g)

            	
              Exploitation

            


    

     

    No
royalty or other fee is required to be paid by the Company to any other Person
in respect of the Intellectual Property and there are no restrictions on the
ability of the Company to exploit or assign all rights in the Intellectual
Property.

     

    
      	
              3.1.18

            	
              Workers' Compensation;
      etc.

            


    

     

    There are
no notices of assessment or any other communications related thereto which the
Company has received from any workplace safety and insurance board or similar
authorities and there are no assessments which have not been paid or accrued on
the date hereof, and there are no facts or circumstances which may result in a
material increase in liability to the Company from any applicable workers'
compensation legislation or applicable employee health and safety, training or
similar legislation, regulations or rules after the Closing Time.

     

    
      	
              3.1.19 

            	
              Product
      Claims

            


    

     

    There are
no claims against the Company in connection with product or service warranties
or the production or sale of defective or inferior products or the provision of
inferior services.

     

    
      	
              3.1.20 

            	
              Restrictive
      Covenants

            


    

     

    The
Company is not a party to or bound or affected by any commitment, agreement or
document which limits the freedom of the Company to compete in any line of
business, transfer or move any of the Assets or operations or which does or
could materially and adversely affect the business practices, operations or
Condition of the Business or the continued operation of the Business after the
Closing.

     

    
      	
              3.1.21

            	
              No Joint Venture Interests,
      etc.

            


    

     

    The
Company, the Company Shareholders and the Principal Shareholder are not
partners, co-tenants, joint venturers or otherwise a participant in any
partnership, joint venture, co-tenancy or other jointly owned business
undertaking which competes with the Company.


    
      
         


      

      
         


        
          

        

      

      
         


        - 20
- 

      

    

     

    
      	
              3.1.22

            	
              Books
      and Records

            


    

     

    The Books
and Records fairly and correctly set out and disclose in all material respects
the financial position of the Company in accordance with good business practice
and all material financial transactions relating to the Business have been
accurately recorded in such Books and Records.

     

    
      	
              3.1.23

            	
              GST
      Registration

            


    

     

    The
Company is registered for purposes of Part IX of the Excise Tax Act
(Canada).

     

    
      	
              3.1.24

            	
              Omitted

            


    

     

    
      	
              3.1.25

            	
              Licenses

            


    

     

    No
licenses or permits of any Governmental Authority are necessary for the
operation of the Business other than licenses or permits required by businesses
in general.

     

    
      	
              3.1.26

            	
              Taxes

            


    

     

    The
Company has duly filed or will duly file, on a timely basis, all tax returns and
notices required to be filed by it and has paid all material Taxes which are due
and payable or have been alleged to be due on or prior to the date hereof
(whether or not shown on any tax return), except for Taxes being contested in
good faith. Adequate provision has been made in the Financial Statements for all
Taxes payable for the current taxation year for which tax returns are not yet
required to be filed and for all Taxes relating to taxation years ending on or
before the date hereof.  There are no material tax deficiencies or
material interest or penalties accrued or accruing, or alleged to be accrued or
accruing which have not been provided for.  There are no agreements,
waivers, or other arrangements providing for an extension of time with respect
to the filing of any tax return or the payment of any Taxes by the
Company.  There are no actions, suits, proceedings, investigations or
claims, threatened or pending against the Company in respect of Taxes, nor are
there any matters under discussion with any Governmental Authority relating to
Taxes by any such authority.  The Company has duly collected and
remitted all Taxes it was required to collect and remit.  The Company
has not received a refund or credit for Taxes to which it was not entitled. The
Company has withheld from each payment made to any of its officers, directors,
employees, shareholders or creditors or any non-residents within the meaning of
that term as used in the Income Tax Act (Canada), all
Taxes and other amounts which it is required by the laws to which it is subject
to withhold or deduct and has duly remitted all Taxes and amounts so withheld or
deducted to the proper recipients thereof within the time, and in the manner,
required by such laws.

     

    
      	
              3.1.27

            	
              Real
      Property

            


    

     

    The
Company does not own and, since its incorporation, has never owned any real
property.


    
      
         


      

      
         


        
          

        

      

      
         


        -
21 -

      

    

     

    
      	
              3.1.28

            	
              Business
      in Compliance with Law

            


    

     

    The
operations of the Company are conducted in all material respects, in compliance
with all Applicable Laws of each jurisdiction in which the Business has been and
is carried on and the Company has not received any notice of any alleged breach
of any such Applicable Laws.

     

    
      	
              3.1.29

            	
              Environmental
      Matters

            


    

     

    The
Company has been and is in material compliance with all applicable federal,
provincial, municipal and local laws, statues, ordinances, by-laws, regulations,
orders, directions and decisions rendered by any ministry, department or
administrative or regulatory agency relating to the protection of the
environment or pollutants, containments, chemicals, or industrial, toxic, or
hazardous wastes or substances and to the Company’s and the Principal
Shareholders' knowledge, there are no environmental audits, evaluations,
assessments or studies either planned or underway relating to the Company. No
environmental permits are necessary to operate the Business as presently
conducted.

     

    
      	
              3.1.30

            	
              Title
      to Assets

            


    

     

    Except as
disclosed in the Financial Statements or the Company
Disclosure Schedule, the Company has good and marketable title to all of the
Assets, free and clear of all Encumbrances.  No property or assets of
the Company have been taken or expropriated by any federal, provincial,
municipal or other authority nor have any notice or proceedings in respect
thereof been given or commenced nor is the Company aware of any intent or
proposal to give any such notice or commence any such proceeding.

     

    
      	
              3.1.31

            	
              Inventory

            


    

     

    The
Inventory shown on the Financial Statements consists of, and the Inventory
acquired after the date of the execution of this Agreement will consist of,
items of a quality and quantity usable or saleable in the ordinary course of the
Business.  The value of obsolete materials and of materials of below
standard quality have been written down on the Financial Statements to
realizable market value, or adequate reserves have been provided, all in
accordance with U.S. GAAP.

     

    
      	
              3.1.32

            	
              Directors,
      Officers and Employees of the
Company

            


    

     

    The
Company Disclosure Schedule contains a list of all employees, officers,
directors and other personnel of the Company together with the current job title
and the annual remuneration rate for each such person and a statement of the
full amount of all remuneration paid by the Company to each such person and to
any director of the Company during the period commencing on November 1, 2007 and
ended October 31, 2008 and all amounts owing
(including amounts in respect of accrued but unpaid compensation) to such
persons as of the date of this Agreement. None of the directors or officers of
the Company are or have ever been subject to prior regulatory, criminal or
bankruptcy proceedings in Canada or elsewhere.  No present or former
officer, director or shareholder of the Company has any cause of action, or
other claim whatsoever, against, or owes any amount to, the Company except for
any claims in the ordinary course of the business such as for accrued wages,
accrued vacation pay and accrued benefits under any Benefit Plans the
particulars of which have been disclosed to Exchangeco.  To the best
of the knowledge of the Company and the Principal Shareholder, there have not
been and there are not currently any material disagreement or other difficulties
with any of the employees of the Company which are adversely affecting or could
reasonably adversely affect, in a material manner, the carrying on of the
business of the Company.


    
      
         


      

      
         


        
          

        

      

      
         


        -
22 -

      

    

     

    
      	
              3.1.33

            	
              Related
      Party Transactions

            


    

     

    Except as
disclosed in the Company Disclosure Schedule, no Related Party has or has
had:

     

    
      	
               
      

            	
              (a)

            	
              borrowed
      money from or loaned money to the
Company;

            


    

     

    
      	
               
      

            	
              (b)

            	
              any
      contractual relationship with the
Company;

            


    

     

    
      	
               
      

            	
              (c)

            	
              any
      claim, express or implied, of any kind whatsoever against the
      Company;

            


    

     

    
      	
               
      

            	
              (d)

            	
              any
      interest in any property or assets owned or used by the Company;
      or

            


    

     

    
      	
               
      

            	
              (e)

            	
              any
      engagement in any other transaction with the Company (other than
      employment relationships at the salaries disclosed in the Company
      Disclosure Schedule).

            


    

     

    
      	
              3.1.34

            	
              Independent
      Contractors

            


    

     

    Each of
the independent contractors who provides services to the Company and who is
listed on the Company Disclosure Schedule does not provide services exclusively
to the Company.

     

    
      	
              3.1.35

            	
              Full
      Disclosure

            


    

     

    The
representations and warranties of the Company and the Principal Shareholder
contained in this Agreement and in the Related Agreements do not contain any
untrue statement of a material fact.

     

    
      	
              3.2

            	
              Representations
      and Warranties of JAG

            


    

     

    As at the
date of this Agreement, except as set forth on the JAG Disclosure Schedule, each
of JAG and Exchangeco represents and warrants to the Company and the Principal
Shareholder as set out in the following Subsections of this Section, and
acknowledge that the Company and the Principal Shareholder are relying upon such
representations and warranties in entering into this Agreement.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

        -
23 -

      

    

     

    
      	
              3.2.1

            	
              Authorization

            


    

     

    
      	
               
      

            	
              (a)

            	
              JAG
      is a corporation duly incorporated, organized and validly subsisting under
      the laws of the State of Nevada.  No proceedings have been taken
      or authorized by JAG or, to the best of JAG's knowledge, by any other
      person, with respect to the bankruptcy, insolvency, liquidation,
      dissolution or winding up of JAG.  JAG is duly qualified to do
      business as a foreign corporation in State of
  Florida.

            


    

     

    
      	
               
      

            	
              (b)

            	
              JAG
      has all necessary power and capacity to execute and deliver, and to
      observe and perform its covenants and obligations under, this Agreement
      and the Closing Documents to which it is a party.  JAG has taken
      all action necessary to authorize the execution and delivery of, and the
      observance and performance of its covenants and obligations under, this
      Agreement and the Closing Documents to which it is a
  party.

            


    

     

    
      	
               
      

            	
              (c)

            	
              This
      Agreement and each Closing Document to which JAG is a party has been duly
      executed and delivered by JAG, and this Agreement and each Closing
      Document to which JAG is a party constitute a valid and binding obligation
      of JAG enforceable against JAG in accordance with its
    terms.

            


    

     

    
      	
              3.2.2

            	
              Absence
      of Conflicting Agreements

            


    

     

    None of
the execution and delivery of, or the observance and performance by JAG of, any
covenant or obligation under, this Agreement and the Closing Documents to which
it is a party or the Closing contravenes or results in (with or without the
giving of notice or lapse of time, or both) or will contravene or violate in any
material respect or result in any material breach or default of, or acceleration
of any obligation under:

     

    
      	
               
      

            	
              (a)

            	
              any
      Applicable Law;

            


    

     

    
      	
               
      

            	
              (b)

            	
              any
      license of JAG;

            


    

     

    
      	
               
      

            	
              (c)

            	
              JAG's
      articles or by-laws or any directors' or shareholders' resolutions of JAG;
      or

            


    

     

    
      	
               
      

            	
              (d)

            	
              any
      agreement, lease, mortgage, security document, obligation or instrument to
      which JAG is a party or by which JAG or its assets is affected or
      bound.

            


    

     

    
      	
              3.2.3

            	
              Consents
      and Approvals

            


    

     

    No
consent, approval, licence, Order, authorization, registration or declaration
of, or filing with, any Governmental Authority is required by JAG in connection
with:

     

    
      	
               
      

            	
              (a)

            	
              the
      Closing;

            


    

     

    
      	
               
      

            	
              (b)

            	
              the
      execution and delivery by JAG of this Agreement or any Closing Document to
      which it is a party; or

            


    

     

    
      	
               
      

            	
              (c)

            	
              the
      observance and performance by JAG of its obligations under this Agreement
      or any Closing Documents to which it is a
party.

            


    


    
      
         


      

      
         


        
          

        

      

      
         


        -
24 -

      

    

     

    
      	
              3.2.4

            	
              Capitalization

            


    

     

    
      	
               
      

            	
              (a)

            	
              The
      authorized capital stock of JAG consists of (i) 500,000,000 shares of JAG
      Common Shares, (ii) 440,000 shares of Class B common stock, par value
      $0.00001 per share, of which 400,000 shares have been designated as Series
      2 Class B common stock (“JAG
      Series 2 Class B Common Shares”) and 40,000 shares
      have been designated as Series 3 Class B Common Stock (“JAG
      Series 3 Class B Common Shares”) and (iii) 50,000,000
      shares of preferred stock, par value $0.00001 per share (“JAG
      Preferred Shares”).  As of May
      20, 2009:  (iv) 67,503,004 JAG Common Shares were issued and
      outstanding, (v) 380,931 shares of JAG Series 2 Class B Common Stock were
      issued and outstanding, (vi) 21,500 shares of JAG Series 3 Class B Common
      Stock were issued and outstanding, and (vii) no JAG Preferred Shares were
      issued and outstanding.  The number of JAG Common Shares
      outstanding includes several classes of stock the shares of which were
      converted into the right to receive shares of JAG common stock upon
      surrender thereof in JAG’s recapitalizations in 2002 and
      2004.  As of May 20, 2009, there were 175,346 Series 1 Class B
      common shares, 1,080,028 Class A common shares and 123,277 original
      JagNotes.com Inc. common shares that remain unsurrendered. The JAG Common
      Shares, JAG Series 2 Class B Common Shares and JAG Series 3 Class B Common
      Shares are referred to herein collectively as the “JAG  Company
      Shares”).

            


    

     

    
      	
               
      

            	
              (b)

            	
              As
      of May 20, 2009, there were outstanding JAG warrants to purchase 4,250,000
      JAG Common Shares (the “JAG
      Warrants”).

            


    

     

    
      	
               
      

            	
              (c)

            	
              As
      of May 20, 2009, there were outstanding (and committed to be issued) JAG
      options to purchase 2,750,000 JAG Common Shares (the “JAG
      Options”).

            


    

     

    
      	
               
      

            	
              (d)

            	
              All
      of the issued and outstanding JAG Company Shares, JAG Options and JAG
      Warrants are duly authorized and validly issued and all JAG Company Shares
      are fully paid and non-assessable. Upon consummation of the transactions
      contemplated herein, JAG Common Shares issued hereunder on Closing and JAG
      Common Shares issuable upon exchange of the Exchangeable Shares are duly
      reserved, allotted, authorized and will be validly issued, fully paid,
      non-assessable and free and clear of all Encumbrances.  Subject
      to the accuracy of the representations and warranties of the Company and
      the Principal Shareholder set forth in Section 3.1, JAG Common Shares to
      be issued or issuable hereunder will be issued in a transaction exempt
      from registration under the Securities Act, all applicable "blue sky laws"
      and Canadian Securities Laws.

            


    


    
      
         


      

      
         


        
          

        

      

      
         


        -
25 -

      

    

     

    
      	
               
      

            	
              (e)

            	
              None
      of the outstanding equity securities or other securities of JAG were
      issued in violation of the Securities Act or any other Applicable
      Law.  Except for the JAG Company Shares, the JAG Warrants, the
      JAG Options and the redemption rights with respect to the JAG Series 2
      Class B Common Shares and the JAG Series 3 Class B Common Shares, there
      are no subscriptions, options, conversion, pre-emptive or exchange rights,
      warrants, repurchase or redemption agreements, registration rights
      agreements, or other agreements, claims or commitments of any nature
      whatsoever obligating JAG to issue, transfer, deliver or sell, or cause to
      be issued, transferred, delivered or sold, repurchased or redeemed,
      additional shares of the capital stock or other securities of JAG or
      obligating JAG to register any of JAG securities under the U.S. Securities
      Laws or obligating JAG to grant, extend or enter into any such
      agreement.  JAG does not own or have any contract or agreement
      to acquire, any equity securities or other securities of any Person or any
      direct or indirect equity or ownership interest in any other
      business.

            


    

     

    
      	
              3.2.5

            	
              JAG
      Financial Statements

            


    

     

    The JAG
Financial Statements have been prepared in accordance with U.S. GAAP
and:

     

    
      	
               
      

            	
              (a)

            	
              are
      complete and accurate in all material
respects;

            


    

     

    
      	
               
      

            	
              (b)

            	
              accurately
      disclose all the Assets and liabilities (whether accrued, absolute,
      contingent or otherwise) of JAG and present fairly, accurately and
      completely in all material respects the financial condition of JAG, as at
      the date thereof;

            


    

     

    
      	
               
      

            	
              (c)

            	
              reflect
      in all material respects all proper accruals, as at the date thereof and
      for the period covered thereby; and

            


    

     

    
      	
               
      

            	
              (d)

            	
              contain
      or reflect adequate reserves for all liabilities and obligations of JAG of
      any nature, whether absolute, contingent or otherwise, matured or
      unmatured, as at the date thereof.

            


    

     

    
      	
              3.2.6

            	
              SEC
      Documents

            


    

     

    
      	
               
      

            	
              (a)

            	
              All
      statements, reports, schedules, forms, exhibits and other documents
      required to have been filed by JAG with the SEC since the date of
      incorporation of JAG (the "SEC
      Documents")
      have been so filed and JAG is not delinquent in respect of any such
      required filings.  JAG and its Subsidiaries are engaged only in
      the business described in the SEC Documents and the SEC Documents contain
      a complete and accurate description in all material respects of the
      business of JAG and its Subsidiaries, taken as a
  whole.

            


    

     

    
      	
               
      

            	
              (b)

            	
              At
      the time of filing thereof, the SEC Documents complied as to form in all
      material respects with the requirements of the Exchange Act and did not
      contain any untrue statement of a material fact or omit to state any
      material fact necessary in order to make the statements made therein, in
      the light of the circumstances under which they were made, not
      misleading.  JAG is not (with or without the lapse of time or
      the giving of notice, or both) in breach or default of any material
      contract and, to the best knowledge of JAG, no other party to any material
      contract is (with or without the lapse of time or the giving of notice, or
      both) in breach or default of any material contract.  Neither
      JAG nor any of its Affiliates has received any notice of the intention of
      any party to terminate any material
contract.

            


    


    
      
         


      

      
         


        
          

        

      

      
         


        -
26 -

      

    

     

    
      	
               
      

            	
              (c)

            	
              Each
      registration statement and any amendment thereto filed by JAG since
      January 1, 2007 pursuant to the Securities Act and the rules and
      regulations thereunder, as of the date such statement or amendment became
      effective, complied as to form in all material respects with the
      Securities Act and did not contain any untrue statement of a material fact
      or omit to state any material fact required to be stated therein or
      necessary in order to make the statements made therein, in light of the
      circumstances under which they were made, not misleading; and each
      prospectus filed pursuant to Rule 424(b) under the Securities Act, as of
      its issue date and as of the closing of any sale of securities pursuant
      thereto did not contain any untrue statement of a material fact or omit to
      state any material fact required to be stated therein or necessary in
      order to make the statements made therein, in the light of the
      circumstances under which they were made, not
  misleading.

            


    

     

    
      	
              3.2.7

            	
              Intellectual
      Property

            


    

     

    
      	
               
      

            	
              (a)

            	
              Rights

            


    

     

    No
patents, trade-marks, service marks, copyright, industrial designs and circuit
topography have been registered by or on behalf of JAG, nor have any
applications for registration been filed in any jurisdiction.

     

    
      	
               
      

            	
              (b)

            	
              Ownership

            


    

     

    JAG has
the right to use and is the owner of all of its intellectual property and, in
respect of copyrighted works, has obtained a waiver of moral rights from all
authors of such works.  For greater certainty, no Related Party other
than JAG has any ownership or other right in its intellectual
property.  Any JAG intellectual property not owned but being used by
JAG is being used only with the consent of or license from the rightful owner
thereof and all such licenses are in full force and effect.  JAG has
no knowledge of any claim of adverse ownership in its intellectual
property.

     

    
      	
               
      

            	
              (c)

            	
              Infringements
      by JAG

            


    

     

    There is
no claim that any products or services developed, manufactured, produced, used
or sold by JAG or any process, method, packaging, advertising, or material that
JAG employs in the manufacture, marketing, or sale of any such product, or the
provision of any services by JAG, breaches, violates, infringes or interferes
with any rights of any person.

     

    
      	
               
      

            	
              (d)

            	
              Third
      party Infringements

            


    

     

    There are
no infringements of, passing-off related to, or other interference by third
parties with any software or inventions owned by JAG.


    
      
         


      

      
         


        
          

        

      

      
         


        -
27 -

      

    

     

    
      	
               
      

            	
              (e)

            	
              Protection
      of Confidentiality

            


    

     

    JAG has
taken commercially reasonable precautions and made commercially reasonable
efforts to protect JAG's trade secrets and secure the confidentiality of its
customer lists, and other proprietary information.

     

    
      	
               
      

            	
              (f)

            	
              Exploitation

            


    

     

    No
royalty or other fee is required to be paid by JAG to any other Person in
respect of JAG's intellectual property and there are no restrictions on the
ability of JAG to exploit or assign all rights in its intellectual
property.

     

    
      	
              3.2.8

            	
              Environmental
      Matters

            


    

     

    JAG has
been and is in material compliance with all applicable federal, provincial,
municipal and local laws, statues, ordinances, by-laws, regulations, orders,
directions and decisions rendered by any ministry, department or administrative
or regulatory agency relating to the protection of the environment or
pollutants, containments, chemicals, or industrial, toxic, or hazardous wastes
or substances and to JAG' knowledge, there are no environmental audits,
evaluations, assessments or studies either planned or underway relating to
JAG.

     

    
      	
              3.2.9 

            	
              Litigation

            


    

     

    There is
no claim, demand, suit, action, cause of action, dispute, proceeding,
litigation, grievance, arbitration, governmental proceeding or other proceeding
including appeals and applications for review, in progress against, by or
relating to JAG nor are any of the same pending or, to the knowledge of any of
JAG, threatened.  There is not at present, outstanding or pending
against JAG, any Order that materially and adversely affects JAG in any way or
that in any way relates to this Agreement or the transactions contemplated
hereby.

     

    
      	
              3.2.10

            	
              Internal
      Controls

            


    

     

    JAG is in
compliance with the provisions of the Sarbanes-Oxley Act of 2002 currently
applicable to JAG.  JAG maintains a system of internal accounting
controls sufficient to provide reasonable assurance that (i) transactions are
executed in accordance with management's general or specific authorizations;
(ii) transactions are recorded as necessary to permit preparation of financial
statements in conformity with U.S. GAAP and to maintain asset accountability;
(iii) access to assets is permitted only in accordance with management's general
or specific authorization; and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences.  JAG has established
disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and
15d-14) for JAG and designed such disclosure controls and procedures to ensure
that material information relating to JAG is made known to the certifying
officers by others within those entities, particularly during the period in
which JAG' most recently filed period report under the Exchange Act, as the case
may be, is being prepared.  JAG' certifying officers have evaluated
the effectiveness of JAG' controls and procedures as of the end of the period
covered by the most recently filed periodic report under the Exchange Act (the
"Evaluation
Date").  JAG presented in its most recently filed periodic
report under the Exchange Act the conclusions of the certifying officers about
the effectiveness of the disclosure controls and procedures based on their
evaluations as of the Evaluation Date.  Since the Evaluation Date,
there have been no significant changes in JAG' internal controls (as such term
is defined in Item 307 of Regulation S-B) or, to the best knowledge of JAG, in
other factors that could significantly affect JAG' internal
controls.


    
      
         


      

      
         


        
          

        

      

      
         


        -
28 -

      

    

     

    
      	
              3.2.11 

            	
              Tax
      Matters

            


    

     

    Each of
JAG and its Subsidiaries has prepared and filed all tax returns required to have
been filed by JAG or such Subsidiary with all appropriate governmental agencies
and paid all taxes shown thereon or otherwise owed by it.  The
charges, accruals and reserves on the books of JAG in respect of taxes for all
fiscal periods are adequate in all material respects, and there are no material
unpaid assessments against JAG or any Subsidiary nor, to the best knowledge of
JAG, any basis for the assessment of any additional taxes, penalties or interest
for any fiscal period or audits by any federal, state or local taxing authority
except for any assessment which is not material to JAG and its Subsidiaries,
taken as a whole.  All taxes and other assessments and levies that JAG
or any Subsidiary is required to withhold or to collect for payment have been
duly withheld and collected and paid to the proper governmental entity or third
party when due.  There are no tax liens or claims pending or, to the
best knowledge of JAG, threatened against JAG or any Affiliate or any of their
respective assets or properties.  There are no outstanding tax sharing
agreements or other such arrangements between JAG and any Subsidiary or other
corporation or entity.  Neither JAG nor its Affiliates are currently
undergoing any audit by a taxing authority, or has waived or extended any
statute of limitations at the request of any taxing authority.

     

    
      	
              3.2.12 

            	
              Full
      Disclosure

            


    

     

    The
representations and warranties of JAG contained in this Agreement and in the
Related Agreements do not contain any untrue statement of a material
fact.

     

    
      	
              3.2.13 

            	
              Exchangeco
      and Callco

            


    

     

    
      	
               
      

            	
              (a)

            	
              Each
      of Exchangeco and Callco is a corporation duly incorporated, organized and
      validly existing in good standing under the Business Corporations
      Act (Ontario). No proceedings have been taken or authorized by JAG
      or, to the best of the knowledge of JAG, by any other person, with respect
      to the bankruptcy or insolvency of Exchangeco or Callco, or the
      liquidation, dissolution or winding up of Exchangeco or
      Callco.

            


    

     

    
      	
               
      

            	
              (b)

            	
              Each
      of Exchangeco and Callco has the power and capacity to execute and
      deliver, and to observe and perform its covenants and obligations under,
      the Closing Documents to which it is a
party.

            


    

     

    
      	
               
      

            	
              (c)

            	
              This
      Agreement and each Closing Document to which Exchangeco or Callco is a
      party has been duly executed and delivered by Exchangeco or Callco, as
      applicable, and this Agreement and each of the Closing Documents
      constitute a valid and binding obligation of Exchangeco and Callco
      enforceable against Exchangeco and Callco in accordance with their
      respective terms.

            


    


    
      
         


      

      
         


        
          

        

      

      
         


        -
29 -

      

    

     

    
      	
               
      

            	
              (d)

            	
              Each
      of Exchangeco and Callco has all necessary power and authority to own or
      lease its assets and to carry on its business as at present carried
      on.  Each of Exchangeco and Callco possesses all licenses,
      permits, authorizations and certificates material to the conduct of its
      business.  Neither Exchangeco nor Callco has received any notice
      of proceedings relating to the revocation or modification of any such
      license, permit, authorization or certificate which, by itself or in the
      aggregate, if the subject of an unfavourable decision, ruling or finding,
      would have an adverse material effect on the conduct of the business,
      operations, financial condition or income of Exchangeco or
      Callco.  Neither the nature of its business nor the location or
      character of any of its assets requires Exchangeco or Callco to be
      registered, licensed or otherwise qualified as an extra-provincial or
      foreign corporation or to be in good standing in any jurisdiction other
      than jurisdictions where it is duly registered, licensed or otherwise
      qualified and in good standing for such
purpose.

            


    

     

    
      	
               
      

            	
              (e)

            	
              A
      true copy of the articles and all by-laws of Exchangeco and Callco have or
      will be delivered to the Company by Exchangeco.  The articles
      and such by-laws of Exchangeco and Callco constitute all of the
      organizational documents and by-laws of Exchangeco and Callco, are
      complete and correct and are in full force and
  effect.

            


    

     

    
      	
               
      

            	
              (f)

            	
              The
      original or true copies of all corporate records of Exchangeco and Callco
      have been made available to the Company's solicitors for
      review.  Such corporate records are complete and
      accurate.  All resolutions contained in such records have been
      duly passed and all such meetings have been duly called and
      held.  The share certificate books, register of shareholders,
      register of transfer and registers of officers and directors of Exchangeco
      and Callco are complete and
accurate.

            


    

     

    
      	
               
      

            	
              (g)

            	
              Exchangeco
      and Callco were incorporated on May 22, 2009 for the purpose of the
      transactions contemplated herein.  Neither Exchangeco nor Callco
      has any liabilities or obligations except for those arising out of or in
      connection with this Agreement and the Closing
  Documents.

            


    

     

    
      	
              3.2.14 

            	
              Authorized
      and Issued Capital of Exchangeco and
Callco

            


    

     

    The
authorized capital of each of Exchangeco and Callco consists of an unlimited
number of common shares without par value of which one (1) common share of
Exchangeco and one (1) common share of Callco are issued and outstanding as
fully paid and non-assessable shares.

     

    
      	
              3.2.15 

            	
              Valid
      Issuance of Exchangeable Shares

            


    

     

    The
Exchangeable Shares issued on Closing will be duly and validly created,
authorized and issued as fully paid and non-assessable shares.


    
      
         


      

      
         


        
          

        

      

      
         


        -
30 -

      

    

     

    
      	
              3.3

            	
              Qualification
      of Representations and Warranties

            


    

     

    Any
representation or warranty made by a party as to the enforceability of this
Agreement or any of the Closing Documents subject to the following
qualifications:

     

    
      	
               
      

            	
              (a)

            	
              specific
      performance, injunction and other equitable remedies are discretionary
      and, in particular, may not be available where damages are considered an
      adequate remedy; and

            


    

     

    
      	
               
      

            	
              (b)

            	
              enforcement
      may be limited by bankruptcy, insolvency, liquidation, reorganization,
      reconstruction and other laws generally affecting enforceability of
      creditors' rights.

            


    

     

    
      	
              3.4 

            	
              Non-Waiver

            


    

     

    
      	
               
      

            	
              (a)

            	
              No
      investigations made by or on behalf of JAG or Exchangeco at any time shall
      waive, diminish the scope of or otherwise affect any representation or
      warranty made by the Company and the Principal Shareholder in this
      Agreement. No waiver by JAG or Exchangeco of any condition, in whole or in
      part, shall operate as a waiver of any other
  condition.

            


    

     

    
      	
               
      

            	
              (b)

            	
              No
      investigation made by or on behalf of the Company or the Principal
      Shareholder at any time shall waive, diminish the scope of or otherwise
      affect any representation or warranty made by JAG or Exchangeco in this
      Agreement.  No waiver by the Company or the Principal
      Shareholder of any condition, in whole or in part, shall operate as a
      waiver of any other condition.

            


    

     

    
      	
              3.5 

            	
              Survival
      of Representations and Warranties

            


    

     

    
      	
               
      

            	
              (a)

            	
              Subject
      to Subsection (b), all representations, warranties and covenants contained
      in this Agreement on the part of each of the parties shall survive the
      Closing without time limit.

            


    

     

    
      	
               
      

            	
              (b)

            	
              Representations
      and warranties, concerning Environmental matters set out in Section 3.1.29
      and 3.2.8, shall survive for a period of 5 years from the Closing
      Date.  Representations and warranties concerning tax matters set
      out in Section 3.1.26 and 3.2.11 shall survive for a period of ninety days
      after the relevant authorities shall no longer be entitled to assess
      liability for Taxes against the Company for any particular taxation year
      ended on or prior to the Closing Date, having regard without limitation,
      to any waivers given by the Company with the consent of the Company in
      respect of any taxation year.  Subject to Subsection (c),
      all other representations and warranties shall only survive for a period
      of 2 years from the Closing Date.  If no claim shall have been
      made under this Agreement against a party for any incorrectness in or
      breach of any representation or warranty made in this Agreement prior to
      the expiry of these survival periods, such party shall have no further
      liability under this Agreement with respect to such representation or
      warranty.

            


    


    
      
         


      

      
         


        
          

        

      

      
         


        -
31 -

      

    

     

    
      	
               
      

            	
              (c)

            	
              Notwithstanding
      the limitations set out in Subsection (b) any claim which is based on
      representations and warranties set forth in Subsections 3.1.1, 3.1.2,
      3.1.3, 3.2.1 or 3.2.14 or any intentional misrepresentation or fraud may
      be brought at any time.

            


    

     

    ARTICLE 4

    OTHER
COVENANTS OF THE PARTIES

     

    
      	
              4.1

            	
               Access and
      Investigation.

            


    

     

    
      	
               
      

            	
              (a)

            	
              During
      the period from the date of this Agreement through the Closing Time (the
      "Pre-Closing
      Period"), the Company shall, and the Principal Shareholder shall
      cause the Company to:

            


    

     

    (i) provide
Exchangeco and Exchangeco's Representatives with reasonable access to the
Company's Representatives, personnel and assets and to all Books and Records;
and

     

    (ii)
provide Exchangeco and Exchangeco's Representatives with copies of such Books
and Records as Exchangeco or Exchangeco’s Representatives may reasonably
request.

     

    
      	
               
      

            	
              (b)

            	
              During
      the Pre-Closing Period, JAG shall:

            


    

     

    
      	
               
      

            	
              (i)

            	
              provide
      the Company with reasonable access to JAG's Representatives, personnel and
      assets and to all books and records;
and

            


    

     

    
      	
               
      

            	
              (ii)

            	
              provide
      the Company with copies of such books and records of JAG or Exchangeco as
      the Company may reasonably request.

            


    

     

    
      	
              4.2

            	
               Operation of the Company's
      Business.

            


    

     

    
      	
               
      

            	
              (a)

            	
              During
      the Pre-Closing Period the Company shall conduct, and the Principal
      Shareholder shall ensure that the Company conducts, its business and
      operations (i) in the ordinary course and in accordance with past
      practices, and (ii) in compliance with all Applicable Law and the
      requirements of all Contracts and Collateral
  Rights.

            


    

     

    
      	
               
      

            	
              (b)

            	
              During
      the Pre-Closing Period the Company shall not, and the Principal
      Shareholder shall cause the Company not to (without the prior written
      consent of Exchangeco and JAG):

            


    

     

    
      	
               
      

            	
              (i)

            	
              declare
      or pay any dividend or make any other distribution in respect of any
      Purchased Shares;

            


    

     

    
      	
               
      

            	
              (ii)

            	
              sell,
      issue, grant or authorize the issuance or grant of (i) any securities,
      other than Company common shares required to be issued as a result of the
      conversion of any Company Debentures or the exercise of any Company
      Options or Company Warrants or (ii) any instrument convertible or
      exercisable into or exchangeable for any securities of the
      Company;

            


    


    
      
         


      

      
         


        
          

        

      

      
         


        -
32 -

      

    

     

    
      	
               
      

            	
              (iii)

            	
              amend
      or permit the adoption of any amendment to the Articles of Incorporation
      or by-laws of the Company, or effect or authorize any recapitalization,
      reclassification of shares, stock split, reverse stock split or similar
      transaction;

            


    

     

    
      	
               
      

            	
              (iv)

            	
              adopt
      a plan of complete or partial liquidation or dissolution or resolutions
      providing for or authorizing such a liquidation or a
      dissolution;

            


    

     

    
      	
               
      

            	
              (v)

            	
              form
      any subsidiary or acquire any equity interest or other interest in any
      other entity;

            


    

     

    
      	
               
      

            	
              (vi)

            	
              lend
      money to any person or entity, or incur or guarantee any indebtedness
      (except that the Company may make routine borrowings in the ordinary
      course of business and in accordance with past
  practices);

            


    

     

    
      	
               
      

            	
              (vii)

            	
              pay
      any bonus or make any profit-sharing or similar payment to, or increase
      the amount of the wages, salary, commissions, fringe benefits or other
      compensation or remuneration payable to, any of its employees, directors
      or officers.

            


    

     

    
      	
               
      

            	
              (viii)

            	
              change
      any of its methods of accounting or accounting practices in any respect
      except as required by generally accepted accounting
      principles;

            


    

     

    
      	
               
      

            	
              (ix)

            	
              make
      any material tax election;

            


    

     

    
      	
               
      

            	
              (x)

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

            


    

     

    
      	
               
      

            	
              (xi)

            	
              authorize,
      agree, commit or enter into any of the actions described in clauses "(a)"
      through "(k)" of this Subsection
(b).

            


    

     

    
      	
              4.3

            	
              Operation of JAG's
      Business.

            


    

     

    
      	
               
      

            	
              (a)

            	
              During
      the Pre-Closing Period JAG shall conducts its business and operations
      (i) in the ordinary course and in accordance with past practices, and
      (ii) in compliance with all Applicable
Law.

            


    

     

    
      	
               
      

            	
              (b)

            	
              During
      the Pre-Closing Period, JAG shall not, and shall not permit its Affiliates
      to (without the prior written consent of the
  Company):

            


    

     

    
      	
               
      

            	
              (i)

            	
              declare
      or pay any dividend or make any other distribution in respect of any
      common stock;

            


    


    
      
         


      

      
         


        
          

        

      

      
         


        -
33 -

      

    

     

    
      	
               
      

            	
              (ii)

            	
              sell,
      issue, grant or authorize the issuance or grant of (i) any securities or
      (ii) any instrument convertible into or exchangeable for any securities of
      JAG, except pursuant to rights previously
  granted;

            


    

     

    
      	
               
      

            	
              (iii)

            	
              amend
      or permit the adoption of any amendment to the Certificate of
      Incorporation or by-laws of the Company, or effect or authorize any
      recapitalization, reclassification of shares, stock split, reverse stock
      split or similar transaction;

            


    

     

    
      	
               
      

            	
              (iv)

            	
              adopt
      a plan of complete or partial liquidation or dissolution or resolutions
      providing for or authorizing such a liquidation or a
      dissolution;

            


    

     

    
      	
               
      

            	
              (v)

            	
              form
      any subsidiary or acquire any equity interest or other interest in any
      other entity;

            


    

     

    
      	
               
      

            	
              (vi)

            	
              lend
      money to any person or entity, or incur or guarantee any indebtedness
      (except that JAG may make routine borrowings in the ordinary course of
      business and in accordance with past
practices);

            


    

     

    
      	
               
      

            	
              (vii)

            	
              pay
      any bonus or make any profit-sharing or similar payment to, or increase
      the amount of the wages, salary, commissions, fringe benefits or other
      compensation or remuneration payable to, any of its employees, directors
      or officers; provided, however, that nothing herein shall prevent JAG or
      any of its Subsidiaries from paying to the JAG Executives any wages,
      salary, fringe benefits or other compensation or remuneration to which
      they are entitled under their employment
  agreements.

            


    

     

    
      	
               
      

            	
              (viii)

            	
              change
      any of its methods of accounting or accounting practices in any respect
      except as required by generally accepted accounting
      principles;

            


    

     

    
      	
               
      

            	
              (ix)

            	
              make
      any material tax election;

            


    

     

    
      	
               
      

            	
              (x)

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

            


    

     

    
      	
               
      

            	
              (xi)

            	
              authorize,
      agree, commit or enter into any of the actions described in clauses "(a)"
      through "(k)" of this Subsection
(b).

            


    

     

    
      	
              4.4

            	
              Delivery
      of Audited Financial Statements by the
Company

            


    

     

    The
Company shall deliver, and the Principal Shareholder shall cause the Company to
deliver, the Financial Statements to JAG no later than June 1,
2009.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

        -
34 -

      

    

     

    
      	
              4.5 

            	
              Preparation
      of Pro Forma Financials

            


    

     

    Promptly
after receipt by JAG of the Financials, the Company Shareholder Exchange Notices
(pursuant to Section 2.4.1) and the Debenture Notices (pursuant to Section
4.13), JAG shall cause its accountants and auditors to prepare the pro forma
financials necessary for inclusion in the Form 8-K to be filed in connection
with the Closing (the “Acquisition
8-K”). The
Company shall promptly cooperate with, and shall cause its accountants and
auditors to promptly cooperate with, JAG and its accountants and auditors in
addressing and resolving any issues that may arise, or clarifications that may
be needed, relating to the Financials and the pro forma financials.

     

    
      	
              4.6 

            	
              Support
      Agreement and Exchange Rights
Agreement

            


    

     

    
      	
               
      

            	
              (a)

            	
              The
      relevant parties shall enter into the Support Agreement and the Exchange
      Rights Agreement within such time frame prior to the completion of the
      Acquisition 8-K so as to permit the timely delivery of the final version
      of the Acquisition 8-K to the Private Placement investors in accordance
      with subparagraph 4.8 below.

            


    

     

    
      	
               
      

            	
              (b)

            	
              JAG
      and the Company shall cooperate in the preparation of the Form 8-K to be
      filed in connection with the Support Agreement and the Exchange Rights
      Agreement, which shall be filed by JAG within the required time period
      following the execution of such agreements by the respective
      parties.

            


    

     

    
      	
              4.7 

            	
              Preparation
      and Filing of Acquisition 8-K

            


    

     

    JAG and
the Company shall cooperate in the preparation of the Acquisition 8-K, which
shall be filed by JAG on, or immediately following, the Closing
Date.

     

    
      	
              4.8 

            	
              Delivery
      of Final Form 8-K to Private Placement
Investors

            


    

     

    When the
final version of the 8-K is completed and ready to be filed, the Company shall
deliver a copy of such 8-K to the Private Placement investors, for their review
in accordance with the Private Placement subscription agreements, not less than
ten (10) days prior to the Closing Date.

     

    
      	
              4.9 

            	
              Preparation
      and Filing of Schedule 14F-1 Information
  Statement

            


    

     

    JAG
shall, not less than ten (10) days prior to the Closing, file with the SEC and
mail to its stockholders a Schedule 14F-1 Information Statement pursuant to
Section 14(f) of the Exchange Act (the “Schedule
14F”) setting
forth, among other information required to be disclosed therein, the members of
the Board of Directors of JAG to take office post-Closing. The Company and the
Principal Shareholder shall assist JAG in the preparation of the Schedule
14F.

     

    
      	
              4.10

            	
              Resignation
      of JAG Executives

            


    

    


    
      	
               
      

            	
              (a)

            	
              The
      members of the Board of Directors of JAG immediately prior to the Closing
      shall deliver letters of resignation to JAG effective on the latest to
      occur of (i) ten days after the mailing of the Schedule 14F to JAG’s
      stockholders or (ii) ten days after filing the Schedule 14F with the
      SEC.

            


    

     


    
      
         


      

      
         


        
          

        

      

      
         


        -
35 -

      

    

     

    
      	
               
      

            	
              (b)

            	
              The
      members of the Board of Directors or members of JAG’s subsidiaries
      immediately prior to the Closing shall deliver letters of resignation to
      each applicable subsidiary, such resignations to be effective upon
      Closing.

            


    

     

    
      	
               
      

            	
              (c)

            	
              The
      officers of JAG and its subsidiaries immediately prior to the Closing
      shall deliver letters of resignation to JAG and each applicable
      subsidiary, such resignations to be effective upon
  Closing.

            


    

     

    
      	
              4.11 

            	
              Consulting
      Agreements with Former JAG
Executives

            


    

     

    On the
Closing Date and immediately following their resignation, the JAG Executives
shall enter into consulting agreements with JAG (or one of its subsidiaries),
upon terms and conditions to be agreed upon prior to the Closing, so as to
assist the Company in connection with various matters during an agreed upon
transition period.

     

    
      	
              4.12 

            	
              Long-Term
      Incentive Plan and S-8 Registration
Statement

            


    

     

    
      
        	
              	
                (a)

              	
                The
      parties acknowledge that JAG currently maintains the JAG 1999 Long-Term
      Incentive Plan (as amended to date, the “LTIP”) pursuant to which
      stock options and other stock-based incentives are issuable to employees
      and consultants of JAG.  The parties hereby agree that JAG shall
      continue to maintain the LTIP until there are no longer any stock options
      or other stock-based incentives remaining outstanding
      thereunder.

              


      

    

     

    
      
        	
              	
                (b)

              	
                The
      parties hereby acknowledge that as of the date hereof six million shares
      of Parent Common Stock issuable pursuant to the LTIP have been registered
      for resale pursuant to a Form S-8 Registration Statement filed with the
      SEC (the Form S-8 registration statement outstanding as of the Closing
      Date being the “S-8
      Registration Statement”). JAG shall maintain
      the S-8 Registration Statement in effect following the Closing until the
      date on which all of the JAG Common Shares subject to outstanding stock
      options or other stock based incentives have been sold by the applicable
      holders.  In the event that the SEC, at anytime, issues a stop
      order suspending the effectiveness of the S-8 Registration Statement, JAG
      shall promptly notify all holders of record of stock options and/or other
      stock-based incentives, then outstanding pursuant to the LTIP, and shall
      promptly take any and all actions necessary to cause there to be an
      effective Registration Statement on Form S-8 in effect for the resale of
      such JAG Common Shares. On, or prior to, the Closing Date, JAG shall file
      an S-8 Registration Statement, with reoffer prospectus, covering the
      resale of the JAG Executives’ options then outstanding (or to be
      outstanding) under the LTIP.

              


      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

        -
36 -

      

    

     

    
      
        	
                4.13

              	
                Conversion
      of Company Debentures

              


      

    

     

    Immediately prior to the Closing, the
Company and the Principal Shareholder shall cause the holders of the Company
Debentures (the “Debenture
Holder(s)”) to
convert their respective debentures (and all accrued interest thereon through
the date of conversion) into Company common shares immediately prior to the
Closing. In connection with such conversions the Company and the Principal
Shareholder shall cause each Debenture Holder to properly complete, execute and
deliver to JAG and Exchangeco the Debenture Notice no later than June 1,
2009.  Upon conversion of the Company Debentures in accordance with
the terms of the Debenture Notice, the Company Debentures will be cancelled and
the holders of the Company Debentures will be issued 2,523,000 Company common
shares, which will then be exchanged for the pro-rata number of JAG Common
Shares or Exchangeable Shares at the Closing in accordance with the terms of
this Agreement.

     

    
      	
              4.14

            	
              Exchange
      of Company Warrants

            


    

     

    At the
Closing, all of the Company Warrants will be cancelled and exchanged for
warrants of JAG in accordance with the terms of each Company
Warrant.

     

    
      	
              4.15 

            	
              Exchange
      of Company Options

            


    

     

    At the
Closing, all Company Options, to the extent not exercised prior to the Closing,
shall be cancelled and exchanged for (a) new options to purchase a number of JAG
Common Shares equal to the number of CardioGenics common shares into which the
cancelled Company Options were exercisable or (b) a number of JAG Common Shares
equal to the number of CardioGenics common shares into which the cancelled
Company Options were exercisable.

     

    
      	
              4.16 

            	
              Name
      Change; Post-Closing Information
Statement

            


    

     

    
      Immediately
following the Closing, JAG shall file with the SEC and mail to it’s stockholders
an appropriate Information Statement providing for (a) the change of JAG’s name
to “CardioGenics
Holdings, Inc.”  and (b) such other matters as JAG may deem
necessary or appropriate.

    

     

    
      	
              4.17 

            	
              Exchange
      Listing

            


    

     

    After the Closing, and upon JAG meeting
the minimum listing requirements for the American Stock Exchange or the NASDAQ
Capital Market, JAG shall promptly file and use its commercially reasonable
efforts to achieve an exchange listing for JAG.

     

    
      	
              4.18 

            	
              Notification

            


    

     

    
      	
               
      

            	
              (a)

            	
              During
      the Pre-Closing Period, the Company and the Principal Shareholder, as the
      case may be, shall promptly notify Exchangeco and JAG in writing
      of:

            


    

     

    
      	
               
      

            	
              (i)

            	
              the
      discovery by the Company and/or the Principal Shareholder of any event,
      condition, fact or circumstance that occurred or existed on or prior to
      the date of this Agreement and that caused or constitutes an inaccuracy in
      or breach of any representation or warranty made by the Company or the
      Principal Shareholder in this
Agreement;

            


    


    
      
         


      

      
         


        
          

        

      

      
         


        -
37 -

      

    

     

    
      	
               
      

            	
              (ii)

            	
              any
      event, condition, fact or circumstance that occurs, arises or exists after
      the date of this Agreement and that would cause or constitute an
      inaccuracy in or breach of any representation or warranty made by the
      Company and/or the Principal Shareholder in this Agreement if (A) such
      representation or warranty had been made as of the time of the occurrence,
      existence or discovery of such event, condition, fact or circumstance, or
      (B) such event, condition, fact or circumstance had occurred, arisen or
      existed on or prior to the date of this
  Agreement;

            


    

     

    
      	
               
      

            	
              (iii)

            	
              any
      breach of any covenant or obligation of the Company and/or the Principal
      Shareholder; and

            


    

     

    
      	
               
      

            	
              (iv)

            	
              any
      event, condition, fact or circumstance that is likely to make the timely
      satisfaction of any condition set forth in Section 5.2 or Section 5.3
      impossible or unlikely.

            


    

     

    
      	
               
      

            	
              (b)

            	
              During
      the Pre-Closing Period, JAG shall promptly notify the Company in writing
      of:

            


    

     

    
      	
               
      

            	
              (i)

            	
              the
      discovery by JAG or its Affiliates of any event, condition, fact or
      circumstance that occurred or existed on or prior to the date of this
      Agreement and that caused or constitutes an inaccuracy in or breach of any
      representation or warranty made by JAG or Exchangeco in this
      Agreement;

            


    

     

    
      	
               
      

            	
              (ii)

            	
              any
      event, condition, fact or circumstance that occurs, arises or exists after
      the date of this Agreement and that would cause or constitute an
      inaccuracy in or breach of any representation or warranty made by JAG or
      Exchangeco in this Agreement if (A) such representation or warranty had
      been made as of the time of the occurrence, existence or discovery of such
      event, condition, fact or circumstance, or (B) such event, condition, fact
      or circumstance had occurred, arisen or existed on or prior to the date of
      this Agreement;

            


    

     

    
      	
               
      

            	
              (iii)

            	
              any
      breach of any covenant or obligation of JAG, Callco or Exchangeco;
      and

            


    

     

    
      	
               
      

            	
              (iv)

            	
              any
      event, condition, fact or circumstance that is likely to make the timely
      satisfaction of any condition set forth in Section 5.2 or Section 5.3
      impossible or unlikely.

            


    

     

    
      	
              4.19 

            	
              Confidential
      Information

            


    

     

    The
Company and the Principal Shareholder agree that he, she or it shall not,
without the prior written consent of Exchangeco, permit the communication or
disclosure, directly or indirectly, of any Confidential Information of the
Company to any person other than to employees or Representatives of the Company
in furtherance of the Business or in connection with the transactions
contemplated herein, provided that such persons have agreed to the
non-disclosure of such Confidential Information.  Each of JAG and
Exchangeco agrees that it shall not, without the prior written consent of the
Company or the Principal Shareholder, permit the communication or disclosure,
directly or indirectly, of any Confidential Information of JAG or Exchangeco to
any person other than to employees or Representatives of JAG or Exchangeco in
furtherance of the Business or in connection with the transactions contemplated
herein, provided that such persons have agreed to the non-disclosure of such
Confidential Information. For the purposes of this Section, "Confidential
Information" means any knowledge or information relating to or concerning the
Intellectual Property or any other confidential information regarding the
property, business or affairs of the Company and similar information regarding
JAG or Exchangeco, as applicable.


    
      
         


      

      
         


        
          

        

      

      
         


        -
38 -

      

    

     

    ARTICLE 5

    CLOSING

     

    
      	
              5.1

            	
              Closing

            


    

     

    Subject
to this Article 5, the Closing shall take place at the Closing Time at the
offices of WeirFoulds LLP, The Exchange Tower, Suite 1600, P.O. Box 480, 130
King Street West, Toronto, Ontario, Canada M5X 1J5 or at such other place as may
be agreed upon by the parties hereto.

     

    
      	
              5.2 

            	
              Exchangeco's
      and JAG’s Conditions

            


    

     

    The
obligation of Exchangeco and JAG to complete the transactions contemplated by
this Agreement shall be subject to the satisfaction of, or compliance with, at
or before the time of Closing, each of the following conditions precedent (each
of which is hereby acknowledged to be inserted for the exclusive benefit of
Exchangeco and JAG and may be waived by them in whole or in part):

     

    
      	
               
      

            	
              (a)

            	
              Accuracy
      of Representations

            


    

     

    Each of
the representations and warranties made by the Company and the Principal
Shareholder in this Agreement and in each of the Closing Documents shall have
been accurate in all material respect as of the date of this Agreement, and
shall be accurate in all material respects as of the Closing Date as if made on
the Closing Date.

     

    
      	
               
      

            	
              (b)

            	
              Performance
      of Covenants

            


    

     

    All of
the covenants and obligations that the Company and the Principal Shareholder are
required to comply with or to perform at or prior to the Closing shall have been
complied with and performed in all material respects.

     

    
      	
               
      

            	
              (c)

            	
              Consents

            


    

     

    All third
party consents required to be obtained in connection with the transactions
contemplated by this Agreement from any Person or Governmental Authority shall have been
obtained, shall be in full force and effect and all relevant statutory,
regulatory or other governmental waiting periods, whether domestic, foreign or
supranational shall have expired.


    
      
         


      

      
         


        
          

        

      

      
         


        -
39 -

      

    

     

    
      	
               
      

            	
              (d)

            	
              Agreements
      and Documents

            


    

     

    Exchangeco
and JAG shall have received the following agreements and documents, each of
which shall be in full force and effect:

     

    
      	
               
      

            	
              (i)

            	
              the
      Support Agreement;

            


    

     

    
      	
               
      

            	
              (ii)

            	
              the
      Exchange Rights Agreement;

            


    

     

    
      	
               
      

            	
              (iii)

            	
              certificates
      from officers of the Company and/or the Company Shareholders as Exchangeco
      or JAG may reasonably request; and

            


    

     

    
      	
               
      

            	
              (iv)

            	
              an
      employment agreement between the Company and Gawad in form and substance
      satisfactory to Exchangeco and JAG.

            


    

     

    
      	
               
      

            	
              (e)

            	
              No
      Material Adverse Effect

            


    

     

    There
shall not have occurred any event, fact or circumstance which could result in a
material adverse effect on the Business, condition, assets, liabilities,
operations, financial performance or prospects of the Company.

     

    
      	
               
      

            	
              (f)

            	
              No
      Other Litigation

            


    

     

    Except as
disclosed in the Company Disclosure Schedule, there shall not be pending any
litigation (i) which, could have a material adverse effect on the Company
(ii) challenging or seeking to restrain or prohibit the consummation of the
transactions contemplated by this Agreement; (iii) relating to the
transactions contemplated by this Agreement and seeking to obtain any damages or
other relief.

     

    
      	
               
      

            	
              (g)

            	
              No
      Material Adverse Effect

            


    

     

    There
shall not have occurred any event, fact or circumstance which could result in a
material adverse effect on the Business, condition, assets, liabilities,
operations or financial performance of the Company.

     

    
      	
               
      

            	
              (h)

            	
              Private
      Placement

            


    

     

    The
Private Placement will have closed for proceeds to the Company of not less than
$1,500,000.


    
      
         


      

      
         


        
          

        

      

      
         


        -
40 -

      

    

     

    
      	
               
      

            	
              (i)

            	
              Certification

            


    

     

    The
representations and warranties of the Company and the Principal Shareholder in
Section 3.1 shall be certified as true and correct on Closing by Gawad, in his
capacity as Chief Executive Officer of the Company and James Essex, in his
capacity as Chief Financial Officer of the Company.

     

    
      	
               
      

            	
              (j)

            	
              Closing
      Date

            


    

     

    The
Closing shall occur on or before the Closing Date.

     

    
      	
              5.3

            	
              The
      Company’s and Principal Shareholder‘s
Conditions

            


    

     

    The
obligation of the Company and the Principal Shareholder to complete the
transactions contemplated by this Agreement shall be subject to the satisfaction
of, or compliance with, at or before the Closing Date, each of the following
conditions precedent (each of which is hereby acknowledged to be inserted for
the exclusive benefit of the Company and the Principal Shareholder and may be
waived by them in whole or in part):

     

    
      	
               
      

            	
              (a)

            	
              Accuracy
      of Representations

            


    

     

    Each of
the representations and warranties made by Exchangeco in this Agreement and in
each of the Closing Documents shall have been accurate in all material respect
as of the date of this Agreement, and shall be accurate in all material respects
as of the Closing Date as if made on the Closing Date.

     

    
      	
               
      

            	
              (b)

            	
              Performance
      of Covenants

            


    

     

    All of
the covenants and obligations that Exchangeco are required to comply with or to
perform at or prior to the Closing shall have been complied with and performed
in all material respects.

     

    
      	
               
      

            	
              (c)

            	
              Consents

            


    

     

    All third
party consents required to be obtained in connection with the transactions
contemplated by this Agreement from any Person or Governmental Authority shall
have been obtained, shall be in full force and effect and all relevant
statutory, regulatory or other governmental waiting periods, whether domestic,
foreign or supranational shall have expired.

     

    
      	
               
      

            	
              (d)

            	
              Agreements
      and Documents

            


    

     

    The
Company shall have received the following agreements and documents, each of
which shall be in full force and effect:

     

    
      	
               
      

            	
              (i)

            	
              the
      Support Agreement;

            


    

     

    
      	
               
      

            	
              (ii)

            	
              the
      Exchange Rights Agreement; and

            


    


    
      
         


      

      
         


        
          

        

      

      
         


        -
41 -

      

    

     

    
      	
               
      

            	
              (iii)

            	
              certificates
      from officers of JAG as the Company may reasonably
  request.

            


    

     

    
      	
               
      

            	
              (e)

            	
              No
      Other Litigation

            


    

     

    There
shall not be pending any litigation (i) which, could have a material
adverse effect on Exchangeco or its Affiliates (ii) challenging or seeking
to restrain or prohibit the consummation of the transactions contemplated by
this Agreement; (iii) relating to the transactions contemplated by this
Agreement and seeking to obtain any damages or other relief.

     

    
      	
               
      

            	
              (f)

            	
              No
      Material Adverse Effect

            


    

     

    There
shall not have occurred any event, fact or circumstance which could result in a
material adverse effect on the business, condition, assets, liabilities,
operations or financial performance of JAG.

     

    
      	
               
      

            	
              (g)

            	
              Private
      Placement

            


    

     

    The
Private Placement will have closed for proceeds not less than
$1,500,000.

     

    
      	
               
      

            	
              (h)

            	
              Certification

            


    

     

    The
representations and warranties of JAG in Section 3.2 shall be certified as true
and correct on Closing by the JAG Executives in their capacities as Chief
Executive Officer and Chief Financial Officer.

     

    
      	
               
      

            	
              (i)

            	
              Closing
      Date

            


    

     

    The
Closing shall occur on or before the Closing Date.

     

    
      	
              5.4 

            	
              Waiver

            


    

     

    Any Party
may waive, by notice to the other Parties, any condition set forth in this
Article 5 which is for its benefit.  No waiver by a Party of any
condition, in whole or in part, shall operate as a waiver of any other
condition.

     

    
      	
              5.5 

            	
              Failure
      to Satisfy Conditions

            


    

     

    If any
condition set forth in Section 5.2 or 5.3 is not satisfied on or before the time
of Closing, the Party entitled to the benefit of such condition (the "First
Party") may terminate this Agreement by notice in writing to the other
Party.  Upon such notice being given, the First Party shall be
released from all obligations hereunder.  If the First Party can show
that the condition or conditions which have not been satisfied and for which the
First Party has terminated this Agreement (a) are, or were during the
period between the date hereof and the Closing Date, reasonably capable of being
performed or caused to be performed by the other Party, or (b) have not
been satisfied by reason of a default by the other Party hereunder, the other
Party shall be in breach of its obligations hereunder; otherwise the other Party
shall also be released from all obligations hereunder.


    
      
         


      

      
         


        
          

        

      

      
         


        -
42 -

      

    

    
       

      ARTICLE 6

      INDEMNIFICATION

       

      
        	
                6.1

              	
                Definitions

              


      

       

      As used
in this Article 6:

       

      "Claim" means any act, omission
or state of facts and any demand, action, suit, proceeding, claim, assessment,
judgment or settlement or compromise relating thereto which may give rise to a
right to indemnification under Sections 6.2, 6.3 or 6.3;

       

      "Direct Claim" means any Claim
by an Indemnified Party against an Indemnifier which does not result from a
Third Party Claim;

       

      "Indemnifier" means any party
obligated to provide indemnification under this Agreement;

       

      "Indemnified Party" means any
person entitled to indemnification under this Agreement;

       

      "Indemnity Payment" means any
amount of Loss required to be paid pursuant to Sections 6.2, 6.3 or
6.3;

       

      "Loss" means any and all loss,
liability, damage, cost, expense, charge, fine, penalty or assessment, resulting
from or arising out of any Claim, including the costs and expenses of any
action, suit, proceeding, demand, assessment, judgment, settlement or compromise
relating thereto and all interest, punitive damages, fines and penalties and
reasonable legal fees and expenses incurred in connection
therewith;

       

      "Representative" means each
director, officer, employee, agent, solicitor, accountant, professional advisor
and other representative of an Indemnified Party; and

       

      "Third Party Claim" means any
Claim asserted against an Indemnified Party by any person who is not a party to
this Agreement or an Affiliate of such a party.

       

      
        	
                6.2

              	
                Indemnification
      by the Company and the Principal
Shareholder

              


      

       

      Subject
to Section 3.5, the Company and the Principal Shareholder shall jointly and
severally indemnify, defend and save harmless JAG and Exchangeco and each of its
Representatives from and against any and all Loss suffered or incurred by them,
as a direct or indirect result of, or arising in connection
with:


      
        
           


        

        
           


          
            

          

        

        
           


          - 43
-

        

      

       

      
        	
                 
      

              	
                (a)

              	
                any
      misrepresentation or breach of warranty made or given by the Company or
      the Principal Shareholder in this Agreement;
or

              


      

       

      
        	
                 
      

              	
                (b)

              	
                any
      misrepresentation or breach of warranty made or given by the Company or
      the Principal Shareholder in any Closing Document or in any document
      delivered pursuant to this Agreement or any Closing Document;
      or

              


      

       

      
        	
                 
      

              	
                (c)

              	
                any
      failure of the Company or the Principal Shareholder to observe or perform
      any covenant or obligation contained in this Agreement, any Closing
      Document or in any document delivered pursuant to any of them to be
      observed or performed by them.

              


      

       

      
        	
                6.3

              	
                Indemnification
      by JAG and Exchangeco

              


      

       

      Subject
to Section 3.5, JAG and Exchangeco shall indemnify, defend and save harmless the
Company and the Principal Shareholder and each of their respective
Representatives from and against any and all Loss suffered or incurred by them,
as a direct or indirect result of, or arising in connection with:

       

      
        	
                 
      

              	
                (a)

              	
                any
      misrepresentation or breach of any warranty made or given by JAG or
      Exchangeco in this Agreement;

              


      

       

      
        	
                 
      

              	
                (b)

              	
                any
      misrepresentation or breach of warranty made or given by JAG or Exchangeco
      in any Closing Document or in any document delivered pursuant to this
      Agreement or any Closing Document; or

              


      

       

      
        	
                 
      

              	
                (c)

              	
                any
      failure by either JAG or Exchangeco to observe or perform any covenant or
      obligation contained in this Agreement, any Closing Document or in any
      document delivered pursuant to any of them to be observed or performed by
      it.

              


      

       

      
        	
                6.4

              	
                Agency
      for Representatives

              


      

       

      Each
Indemnified Party agrees that it accepts each indemnity in favour of any of its
Representatives as agent and trustee of that Representative.  Each
party agrees that an Indemnified Party may enforce an indemnity in favour of any
of that party's Representatives on behalf of that Representative.

       

      
        	
                6.5

              	
                Notice
      of Third Party Claims

              


      

       

      If an
Indemnified Party receives notice of the commencement or assertion of any Third
Party Claim, the Indemnified Party shall give the Indemnifier reasonably prompt
notice thereof (including a copy of any Third Party Claim documentation received
by the Indemnified Party).  Such notice to the Indemnifier shall
describe the Third Party Claim in reasonable detail and shall indicate, if
reasonably practicable, the estimated amount of the Loss that has been or may be
sustained by the Indemnified Party.


      
        
           


        

        
           


          
            

          

        

        
           


          - 44
-

        

      

       

      
        	
                6.6

              	
                Defence
      of Third Party Claims

              


      

       

      The
Indemnifier may participate in or assume the defence of any Third Party Claim by
giving notice to that effect to the Indemnified Party not later than thirty (30)
days after receiving notice of that Third Party Claim (the "Notice
Period").  The Indemnifier's right to do so shall be subject to
the rights of any insurer or other party who has potential liability in respect
of that Third Party Claim.  The Indemnifier agrees to pay all of its
own expenses of participating in or assuming such defence.  The
Indemnified Party shall co-operate in good faith in the defence of each Third
Party Claim, even if the defence has been assumed by the Indemnifier and may
participate in such defence assisted by counsel of its own choice at its own
expense.  The Indemnifier shall not enter into any compromise or
settlement of any Third Party Claim without obtaining the prior written consent
of the Indemnified Party. If the Indemnified Party has not received notice
within the Notice Period that the Indemnifier has elected to assume the defence
of such Third Party Claim, the Indemnified Party may, at its option, elect to
settle or compromise the Third Party Claim or assume such defence, assisted by
counsel of its own choosing and the Indemnifier shall be liable for all
reasonable costs and expenses paid or incurred in connection therewith and any
Loss suffered or incurred by the Indemnified Party with respect to such Third
Party Claim.

       

      
        	
                6.7

              	
                Assistance
      for Third Party Claims

              


      

       

      The
Indemnifier and the Indemnified Party will use all reasonable efforts to make
available to the party which is undertaking and controlling the defense of any
Third Party Claim (the "Defending
Party"):

       

      
        	
                 
      

              	
                (a)

              	
                those
      employees whose assistance, testimony or presence is necessary to assist
      the Defending Party in evaluating and in defending any Third Party Claim;
      and

              


      

       

      
        	
                 
      

              	
                (b)

              	
                all
      documents, records and other materials in the possession of such party
      reasonably required by the Defending Party for its use in defending any
      Third Party Claim,

              


      

       

      and shall
otherwise cooperate with the Defending Party.  The Indemnifier shall
be responsible for all reasonable expenses associated with making such
documents, records and materials available and for all reasonable expenses of
any employees made available by the Indemnified Party to the Indemnifier
hereunder, which expense shall not exceed the actual cost to the Indemnified
Party associated with such employees.

       

      
        	
                6.8

              	
                Settlement
      of Third Party Claims

              


      

       

      If an
Indemnifier elects to assume the defence of any Third Party Claim as provided in
Section 6.6, the Indemnifier shall not be liable for any legal expenses
subsequently incurred by the Indemnified Party in connection with the defence of
such Third Party Claim.  However, if the Indemnifier fails to take
reasonable steps necessary to defend diligently such Third Party Claim within
thirty (30) days after receiving notice from the Indemnified Party that the
Indemnified Party bona
fide believes on reasonable grounds that the Indemnifier has failed to
take such steps, the Indemnified Party may, at its option, elect to assume the
defence of and to compromise or settle the Third Party Claim assisted by counsel
of its own choosing and the Indemnifier shall be liable for all reasonable costs
and expenses paid or incurred in connection therewith.  Without the
prior written consent of the Indemnified Party, the Indemnifier shall not
thereafter enter into any compromise or settlement of any Third Party Claim
which would lead to liability or create any financial or other material
obligation on the part of the Indemnified Party.


      
        
           


        

        
           


          
            

          

        

        
           


          - 45
-

        

      

       

      
        	
                6.9

              	
                Direct
      Claims

              


      

       

      Any
Direct Claim shall be asserted by giving the Indemnifier reasonably prompt
written notice thereof.  The Indemnifier shall then have a period of
thirty (30) days within which to respond in writing to such Direct
Claim.  If the Indemnifier does not so respond within such thirty (30)
day period, the Indemnifier shall be deemed to have rejected such Direct Claim,
and in such event the Indemnified Party shall be free to pursue such remedies as
may be available to the Indemnified Party.

       

      
        	
                6.10

              	
                Failure
      to Give Timely Notice

              


      

       

      A failure
to give timely notice as provided in this Article 6 shall not affect the rights
or obligations of any party, except and only to the extent that, as a result of
such failure, any party which was entitled to receive such notice was deprived
of its right to recover any payment under its applicable insurance coverage or
was otherwise directly and materially damaged as a result of such
failure.

       

      
        	
                6.11

              	
                Reductions
      and Subrogation

              


      

       

      If the
amount of any Loss at any time subsequent to the making of an Indemnity Payment
is reduced by any recovery, settlement or otherwise under or pursuant to any
insurance coverage, or pursuant to any claim, recovery, settlement or payment by
or against any other person, the amount of such reduction (less any costs,
expenses (including taxes) or premiums incurred in connection therewith),
together with interest thereon from the date of payment thereof at the Prime
Rate, shall promptly be repaid by the Indemnified Party to the
Indemnifier.  Upon making a full Indemnity Payment, the Indemnifier
shall, to the extent of such Indemnity Payment, be subrogated to all rights of
the Indemnified Party against any third party that is not an affiliate of the
Indemnified Party in respect of the Loss to which the Indemnity Payment relates,
but only if the Indemnifier shall then be in compliance with its obligations
under this Agreement in respect of such Loss.  Until the Indemnified
Party recovers full payment of its Loss, any and all claims of the Indemnifier
against any such third party on account of such Indemnity Payment shall be
postponed and subordinated in right of payment to the Indemnified Party's rights
against such third party.  Without limiting the generality or effect
of any other provision hereof, the Indemnified Party and Indemnifier shall duly
execute upon request all instruments reasonably necessary to evidence and
perfect such postponement and subordination.

       

      
        	
                6.12

              	
                Payment
      and Interest

              


      

       

      All
Losses shall bear interest at the Prime Rate, calculated and payable monthly,
both before and after judgment, with interest on overdue interest at the same
rate, from the date that the Indemnified Party disbursed funds, suffered damages
or Losses or incurred a Loss, liability or expense in respect of a Loss, to the
date of payment by the Indemnifier to the Indemnified Party.


      
        
           


        

        
           


          
            

          

        

        
           


          - 46
-

        

      

       

      ARTICLE 7

      GENERAL

       

      
        	
                7.1

              	
                Amendment

              


      

       

      This
Agreement may be amended, modified or supplemented only by the written agreement
of the parties hereto.

       

      
        	
                7.2

              	
                Expenses

              


      

       

      Each
party shall pay all expenses it incurs in authorizing, preparing, executing and
performing this Agreement and the transactions contemplated hereunder, whether
or not the Closing occurs, including all fees and expenses of its legal counsel,
brokers, accountants or other representatives or consultants.

       

      
        	
                7.3

              	
                No
      Finder's Fee

              


      

       

      Except as
set forth in the JAG Disclosure Schedule, no broker, finder, agent or similar
intermediary has acted on behalf of JAG or its Affiliates in connection with
this Agreement, any Related Agreement or the transactions contemplated hereby or
thereby, and there are no brokerage commissions, finders' fees or similar fees
or commissions payable in connection herewith or therewith based on any
agreement, arrangement or understanding with any of them or any action taken by
or on behalf of any of them.  JAG and Exchangeco acknowledge that the
Company has agreed to pay a finder's fee to Joseph J. Nese in connection with
the transactions contemplated herein.

       

      
        	
                7.4

              	
                Notices

              


      

       

      Any
notice, demand or other communication (in this Section, a "notice") required or permitted
to be given or made hereunder shall be in writing and shall be sufficiently
given or made if:

       

      
        	
                 
      

              	
                (a)

              	
                delivered
      in person during normal business hours on a Business Day, and left with a
      receptionist or other responsible employee of the relevant party at the
      applicable address set forth below;

              


      

       

      
        	
                 
      

              	
                (b)

              	
                sent
      by registered mail or receipted courier;
or

              


      

       

      
        	
                 
      

              	
                (c)

              	
                sent
      by any electronic means of sending messages, including telex or facsimile
      transmission, which produces a paper record ("Transmission")
      during normal business hours on a Business
Day;

              


      

       

      in the
case of a notice to the Company or the Principal Shareholder addressed to them
at:

       

      c/o
CardioGenics Inc.

      6295
Northam Drive, Unit No. 8

      Mississauga  ON  L4V
1H8

      Attention:  Dr.
Yahia Gawad

      Email:
ygawad@cardiogenics.com

      Fax:
(905) 673-9865


      
        
           


        

        
           


          
            

          

        

        
           


          - 47
-

        

      

       

      with a
copy to:

       

      WeirFoulds
LLP

      The
Exchange Tower, Suite 1600

      P.O. Box
480, 130 King Street West

      Toronto,
Ontario, Canada  M5X 1J5

       

      Attention:  Sanjay
Joshi

      Email:
sjoshi@weirfoulds.com

      Fax:  (416)
365-1876

       

      and in
the case of a notice to JAG or Exchangeco, addressed to it at:

      


      JAG Media
Holdings, Inc.

      6865 S.W.
18th
Street, Suite B13

      Boca
Raton, FL 33433

      Attention:  Thomas
J. Mazzarisi, CEO

      Email:
tjmazzarisi@jagmedia.biz

      Fax:  (866)
654-2837

      


      with a
copy to:

      


      JAG Media
Holdings, Inc.

      6865 S.W.
18th
Street, Suite B13

      Boca
Raton, FL 33433

      Attention:  Stephen
J. Schoepfer, COO

      Email:
steve@jagnotes.com

      Fax:
(866) 654-2837

       

      Each
notice sent in accordance with this Section shall be deemed to have been
received:

       

      
        	
                 
      

              	
                (d)

              	
                on
      the day it was delivered;

              


      

       

      
        	
                 
      

              	
                (e)

              	
                on
      the third Business Day after it was mailed or sent by courier (excluding
      each Business Day during which there existed any general interruption of
      postal or courier services due to strike, lockout or other cause);
      or

              


      

       

      
        	
                 
      

              	
                (f)

              	
                on
      the same day that it was sent by Transmission, or on the first Business
      Day thereafter if the day on which it was sent by Transmission was not a
      Business Day.

              


      


      
        
           


        

        
           


          
            

          

        

        
           


          - 48
-

        

      

       

      Any party
may change its address for notice by giving notice to the other party. Any
notice required to be given to the Principal Shareholder by JAG, Exchangeco or
Callco shall be given to the Company, as the Principal Shareholder’s
representative for the purpose of receiving such notices. Accordingly, the
Principal Shareholder hereby designates the Company to act as the Principal
Shareholder’s representative for such purpose and the Company hereby agrees to
act in such capacity.

       

      
        	
                7.5

              	
                Public
      Announcements

              


      

       

      No party
shall make any public statement or issue any press release concerning the
transactions contemplated by this Agreement, except as may be necessary, in the
opinion of counsel to the party making such disclosure, to comply with the
requirements of all Applicable Law, or as may otherwise be agreed by JAG and the
Company.  If any such public statement or release is so required or
agreed by JAG and the Company, the party making such disclosure shall consult
with the other party prior to making such statement or release, and the parties
shall use all reasonable efforts, acting in good faith, to agree upon a text for
such statement or release which is satisfactory to all parties.

       

      
        	
                7.6

              	
                Assignment
      and Enurement

              


      

       

      No party
may assign any rights or benefits under this Agreement to any other party, each
party agrees to perform its obligations under this Agreement itself, and not to
arrange in any way for any other party to perform those obligations; and no
assignment of benefits or arrangement for substituted performance by one party
shall be of any effect against the other party, except to the extent that other
party has consented to it in writing.  This Agreement shall enure to
the benefit of and be binding upon the parties and their respective successors
(including any successor by reason of amalgamation or statutory arrangement of
any party) and permitted assigns.

       

      
        	
                7.7

              	
                Independent
      Legal Advice

              


      

       

      Each of
the parties hereto acknowledges that each:

       

      
        	
                 
      

              	
                (a)

              	
                understands
      the parties' respective rights and obligations under this
      Agreement;

              


      

       

      
        	
                 
      

              	
                (b)

              	
                has
      received independent legal advice or has waived the receipt of such
      advice;

              


      

       

      
        	
                 
      

              	
                (c)

              	
                is
      signing this Agreement voluntarily;
and

              


      

       

      
        	
                 
      

              	
                (d)

              	
                acknowledges
      that the provisions of this Agreement are fair and equitable between the
      parties.

              


      

       

      
        	
                7.8

              	
                Further
      Assurances

              


      

       

      Each
party shall do such acts and shall execute such further documents, conveyances,
deeds, assignments, transfers and the like, and will cause the doing of such
acts and will cause the execution of such further documents as are within its
power as any other party may in writing at any time and from time to time
reasonably request be done and or executed, in order to give full effect to the
provisions of this Agreement and of each Closing Document.


      
        
           


        

        
           


          
            

          

        

        
           


          - 49
-

        

      

       

      
        	
                7.9

              	
                Counterparts

              


      

       

      This
Agreement may be executed in any number of counterparts.  Each
executed counterpart shall be deemed to be an original.  All executed
counterparts taken together shall constitute one agreement.

       

      
        	
                7.10

              	
                Facsimile
      or E-Mail Execution

              


      

       

      To
evidence the fact that it has executed this Agreement, a party may send a copy
of its executed counterpart to all other parties by facsimile transmission or in
PDF via e-mail.  That party shall be deemed to have executed this
Agreement on the date it sent such facsimile transmission or
e-mail.  In such event, such party shall forthwith deliver to the
other party the counterpart of this Agreement executed by such
party.

       

      TO WITNESS their agreement,
the parties have duly executed this Agreement.

       

      
        
          
            
              
                
                  
                    
                      
                        
                          
                            	
                                    CARDIOGENICS
      INC.

                                  	 
      	
                                    CARDIOGENICS
      EXCHANGECO INC.

                                  
	 
      	 
      	 
      	 
      	 
      
	
                                    Per:

                                  	/s/ 	 
      	
                                    Per:

                                  	/s/ 
	
                                    Name:

                                  	
                                    Yahia
      Gawad 

                                  	 
      	
                                    Name:

                                  	Brian
      S. Sterling
	
                                    Title:

                                  	
                                    Chief
      Executive Officer

                                  	 
      	
                                    Title:

                                  	President
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	
                                    JAG
      MEDIA HOLDINGS, INC.

                                  
	 
      	 
      	 
      	 
      	 
      
	
                                    /s/ 

                                  	 
      	
                                    Per:

                                  	/s/ 
	
                                    Yahia
      Gawad, Principal Shareholder

                                  	 
      	
                                    Name:

                                  	
                                    Thomas
      J. Mazzarisi

                                  
	
                                      

                                  	 
      	
                                    Title:

                                  	
                                    Chairman
      & Chief Executive
Officer

                                  


                          

                        

                      

                    

                  

                

              

            

          

        


        
          
             


          

          
             


            
              

            

          

          
             


            - 50
-

          

        

      

       

      ANNEX 1

       

       

      COMPANY SHAREHOLDER EXCHANGE
NOTICE

       

      
        
           


        

        
           


          
            

          

        

        
           


          - 51
-

        

      

      


      COMPANY
SHAREHOLDER EXCHANGE NOTICE

       

      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            	
                                                    To:

                                                  	
                                                    JAG
      Media Holdings, Inc. (“JAG
      Media”)

                                                  
	 
      	
                                                    CardioGenics
      Exchangeco Inc. (“Exchangeco”)

                                                  
	 
      	
                                                    CardioGenics
      Inc. (“CardioGenics”)

                                                  
	 
      	
                                                    Yahia
      Gawad (“Principal
      Shareholder”)

                                                  
	 
      	 
      
	
                                                    From:

                                                  	 
      	 
      
	 
      	
                                                    {shareholder’s
      name}

                                                  
	 
      	 
      
	 
      	
                                                      

                                                  	 
      
	 
      	
                                                    {shareholder’s
      address}

                                                  
	 
      	 
      
	 
      	
                                                      

                                                  	 
      
	 
      	
                                                    {shareholder’s
      address}

                                                  
	 
      	 
      
	
                                                    Date:

                                                  	
                                                    June
      1, 2009

                                                  
	 
      	 
      
	
                                                    Re:

                                                  	
                                                    Share
      Purchase Agreement between JAG Media, Exchangeco, CardioGenics and the
      Principal Shareholder dated May 22, 2009 (the “Share Purchase
      Agreement”)

                                                  


                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

      


      The
undersigned shareholder of CardioGenics Inc. hereby represents, warrants and
agrees as follows:

      


      (1)           As
of the date of this notice I am the owner of  ___________________
common shares of CardioGenics and, except for the above referenced shares, do
not own any other shares of CardioGenics (the “Purchased Shares”).
I  [   ] am /
[   ] am
not {please select the
appropriate box} a “resident” of Canada as defined in the Income Tax Act
(Canada).

      


       (2)           Prior
to the Closing, I shall deliver to CardioGenics a properly completed and
executed “Company Shareholder
Exchange Election,” on a form to be provided by CardioGenics, pursuant to
which I will irrevocably elect to receive my pro-rata allocation of either “JAG
Media Common Shares” or “Exchangeable Shares” in accordance with the terms of
the Share Purchase Agreement, in exchange for my Purchased Shares.

      


      (3)           Subject
to the Closing as set forth in the Share Purchase Agreement, I shall deliver to
Exchangeco at, or prior to, the Closing original and bona fide stock
certificates representing the Purchased Shares duly endorsed in blank (and
accompanied by a properly completed and executed stock power in form reasonably
acceptable to JAG Media) for transfer against delivery of share certificates
representing my pro rata allocation of Exchangeable Shares or JAG Common Shares
pursuant to the Share Purchase Agreement and as set forth in my executed “Company Shareholder Exchange
Election”.

      


      {Signature(s)
Appear on Following Page}

       

      
        
           


        

        
           


          
            

          

        

        
           


          - 52
-

        

      

      
        


        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      	
                                              If
      shareholder is a corporation, limited liability company, partnership or
      other entity:

                                            	 
      	
                                              If
      shareholder is an individual:

                                            
	 
      	 
      	 
      
	 	 
      	
                                              
                                                X

                                              

                                            
	
                                              (Print
      or Type Name of Entity)

                                            	 
      	
                                              (Signature)

                                            
	 	 	 
	
                                              
                                                X

                                              

                                            	 
      	
                                                

                                            
	
                                              (Signature
      of Authorized Signatory)

                                            	
                                                  

                                            	
                                                  

                                            
	 
      	 
      	
                                              (Print
      or Type Name)

                                            
	 
      	 
      	 
      
	
                                              
                                                (Print
      Name of Authorized Signatory)

                                              

                                            	 
      	 
      
	 	 	 
	 
      	 
      	 
      
	
                                              (Title
      of Authorized Signatory)

                                            	 
      	 
      
	 	 	 
	 
      	 
      	 
      
	
                                              (Type
      of Entity)

                                            	 
      	 
      


                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

         

        
          
             


          

          
             


            
              

            

          

          
             


            - 53
-

          

        

         

        ANNEX 2

        


         

        DEBENTURE
NOTICE



        
          
             


          

          
             


            
              

            

          

          
             


          

        

        


        DEBENTURE
NOTICE

        


        
          
            
              
                
                  
                    
                      
                        
                          
                            	
                                    To:

                                  	
                                    JAG
      Media Holdings, Inc. (“JAG
      Media”)

                                  
	 
      	
                                    CardioGenics
      Exchangeco Inc. (“Exchangeco”)

                                  
	 
      	
                                    CardioGenics
      Inc. (“CardioGenics”)

                                  
	 
      	
                                    Yahia
      Gawad (“Principal
      Shareholder”)

                                  
	 
      	 
      
	
                                    From:

                                  	
                                        

                                  	 
      
	 
      	
                                    {debenture
      holder’s name}

                                  
	 
      	 
      
	 
      	
                                       

                                  	 
      
	 
      	
                                    {debenture
      holder’s address}

                                  
	 
      	 
      
	 
      	
                                       

                                  	 
      
	 
      	
                                    {debenture
      holder’s address}

                                  
	 
      	 
      
	
                                    Date:

                                  	
                                    June
      1, 2009

                                  
	 
      	 
      
	
                                    Re:

                                  	
                                    Convertible
      Debenture dated ______________________ between CardioGenics, as Lender,
      and ___________________________________, as Holder, in the original
      principal amount of US$_______________ (the “Debenture”)

                                  


                          

                        

                      

                    

                  

                

              

            

          

        

        


        The
undersigned Holder of the Debenture hereby represents, warrants and agrees as
follows:

        


        (1)           As
of the date of this notice I am the Holder of the Debenture and, except for the
Debenture, do not hold any other convertible debentures or debt instruments of
CardioGenics. I  [   ] am /
[   ] am
not {please select the
appropriate box} a “resident” of Canada as defined in the Income Tax Act
(Canada).

        


         (2)           In
accordance with the terms of the Share Purchase Agreement dated May 22, 2009
between JAG Media, CardioGenics, Exchangeco and the Principal Shareholder (the
“Share Purchase
Agreement”) and subject to the Closing as set forth in the Share Purchase
Agreement I shall, immediately prior to the Closing, deliver to CardioGenics a
properly completed and executed notice of conversion under the Debenture, on a
form to be provided by CardioGenics, pursuant to which I will irrevocably elect
to convert into common shares of CardioGenics, prior to the Closing, the
outstanding principal amount of the Debenture, and all accrued interest thereon
through the date of such conversion notice, in accordance with the terms of the
Debenture.

        


        (3)           Simultaneous
with the conversion of the Debenture, I will also provide CardioGenics with a
properly completed and executed “Company Shareholder Exchange
Election,” on a form to be provided by CardioGenics, pursuant to which I
will irrevocably elect to receive my pro-rata allocation of either “JAG Media
Common Shares” or “Exchangeable Shares” in accordance with the terms of the
Share Purchase Agreement, in exchange for the common shares of CardioGenics
issued to me upon conversion of the Debenture (the “Purchased
Shares”).

        


        (4)           Subject
to the Closing as set forth in the Share Purchase Agreement, I shall deliver to
Exchangeco at, or prior to, the Closing original and bona fide stock
certificates representing the Purchased Shares duly endorsed in blank (and
accompanied by a properly completed and executed stock power in form reasonably
acceptable to JAG Media) for transfer against delivery of share certificates
representing my pro rata allocation of Exchangeable Shares or JAG Common Shares
pursuant to the Share Purchase Agreement and as set forth in my executed “Company Shareholder Exchange
Election”.

        


        {Signature(s)
Appears on Following Page}


        
          
             


          

          
            -1-

            
              

            

          

          
             


          

        

         

        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                
                                                  
                                                    	
                                                            If
      Holder is a corporation, limited liability company, partnership or other
      entity:

                                                          	 	
                                                            If
      Holder is an individual:

                                                          
	 	 	 
	 
      	 	 
      
	
                                                            (Print
      or Type Name of Entity)

                                                          	 	
                                                            
                                                              X

                                                            

                                                          
	 
      	 	
                                                            (Signature)

                                                          
	
                                                            
                                                              X

                                                            

                                                          	 	 
      
	
                                                            (Signature
      of Authorized Signatory)

                                                          	 	 
	
                                                            
                                                               

                                                            

                                                          	 	  
      
	
                                                            
                                                              (Print
      Name of Authorized Signatory)

                                                            

                                                          	 	
                                                            (Print
      or Type Name)

                                                          
	 	 	 
	 
      	 	 
      
	
                                                            (Title
      of Authorized Signatory)

                                                          	 	 
      
	 	 	 
	 
      	 	 
      
	
                                                             (Type
      of Entity)

                                                          	 	 
      


                                                  

                                                

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

         

        
          
             


          

          
            -2-