**ASSET
      PURCHASE AGREEMENT**




**Among**




**COLLECTORS
      UNIVERSE, INC.,**




**GEMPRINT
      CORPORATION,**




**CVF
      TECHNOLOGIES CORPORATION,**




**HEPTAGON
      INVESTMENTS LTD.**




**and**




**1456733
      ONTARIO, INC.**




**Dated:**




**November
      25, 2005**













ARTICLE
      I DEFINITIONS                                                                                 
                                                              
  1


1.1 Specific.                                                                                                                                                    
        1


1.2 General.                                                                                                                                                     
      11




ARTICLE
      II SALE
      AND
      PURCHASE OF
      ASSETS                                                                                                 
11


2.1 Assets
      to
      be
      Transferred.                                                                                                                      
11


2.2 Excluded
      Assets.                                                                                                                                     
11


2.3 Title
      to
      Purchased
      Assets.                                                                                                                     
12


2.4 Consents
      to
      Assignment.                                                                                                                       
12




ARTICLE
      III ASSUMPTION
      OF
      LIABILITIES                                                                                                         
12


3.1 Assumed
      Liabilities                                                                                                                                  12


3.2 Excluded
      Liabilities.                                                                                                                                 
13


3.3 Contested
      Obligations.                                                                                                                           
15




ARTICLE
      IV PURCHASE
      PRICE, ESCROW, PAYMENT AND RELATED
      MATTERS                                     
15


4.1 Purchase
      Price.                                                                                                                                         
15


4.2 Contingent
      Payments                                                                                                                              
15


4.3 Escrow.                                                                                                                                                      
      16


4.4 Payment
      of the Purchase
      Price.                                                                                                              16


4.5 Disbursement
      Schedule                                                                                                                          
16


4.6 Transfer
      Taxes                                                                                                                                          
17


4.7 Allocation
      of Purchase
      Price.                                                                                                                 
17


4.8 [Intentionally
      omitted.]                                                                                                                             17


4.9 [Intentionally
      omitted.]                                                                                                                            
17


4.10 GST
      Election                                                                                                                                             
17


4.11 Accounts
      Receivable
      Election                                                                                                               
17


4.12 Deferred
      Revenue
      Election                                                                                                                      17




ARTICLE
      V CLOSING                                                                                                                                                               
18


5.1 Time
      and
      Place                                                                                                                                          
18


5.2 Transactions
      Upon the Execution of this
      Agreement                                                                         18


5.3 Transactions
      at the
      Closing.                                                                                                                   
18




ARTICLE
      VI REPRESENTATIONS
      AND WARRANTIES OF SELLER, CVF AND
      HEPTAGON                     
20


6.1 Organization;
      Authority; Due
      Authorization.                                                                                       20


6.2 No
      Violation                                                                                                                                               
21


6.3 Licenses;
      Regulatory and Other
      Approvals.                                                                                        
22


6.4 Title
      to
      Purchased
      Assets                                                                                                                       
22


6.5 Financial
      Condition.                                                                                                                                  
22


6.6 Tax
      Matters.                                                                                                                                               
25


i


6.7 Compliance
      with Applicable Laws; Governmental
      Matters.                                                              
26


6.8 Litigation.                                                                                                                                                   
      28


6.9 Property
      of
      Seller.                                                                                                                                     
29


6.10 Agreements.                                                                                                                                              
      31


6.11 Labor
      and
      Employment
      Matters.                                                                                                            
32


6.12 Employee
      Benefits                                                                                                                                     33


(a) Compliance
      with Applicable Law,
      etc                                                                             33


(b) Pension
      Plan                                                                                                                      
33


6.13 Insurance.                                                                                                                                                 
      34


6.14 Customers,
      Licensees and
      Suppliers.                                                                                                   
34


6.15 Potential
      Conflicts of
      Interest.                                                                                                               
34


6.16 Certain
      Transactions                                                                                                                               
34


6.17 Solvency.                                                                                                                                                  
      35


6.18 Books
      and
      Records.                                                                                                                                
35


6.19 Delivery
      of
      Documents.                                                                                                                          
35


6.20 Subsidiaries                                                                                                                                              
      35


6.21 No
      Broker                                                                                                                                                  
35


6.22 Non-Residency                                                                                                                                        
      35


6.23 Full
      Disclosure.                                                                                                                                        
35




ARTICLE
      VII REPRESENTATIONS
      AND WARRANTIES OF
      BUYER                                                            
    37


7.1 Due
      Incorporation.                                                                                                                                   37


7.2 Authority
      to Execute and Perform
      Agreements.                                                                                  37


7.3 Due
      Authorization;
      Enforceability                                                                                                         37


7.4 No
      Violation                                                                                                                                              
37


7.5 Regulatory
      and Other
      Approvals.                                                                                                         
38


7.6 No
      Broker.                                                                                                                                                 
38


7.7 Investment
      Canada
      Act                                                                                                                           38




ARTICLE
      VIII COVENANTS
      AND AGREEMENTS OF THE PARTIES EFFECTIVE PRIOR TO
      CLOSING       38


8.1 Business
      Examinations and Physical Investigations of Purchased
      Assets                                  
38


8.2 Cooperation;
      Consents.                                                                                                                         
39


8.3 Preservation
      and Conduct of
      Business.                                                                                              
39


8.5 Interim
      Seller Financial
      Statements                                                                                                       
41


8.6 Notices.                                                                                                                                                     
      42


8.7 Non-Competition                                                                                                                                     
      42


8.8 Employment
      Matters.                                                                                                                               42


8.9 No
      Solicitation or
      Negotiation                                                                                                                43


8.10 Risk
      of
      Loss                                                                                                                                              
43


8.11 Transition
      Assistance.                                                                                                                           
43


8.12 Assistance
      in Transfer of Records and
      Data.                                                                                     
44


8.13 Change
      of
      Record
      Title                                                                                                                           
44


8.14 Meeting
      of Seller’s
      Shareholders                                                                                                          
44


8.15 Bulk
      Sales                                                                                                                                                   44


8.16 GST
      Registration                                                                                                                                      
44


ii


8.17 [Intentionally
      omitted.]                                                                                                                           
44


8.18 SIL                                                                                                                                                              
      44


8.19 Class
      B
      Stock                                                                                                                                            
44




ARTICLE
      IX CONDITIONS
      PRECEDENT TO THE OBLIGATION OF EACH PARTY TO
      CLOSE                   
45


9.1 No
      Action
      or
      Proceeding.                                                                                                                       
45


9.2 Governmental
      and Other
      Approvals.                                                                                                    
45


9.3 Shareholder
      Approval                                                                                                                             
45




ARTICLE
      X CONDITIONS
      PRECEDENT TO THE OBLIGATION OF BUYER TO
      CLOSE                               
45


10.1 Representations
      and
      Warranties                                                                                                        
45


10.2 Performance
      of
      Covenants                                                                                                                    46


10.3 No
      Adverse
      Change                                                                                                                              
46


10.4 Opinion
      of Counsel to
      Seller.                                                                                                               
46


10.5 Litigation                                                                                                                                                 
      46


10.6 Pay-Off
      Letters.                                                                                                                                      
46


10.7 Non-Competition
      Agreements.                                                                                                            
47


10.8 [Intentionally
      omitted.]                                                                                                                         
47




ARTICLE
      XI CONDITIONS
      PRECEDENT TO THE OBLIGATION OF SELLER TO
      CLOSE                            
47


11.1 Representations
      and
      Warranties                                                                                                        
47


11.2 Performance
      of
      Covenants.                                                                                                                  47




ARTICLE
      XII COVENANTS
      AND AGREEMENTS OF THE PARTIES AFTER
      CLOSING                               
47


12.1 Continuation
      of
      Existence.                                                                                                                  
47


12.2 Change
      Seller’s
      Name                                                                                                                           47


12.3 NWT
      Receivable                                                                                                                                    48


12.4 Refunds
      and
      Remittances                                                                                                                     48




ARTICLE
      XIII INDEMNIFICATION                                                                                                                           
      48


13.1 Indemnification
      by Seller, CVF and
      Heptagon.                                                                                
48


13.2 Indemnification
      by
      Buyer                                                                                                                     49


13.3 Computation
      of
      Losses                                                                                                                        
49


13.4 Notice
      to
      Indemnifying
      Party.                                                                                                             
50


13.5 Third
      Party
      Claims.                                                                                                                                50


13.6 Survival
      of Representations and Covenants of Seller and the
      Shareholders                             
51


13.7 Survival
      of Representations and Covenants of
      Buyer                                                                   
52


13.8 Determination
      of Indemnification Amounts;
      Limitations.                                                             
52


13.9 No
      Waiver
      Relating to Claims for
      Fraud                                                                                           
53


13.10 Disbursements                                                                                                                                      
      53




iii


ARTICLE
      XIV TERMINATION;
      REMEDIES                                                                                                              
53


14.1 Termination
      Without
      Default                                                                                                              
53


14.2 Termination
      Upon
      Default                                                                                                                   
54


14.3 Specific
      Performance.                                                                                                                           
54


14.4 Attorneys’
      Fees                                                                                                                                    
54




ARTICLE
      XV EXPENSES;
      CONFIDENTIALITY                                                                                                      
55


15.1 Expenses.                                                                                                                                                
      55


15.2 Confidentiality                                                                                                                                       
      55


15.3 Publicity.                                                                                                                                                 
      56




ARTICLE
      XVI NOTICES                                                                                                                                                 
      56


16.1 Notices.                                                                                                                                                   
      56




ARTICLE
      XVII MISCELLANEOUS                                                                                                                               
      57


17.1 Further
      Assurances.                                                                                                                             
57


17.2 Modifications
      and Amendments; Waivers and
      Consents.                                                            
58


17.3 Entire
      Agreement.                                                                                                                                 
58


17.4 Governing
      Law and
      Venue                                                                                                                  
58


17.5 Binding
      Effect.                                                                                                                                       
58


17.6 Counterparts/Facsimile
      Signatures.                                                                                                   
59


17.7 Section
      Headings.                                                                                                                                  59


17.8 Currency.                                                                                                                                                
      59


17.9 Severability.                                                                                                                                           
      59


17.10 No
      Third
      Party
      Rights.                                                                                                                         
59


17.11 Construction.                                                                                                                                          59


17.12 Time                                                                                                                                                         
      59


17.13 No
      Contra
      Proferentem                                                                                                                         
59





iv


Annex


Annex
      I  Shareholders




Exhibits


Exhibit
      A  Escrow
      Agreement


Exhibit
      B  Non-Competition
      Agreement


Exhibit
      C  Lock-Up
      Agreement


Exhibit
      D  Opinion
      of Seller’s Counsel




Schedules


Schedule
      1.1(a) Assumed
      Contracts


Schedule
      1.1(b) Prepaid
      Items


Schedule
      6.1 Jurisdictions


Schedule
      6.2 No
      Violations


Schedule
      6.3(a) Licenses;
      Required Governmental Approvals


Schedule
      6.3(b) Required
      Contractual Consents


Schedule
      6.4 Liens
      to
      be Released


Schedule
      6.5(a) Financial
      Statements


Schedule
      6.5(b) No
      Undisclosed Liabilities


Schedule
      6.5(c) Inventories


Schedule
      6.5(d) Accounts
      Receivable


Schedule
      6.5(e) Accounts
      Payable


Schedule
      6.5(f) Absence
      of Changes


Schedule
      6.6 Tax
      Matters


Schedule
      6.7(a)No
      Actions by Authorities


Schedule
      6.7(b) Hazardous
      Substances


Schedule
      6.8 Litigation


Schedule
      6.9(a) Tangible
      Personal Property


Schedule
      6.9(b) Intellectual
      Property


Schedule
      6.9(c)  Real
      Estate


Schedule
      6.10 Agreements


Schedule
      6.11           
L abor
      Agreements


Schedule
      6.12(b) Pension
      Plan


Schedule
      6.13 Insurance


Schedule
      6.14 Customers,
      Licensees and Suppliers


Schedule
      6.15 Conflicts
      of Interest


Schedule
      6.16 Certain
      Transactions




Schedule
      6.1(A)(c) Shareholders
      - No Violations


Schedule
      6.1(A)(d) Shareholders-
      Consents










v




A SSET
      PURCHASE AGREEMENT




THIS
      ASSET PURCHASE AGREEMENT (this “ Agreement ”)
      dated
      as of November 25, 2005 is made and entered into by and among Collectors
      Universe, Inc., a Delaware corporation (“ Buyer ”),
      Gemprint Corporation, a corporation incorporated pursuant to the laws of Canada
      (“ Seller ”),
      CVF
      Technologies Corporation, a Nevada corporation (“ CVF ”),
      Heptagon Investments Ltd., a British Virgin Islands corporation (“ Heptagon ”),
      and
      1456733 Ontario, Inc., an Ontario, Canada corporation (“ Shepherd
      Group ”).




RECITALS




A.  Seller
      is
      engaged in the business of maintaining and marketing a non-invasive
      identification and registration system for diamonds and other
      gemstones.




B.  CVF,
      Heptagon and Shepherd Group (collectively, the “ Shareholders ”)
      own
      64.9%, 4.45%, and 11.6%, respectively, of the issued and outstanding stock
      of
      Seller.




C.  CVF
      and
      Heptagon have each made loans to Seller and hold substantially all of the
      indebtedness of Seller.




D.  Buyer
      wishes to purchase from Seller the Business (as defined below) together with
      the
      Purchased Assets (as defined below), and to assume the Assumed Liabilities
      (as
      defined below), and Seller wishes to sell to Buyer the Business together with
      the Purchased Assets and to have Buyer assume the Assumed Liabilities, upon
      the
      terms and conditions of this Agreement.




NOW,
      THEREFORE, in consideration of the mutual promises and covenants set forth
      herein, the parties hereby agree as follows:




ARTICLE
      I




DEFINITIONS




1.1  Specific . When
      used in this Agreement, the following terms shall have the respective meanings
      set forth below:




“ Accounts
      Receivable ”
of
      a
      Person shall mean all accounts, notes, accounts receivable, payment intangibles,
      contract rights, drafts, and other forms of claims, demands, instruments,
      receivables and rights to the payment of money or other forms of consideration,
      whether for goods or other property sold, leased or licensed, services performed
      or to be performed, or otherwise, owned by that Person or in which that Person
      has any interest, together with all guarantees, security agreements and other
      rights and interests guaranteeing or securing the same.




“ Affiliate ”
shall
      mean with respect to any Person (i) a Person directly or indirectly
      controlling, controlled by or under common control with such Person, (ii) a
      Person owning or controlling 10% or more of the outstanding voting securities
      of
      such Person or (iii) an officer, director, member or partner of such
      Person. When the Affiliate is an officer, director, member or


1




partner
      of such Person, any other Person for which the Affiliate acts in that capacity
      shall also be considered an Affiliate. For these purposes, control means the
      possession, direct or indirect, of the power to direct or cause the direction
      of
      the management and policies of a Person, whether its the ownership of voting
      securities, by contract or otherwise.




“ Agreement ”
shall
      mean this Asset Purchase Agreement, including all exhibits and schedules
      thereto, as the same may hereafter be amended, modified or supplemented from
      time to time in accordance with the provisions of Section 17.2 .




“ Alternative
      Proposal ”
shall
      mean a proposal or offer (other than by Buyer) for a stock purchase, asset
      acquisition, merger, consolidation or other business combination involving
      Seller or any proposal to acquire in any manner a direct or indirect substantial
      equity interest in, or all or any substantial part of the assets of, Seller
      (including without limitation, any debt or equity interests in Seller held
      by
      any Shareholder, or any interest in CVF).




“ Applicable
      Authority ”
shall
      have the meaning specified in Section 6.7(b) .




“ Applicable
      Law ”
shall
      mean, with respect to any Person, any domestic or foreign, federal, state,
      provincial or local statute, law, ordinance, rule, administrative
      interpretation, regulation, order, writ, injunction, directive, judgment, decree
      or other requirement of any Authority applicable to such Person or any of its
      Affiliates or any of their respective properties, assets, officers, directors,
      general partners, managers, employees, consultants or agents (in connection
      with
      such officer’s, director’s, general partner’s, manager’s, employee’s,
      consultant’s or agent’s activities on behalf of such Person or any of its
      Affiliates).




“ Assumed
      Contracts ”
shall
      mean Seller Contracts specified in Schedule
      1.1(a) and,
      subject to the terms and conditions of Section
      8.3 ,
      all
      Contracts entered into by Seller in the ordinary course of business and in
      accordance with the terms of this Agreement after the date hereof, but shall
      not
      include any Deferred Item until a Deferred Consent is obtained.




“ Assumed
      Liabilities ”
shall
      have the meaning specified in Section 3.1 .




“ Authority ”
shall
      mean any governmental, regulatory or administrative body, agency or authority,
      any court of judicial authority, any arbitrator or any public, private or
      industry regulatory authority, whether Federal, state, local or
      foreign.




“ Books
      and Records ”
of
      a
      Person shall mean all books and records, ledgers, employee records, customer
      lists, files, correspondence, computer data bases, accounting information and
      other records of every kind, whether written, computerized or maintained in
      any
      other medium, which are owned by that Person or in which that Person has any
      interest.




“ Business ”
shall
      mean a non-invasive identification and registration system for diamonds and
      other gemstones conducted by Seller using the Purchased Assets, as currently
      constituted and operated and as the same continues to be constituted and
      operated until the Closing.




“ Business
      Day ”
shall
      mean a day other than a Saturday, Sunday or other day on which commercial banks
      in Los Angeles, California are authorized or required by Applicable Law to
      close.


2




“ Buyer ”
shall
      mean Collectors Universe, Inc. a Delaware corporation.




“ Buyer
      Documents ”
shall
      mean this Agreement and all other agreements, instruments and certificates
      to be
      executed and delivered by Buyer in connection with this Agreement.




“ Cash ”
shall
      mean money, currency or a credit balance in a deposit account or “money market”
account at a bank, brokerage firm or other financial institution.




“ Cash
      Equivalents ”
shall
      mean (i) marketable direct obligations issued or unconditionally guaranteed
      by
      the United States or Canadian Government or issued by any agency thereof and
      backed by the full faith and credit of the United States or Canada, in each
      case
      maturing within one (1) year from the date of acquisition, (ii) marketable
      direct obligations issued by any state of the United States of America, any
      province of Canada or any political subdivision thereof, (iii) commercial
      paper issued by any bank or any bank holding company owning any bank maturing
      no
      more than one (1) year from the date of its creation and, at the time of
      acquisition, and (iv) certificates of deposit or bankers’ acceptances maturing
      within one (1) year from the date of acquisition issued by any commercial bank
      organized under the laws of the United States of America, Canada or any state
      or
      province thereof having combined capital and surplus of not less than
      $250,000,000.




“ Closing ”
shall
      mean the consummation of the transactions contemplated in this
      Agreement.




“ Closing
      Date ”
shall
      mean the date upon which the Closing occurs.




“ Closing
      Payment ”
shall
      have the meaning specified in Section 4.4 .




“ Code ”
shall
      mean the Internal Revenue Code of 1986, as amended.




“ Contingent
      Payment ”
shall
      have the meaning specified in Section 4.2




“ Contracts ”
of
      a
      Person shall mean all contracts, agreements, warranties, guaranties, indentures,
      bonds, options, leases, subleases, mortgages, plans, collective bargaining
      agreements, licenses, registration or verification agreements, maintenance
      or
      support agreements, commitments or binding arrangements of any nature
      whatsoever, express or implied, written or unwritten, and all amendments
      thereto, entered into or binding upon that Person or to which any property
      of
      that Person may be subject.




“ Crystal
      Beam ”
shall
      mean Crystal Beam Melody, Inc., a Delaware corporation.




“ CVF ”
shall
      have the meaning specified in the Preamble.




“ Deferred
      Consent ”
shall
      have meaning specification in Section 2.4 .




“ Deferred
      Item ”
shall
      have meaning specification in Section 2.4 .




“ Disbursement
      Schedule ”
shall
      have the meaning specified in Section 4.5 .


3




“ Effective
      Time ”
shall
      mean 12:01 a.m. Los Angeles time on the day after the **** Closing
      Date.




“ Environmental
      Laws ”
shall
      have the meaning specified in Section 6.7(b) .




“ Environmental
      Orders ”
shall
      have the meaning specified in Section
      6.7(b) .




“ Escrow ”
shall
      mean the escrow to be opened with the Escrow Agent and established for the
      sale
      to Buyer of all of the Purchased Assets in accordance with the terms of this
      Agreement.




“ Escrow
      Agreement ”
shall
      have the meaning given such term in Section 4.3 .




“ Escrow
      Holdback ”
shall
      mean the $425,000 portion of the Purchase Price to be held in Escrow in
      accordance with the terms of this Agreement.




“ Excluded
      Assets ”
shall
      mean:




(a)  all
      of
      Seller’s Cash, Cash Equivalents and marketable securities;




(b)  all
      Seller Contracts which are not Assumed Contracts;




(c)  all
      of
      Seller’s rights to refunds of all or any part of any Taxes paid by Seller prior
      to, at or after the Effective Time;




(d)  all
      of
      Seller’s tax and information returns; all correspondence between Seller and its
      shareholders; all corporate documents relating to the formation, capitalization
      and borrowings of Seller or pertaining to its relations with its shareholders;
      and all other financial records of Seller which do not relate exclusively to
      Seller’s ownership and operation of the Purchased Assets or the Business;
      provided, however, that upon reasonable notice from Buyer to Seller or its
      successors-in-interest, Seller or its successors-in-interest shall provide
      Buyer
      with access at no charge to any of the foregoing described material and with
      copies of any of said documents; and




(e)  all
      of
      Seller’s right to receive mail and other communications which do not relate to
      the ownership of the Purchased Assets or the operation of the
      Business.




“ Excluded
      Liabilities ”
shall
      mean all liabilities and obligations of Seller which are not Assumed
      Liabilities, including, without limitation, all such liabilities and obligations
      referred to in Section 3.2 and all
      other liabilities and obligations of Seller which pertain exclusively to the
      Excluded Assets, all as determined in a manner consistent with the manner in
      which the same are determined on Seller Balance Sheet.




“ GAAP ”
shall
      mean United States generally accepted accounting principles set forth in the
      opinions and pronouncements of the Accounting Principles Board of the American
      Institute of Certified Public Accountants and statements and pronouncements
      of
      the Financial Accounting Standards Board or in such other statements by such
      other entity as may be approved by a significant segment of the accounting
      profession, as in effect on the date of this Agreement.




4


“ GST ”
means
      all goods and services tax payable under the *Excise
      Tax Act* (Canada)
      or under any provincial legislation similar to such Act and any reference to
      a
      specific provision of such Act or any such provincial legislation shall refer
      to
      any successor provision thereto of like or similar effect.




“ Hazardous
      Substances ”
shall
      have the meaning specified in Section 6.7(b) .




“ Heptagon ”
shall
      have the meaning specified in the Preamble.




“ Indemnified
      Party ”
shall
      have the meaning specified in Section
      13.4 .




“ Indemnifying
      Party ”
shall
      have the meaning specified in Section
      13.4 .




“ Indemnity
      Cap Amount ”
shall
      mean (i) the sum of the Purchase Price and the Assumed Liabilities with
      respect to Section 13.1 (f) ,
      the
      representations and warranties set forth in Sections 6.1 , 6.4 , 6.9 (b) , 6.1(A)(b) and 6.1(A)(e) ,
      and any
      other representations and warranties of Seller as to title to any of the
      Purchased Assets or as to any Liens or Permitted Liens relating thereto, and
      (ii) $1,500,000 with respect to all other representations and warranties of
      Seller or the Shareholders.




“ Indemnity
      Percentage ”
shall,
      for each of CVF and Heptagon, be the percentage set forth opposite such
      Shareholder’s name on Annex I.




“ Intellectual
      Property ”
of
      a
      Person shall mean all intangible properties owned by that Person or in which
      that Person has any interest (including the right to use by license or
      otherwise), and includes, without limitation, (i) all registered and
      unregistered trademarks, service marks, trade names, trade dress, logos,
      corporate names, slogans and commercial symbols, all applications therefor,
      and
      all associated goodwill; (ii) all domain names and URL’s (including, in the case
      of Seller, the domain name “gemprint.com”), and all websites and the “look and
      feel” of all such websites (including, without limitation, each such website’s
      particular typefaces, color schemes, themes and the like); (iii) all
      statutory, common law and registered copyrights, all applications therefor
      and
      all associated goodwill; (iv) all patents and patent applications, all
      associated technical information, shop rights, know-how, trade secrets,
      processes, operating, maintenance and other manuals, drawings and
      specifications, process flow diagrams and related data, and all associated
      goodwill; (v) all software developed for Seller pursuant to an agreement
      between Seller and the software designer designating the software a “work made
      for hire,” all software developed by an employee of Seller, and all
      documentation thereof, (including all electronic data processing systems and
      program specifications, functional specifications, source and object codes,
      algorithms, architecture, input data, report layouts and format, record file
      layouts, diagrams, narrative descriptions and flow charts) (collectively, the
      “owned software,”) and all “off the shelf” software purchased in retail
      transactions (collectively


5




the
      “licensed software”) (the “owned software” and the “licensed software”
collectively referred to herein as the “Software”); (vi) all other mask
      works, moral rights, inventions, discoveries, improvements, processes, formulae
      (secret or otherwise), data, drawings, specifications, trade secrets,
      confidential information, financial, marketing and business data, the database
      of scans generated from the operation of the Business and all other databases,
      pricing and cost models and information, business and marketing plans, operating
      procedures, customer and supplier lists, knowledge of customer preferences
      and
      buying practices and all other ideas (including those in the possession of
      third
      parties, but which are the property of that Person); (vii) all drawings,
      records, books or other tangible media embodying the foregoing; (viii) all
      rights to obtain and rights to register patents, trademarks and copyrights;
      and
      (ix) all rights to sue or recover and retain damages and costs and attorneys
      fees for present and past infringement of any of the foregoing.




“ Inventories ”
of
      a
      Person shall mean all inventories, including, without limitation, inventories
      of
      raw materials, work-in-progress, storehouse stocks, materials, supplies,
      Gemprint certificates of registration, finished goods and consigned goods,
      owned
      by that Person or in which that Person has any interest (including the right
      to
      use), whether located on the premises of that Person, in transit to or from
      such
      premises, in storage facilities or otherwise.




“ Knowledge ”
shall
      mean, with respect to Seller, the actual knowledge of each of its directors,
      Jeff Dreben, Robert Nally, John Shepherd, Ian Barnett and Brad Boyko, and its
      executive officers, Jeff Dreben (Chairman), Brad Boyko (President), and David
      Lewis (Chief Financial Officer and Secretary), and the knowledge that each
      such
      Person would have acquired upon diligent inquiry and the knowledge that is
      imputed to each such Person and/or Seller by operation of Applicable Law.




“ Labor
      Agreements ”
of
      a
      Person shall mean, collectively, (i) all employment agreements, collective
      bargaining agreements or other labor agreements to which that Person is a party
      or by which any of its properties is bound; (ii) all pension, profit
      sharing, deferred compensation, bonus, stock option, stock purchase, savings,
      retainer, consulting, retirement, welfare or incentive plans or to which that
      Person is a party or by which any of its properties is bound; and (iii) all
      plans or agreements under which “fringe benefits” (including, but not limited
      to, hospitalization plans or programs, medical insurance, vacation plans or
      programs, sick plans or programs and related benefits) are afforded to any
      employees of that Person.




“ Licenses ”
of
      a
      Person shall mean all licenses and permits issued to that Person or in which
      that Person has any interest (including the right to use).




“ Lien ”
shall
      mean any lien, pledge, mortgage, security interest, lease, charge, conditional
      sales contract, option, restriction, reversionary interest, right of first
      refusal, voting trust arrangement, preemptive right, claim under bailment or
      storage contract, easement or any other adverse claim or right
      whatsoever.




“ Losses ”
shall
      mean all damages, awards, judgments, assessments, fines, sanctions, penalties,
      charges, costs, expenses, payments, Taxes, diminutions in value and other
      losses, however suffered or characterized, all interest thereon, all costs
      and
      expenses of investigating any claim, lawsuit or arbitration and any appeal
      therefrom, all actual attorneys’ fees incurred in connection therewith, whether
      or not such claim, lawsuit or arbitration is ultimately defeated and, subject
      to Section 13.5 ,
      all
      amounts paid incident to any compromise or settlement of any such claim, lawsuit
      or arbitration.




“ NWT ”
shall
      mean the jurisdiction referred to as the North West Territories.


6




“ NWT
      Receivable ”
shall
      mean the receivable identified in Schedule
      6.5(d) as the
“NWT Receivable” in an amount which is outstanding as of Closing.




“ Order ”
shall
      mean any decree, order, judgment, writ, award, injunction, rule or consent
      of or
      by an Authority.




“ Paid
      Registration ”
shall
      mean a computerized identification scan of a diamond or other gemstone that
      satisfies all of the following conditions: (a) the scan is made after the
      Closing Date, (b) the scan is done by a Person using the product presently
      known as the “Gemprint ISi Registration System,” or such other product as may be
      marketed or developed by Buyer which utilizes all or part of the Intellectual
      Property described in Schedule 6.9(b) or any
      derivative thereof, and (c)(i) the Person making the scan has paid a
      registration or license fee to Buyer and/or any of its Affiliates with respect
      to such scan or (ii) if a fee was not paid, the Person making the scan has
      caused the scan to be stored in a registration system to be maintained by Buyer,
      any of its Affiliates or any other Person from whom Buyer receives a direct
      or
      indirect economic benefit.




“ Permitted
      Liens ”
shall
      mean (i) Liens for Taxes or governmental assessments, charges or claims the
      payment of which is not yet due or payable and that are not yet delinquent,
      or
      Liens for Taxes the validity of which are being contested in good faith by
      appropriate proceedings; (ii) statutory Liens of landlords and Liens of
      laboratories, carriers, warehousemen, mechanics, materialmen and other similar
      Persons and other Liens imposed by Applicable Law incurred in the ordinary
      course of business for sums not yet due or payable and that are not yet
      delinquent or being contested in good faith; (iii) Liens relating to deposits
      made in the ordinary course of business in connection with workers’
compensation, unemployment insurance and other types of social security or
      to
      secure the performance of leases, trade contracts or other similar agreements;
      and (iv) Liens securing executory obligations under any lease that constitutes
      an “operating lease” under GAAP.




“ Person ”
shall
      mean any entity, corporation, company, association, joint venture, joint stock
      company, partnership, trust, organization, individual (including personal
      representatives, executors and heirs of a deceased individual), nation, state,
      government (including agencies, departments, bureaus, boards, divisions and
      instrumentalities thereof), trustee, receiver or liquidator, as well as any
      syndicate or group that would be deemed to be a Person under
      Section 13(d)(3) of the Securities Exchange Act of 1934.




“ Prepaid
      Items ”
of
      a
      Person shall mean all prepaid items (such as insurance deposits, municipal
      or
      local tax payments or deposits, utility deposits and the like), deferred
      charges, reserve accounts and other security and similar deposits owned by
      that
      Person or in which that Person has any interest.




“ Proceeding ”
shall
      have the meaning specified in Section
      6.6(b) .




“ Publication
      Names and Marks ”
shall
      have the meaning specified in Section 12.2 .




7


“ Purchased
      Assets ”
shall
      mean all of the Business, goodwill, assets, properties and rights (other than
      the Excluded Assets) of every nature, kind and description, whether tangible
      or
      intangible, real, personal or mixed, wherever located and whether or not carried
      or reflected on the Books and Records of Seller, which are owned by Seller
      or in
      which Seller has any interest (including the right to use), including, but
      not
      limited to the following:




(a)  all
      Intellectual Property of Seller;




(b)  all
      Tangible Personal Property of Seller;




(c)  all
      Inventories of Seller;




(d)  all
      of
      Seller’s Real Property;




(e)  all
      Prepaid Items of Seller, including, without limitation, those Prepaid Items
      described in Schedule 1.1 (b) ;




(f)  all
      transferable Licenses of Seller;




(g)  the
      Assumed Contracts;




(h)  all
      Accounts Receivable of Seller;




(i)  all
      Books
      and Records of Seller;




(j)  all
      rights of Seller under express or implied warranties from the suppliers of
      Seller with respect to the Purchased Assets, to the extent
      assignable;




(k)  all
      of
      Seller’s claims, causes of action, chooses in action, rights of recovery and
      rights of set-off of any kind other than those relating to the Excluded Assets
      or Excluded Liabilities;




(l)  all
      of
      Seller’s right to receive mail and other communications with respect to the
      Business and the Purchased Assets, including, without limitation, all telephone
      and facsimile numbers and electronic mail addresses of Seller;




(m)  all
      certifications and approvals from all certifying agencies issued to Seller
      and
      all of Seller’s rights to all data and records held by certifying
      agencies;




(n)  any
      and
      all of the Seller’s equity interests in Crystal Beam Melody, Inc.;




(o)  all
      goodwill of the Business as a going concern; and




(p)  all
      other
      properties, tangible and intangible, not otherwise referred to above which
      are
      owned by Seller or in which it has any interest.




“ Purchase
      Price ”
shall
      have the meaning specified in Section 4.1 .




“ Real
      Property ”
of
      a
      Person shall mean, collectively, all real properties owned by that Person or
      in
      which that Person has any interest or estate (including the right to use or
      lease), together with all buildings, fixtures, trade fixtures, plant, and all
      other equipment and improvements located thereon or attached thereto, all of
      that Person’s rights arising out of ownership or use or lease thereof (including
      oil and mineral rights), and all subleases, franchises, licenses, permits,
      easements and rights-of-way which are appurtenant thereto.




8


“ Required
      Contractual Consents ”
shall
      mean those consents listed in Schedule
      6.3(b) .




“ Required
      Governmental Approvals ”
shall
      mean those filings, notices or approvals listed in Schedule
      6.3(a) .




“ Seller ”
shall
      mean Gemprint Corporation, a corporation incorporated pursuant to the laws
      of
      Canada.




“ Seller
      Balance Sheet ”
shall
      mean the balance sheet contained in Seller Financial Statements.




“ Seller
      Balance Sheet Date ”
shall
      mean September 30, 2005.




“ Seller
      Contract ”
shall
      mean any Contract to which Seller is a party.




“ Seller
      Documents ”
shall
      mean this Agreement and all other agreements, instruments and certificates
      to be
      executed by Seller in connection with this Agreement.




“ Seller
      Financial Statements ”
shall
      mean the unaudited balance sheet and statement of income of Seller as of and
      for
      the nine-month period ended September 30, 2005, including all notes
      thereto.




“ Seller
      Material Adverse Effect ”
or
      other similar phrase including the word “material” with respect to Seller shall
      mean any condition, circumstance, change in or effect on the condition
      (financial or otherwise), intellectual property rights or other assets,
      liabilities, business, operations or prospects of Seller or the Business that,
      individually or in the aggregate with any other condition, circumstance, change
      in or effect thereon, results in or is reasonably likely to result in (i) an
      adverse effect individually or in the aggregate, of at least $150,000, (ii)
      a
      material adverse effect upon the validity, binding effect or enforceability
      of
      this Agreement or any other Seller Document or (iii) a material adverse effect
      upon the ability of Seller to perform its obligations under this Agreement
      or
      any other Seller Document.




“ Seller
      Material Contracts ”
shall
      mean, collectively, the Contracts of Seller which are required to be identified
      anywhere in the Schedules by the
      terms and provisions of this Agreement.




“ Shareholders ”
shall
      have the meaning specified in the Recitals.




“ Shareholder
      Documents ”
shall
      mean this Agreement and all other agreements, documents, instruments and
      certificates to be executed and delivered by the Shareholders, or any of them,
      in connection with this Agreement.




“ Shepherd
      Group ”
shall
      have the meaning specified in the Preamble.




“ Software ”
shall
      have the meaning specified in the definition of Intellectual
      Property.




9


“ Subsidiary ”
of
      a
      Person shall mean each corporation, limited liability company, partnership,
      joint venture, trust or other entity in which that Person has, directly or
      indirectly, (a) an equity interest representing 10% or more of any class of
      the
      capital stock thereof or other equity interest therein or the management and
      policies of which that Person has the ability to direct, whether by contract,
      voting power or otherwise, or
      (b) at
      least 50% of the securities or other ownership interests having by their terms
      ordinary voting power to elect at least 50% of the board of directors or other
      Persons performing similar functions is directly or indirectly owned or
      controlled by such Person, by any one or more of its Subsidiaries, or by such
      Person and one or more of its Subsidiaries.




“ Tangible
      Personal Property ”
of
      a
      Person shall mean all machinery, equipment, vehicles, furniture, trade fixtures,
      computers, supplies, spare parts, tools, stores and other tangible personal
      property owned by that Person, leased by that Person or in which that Person
      has
      any other interest (including the right to use), other than the Inventories
      and
      the Books and Records of that Person.




“ Tax ”
shall
      mean any federal, state, provincial, local or foreign tax, charge, fee, levy,
      deficiency or other assessment of whatever kind or nature (including without
      limitation, any net income, gross income, gross receipts, sales, use, value
      added, GST, ad valorem, employer health, transfer, franchise, profits, workers’
compensation, license, withholding, payroll, employment, unemployment, excise,
      estimated, severance, stamp, occupation, real property (land transfer), personal
      property, intangible property, occupancy, recording, minimum, capital, Canada
      or
      Quebec pension plan, environmental and windfall profits tax, or as a result
      of
      any tax sharing or similar agreement, together with any interest, penalty,
      addition to tax or additional amount imposed by any Tax Authority. “ Taxing ”
and Taxable ”
shall
      have the correlative meanings.




“ Tax
      Authority ”
shall
      mean any Authority having jurisdiction over the reporting and payment of any
      Taxes.




“ Tax
      Benefit ”
shall
      mean the aggregate of (a) any increased deductions or losses allowable to the
      Indemnified Party for federal income tax purposes in the same year or in a
      subsequent taxable period or reduction in income or gains for federal income
      tax
      purposes in the same year or in a subsequent taxable period, multiplied by
      the
      aggregate tax-effected marginal tax rate for the Indemnified Party, and (b)
      the
      amount of any increase in any Tax credit allowable to the Indemnified Party
      in
      the same year or in a subsequent taxable period or reduction in any recapture
      of
      Tax credits allowable to the Indemnified Party in the same year or in a
      subsequent taxable period, in each case determined under the Applicable Laws
      in
      effect on the date of payment and discounted to present value from the due
      date
      of the Tax Return (without extension) for the period in which such items are
      allowable to the date of payment of the indemnification amount at the prime
      rate
      of interest in effect on the date of payment as quoted in The Wall Street
      Journal.




“ Tax
      Liability ”
shall
      have the meaning specified at Section
      6.6(b) .




“ Tax
      Return ”
shall
      mean any report, election, declaration, claim for refund, estimate, information
      statement or return (including any schedules and attachments thereto) and any
      amendments relating to or required to be filed in connection with any Taxes
      pursuant to the statutes, rules or regulations of any Tax
      Authority.




10


“ Third
      Party Claim ”
shall
      have the meaning specified in Section 13.5 (a) .




“ Tolkowsky ”
shall
      mean Gabi Tolkowsky & Sons B.V.B.A.




“ Transfer
      Taxes ”
shall
      mean all Taxes (other than Taxes measured on or by net income) incurred or
      imposed upon Buyer, Seller or any Subsidiary thereof by reason of the transfer
      of the Purchased Assets to Buyer pursuant to this Agreement, including, without
      limitation, sales and use taxes, real property transfer taxes, GST, retail
      sales
      tax, excise taxes, and stamp, documentary, filing, recording, permit, license,
      registration or authorization duties or fees (including penalties and interest
      in respect of any of the foregoing).




1.2  General . References in this Agreement to “ Articles ,”
      “ Sections ,”
      “ Exhibits ”
and
      “ Schedules ,”
shall
      be to the Articles, Sections, Exhibits and Schedules of this Agreement, unless
      otherwise specifically provided; where the context or construction requires,
      all
      words applied in the plural shall be deemed to have been used in the singular,
      and vice versa; the masculine shall include the feminine and neuter, and vice
      versa; and the present tense shall include the past and future tense, and vice
      versa; the words “herein”, “hereof” and “hereunder” and words of similar import,
      when used in this Agreement, shall refer to this Agreement as a whole and not
      to
      any particular provision of this Agreement; and except as otherwise specified
      in
      this Agreement, all references in this Agreement (a) to any Person shall be
      deemed to include such Person’s permitted heirs, personal representatives,
      successors and assigns, (b) to any agreement, any document or any other
      written instrument shall be a reference to such agreement, document or
      instrument together with all exhibits, schedules, attachments and appendices
      thereto, and in each case as amended, restated, supplemented or otherwise
      modified from time to time in accordance with the terms thereof prior to the
      Effective Time and (c) to any law, statute or regulation shall be
      deemed
      references to such law, statute or regulation as the same may be supplemented,
      amended, consolidated, superseded or modified from time to time prior to the
      Effective Time. All accounting terms used herein have the meanings ascribed
      to
      them under GAAP. References in this Agreement to “ Dollars ”
or
      “ $ ”
shall
      be to United States dollars.




ARTICLE
      II




SALE
      AND PURCHASE OF ASSETS




2.1  Assets
      to be Transferred . Subject
      to the terms and conditions set forth in this Agreement and in reliance upon
      the
      representations and warranties of Seller, the Shareholders and Buyer herein
      set
      forth, at the Closing, Seller shall sell, transfer, convey, assign and deliver
      to Buyer, by appropriate deeds, bills of sale, assignments and other instruments
      satisfactory to Buyer and its counsel, and Buyer shall purchase from Seller,
      all
      of Seller’s right, title and interest, as of the Effective Time, in and to the
      Purchased Assets.




2.2  Excluded
      Assets . The
      Excluded Assets shall be excluded from the Purchased Assets purchased
      hereunder.




2.3  Title
      to Purchased Assets . The
      Purchased Assets shall be conveyed free and clear of all Liens, excepting only
      the Assumed Liabilities and the Permitted Liens.


11




2.4  Consents
      to Assignment . Anything
      in this Agreement to the contrary notwithstanding, this Agreement shall not
      constitute an agreement to assign or transfer any contract, lease,
      authorization, license or permit, or any claim, right or benefit arising
      thereunder or resulting therefrom, if an attempted assignment or transfer
      thereof, without a Required Contractual Consent or Required Governmental
      Approval, would constitute a breach thereof or in any way adversely affect
      the
      rights of Buyer thereunder. If a Required Contractual Consent or Required
      Governmental Approval is not obtained (a “ Deferred
      Consent ”),
      or if
      an attempted assignment or transfer thereof would be ineffective or would affect
      the rights thereunder so that Buyer would not receive all such rights, then,
      in
      each such case at Closing, (a) the Contract or License to which such Deferred
      Consent relates (a “ Deferred
      Item ”)
      shall
      be withheld from sale pursuant to this Agreement, (b) from and after the
      Closing, Seller and Buyer will cooperate, in all reasonable respects, to obtain
      such Deferred Consent as soon as practicable after the Closing, (c) until such
      Deferred Consent is obtained, Seller and Buyer will cooperate, in all reasonable
      respects, to provide to Buyer the benefits under the Deferred Item to which
      such
      Deferred Consent relates (with Buyer entitled to all the gains and responsible
      for all the losses, taxes liabilities and/or obligations thereunder), and (d)
      upon obtaining such Deferred Consent after the Closing, Seller shall execute
      such transfer instrument for the Deferred Item in form satisfactory to Buyer
      and
      its counsel. In particular, in the event that any such Deferred Consent is
      not
      obtained prior to the Closing, then Buyer and Seller shall enter into such
      arrangements (including subleasing or subcontracting if permitted) to provide
      to
      the parties the economic and operational equivalent of obtaining such Deferred
      Consent and assigning or transferring such Contract or License, including
      enforcement for the benefit of Buyer of all claims or rights arising thereunder,
      and the performance by Buyer of the obligations thereunder on a prompt and
      punctual basis.  Notwithstanding
      the foregoing, if a Deferred Consent is not obtained within twelve (12) months
      after the Closing, Buyer may elect not to accept an assignment of such Deferred
      Item or to assume the obligations thereunder in which event such Deferred Item
      shall thereupon be an Excluded Asset and all obligations thereunder an Excluded
      Liability.




ARTICLE
      III




ASSUMPTION
      OF LIABILITIES




3.1  Assumed
      Liabilities .
      As
      further consideration for the purchase and sale of the Purchased Assets, Buyer
      shall, from and after the Effective Time, assume, perform, discharge and pay
      when due those obligations and liabilities (the “ Assumed
      Liabilities ”)
      of
      Seller relating to the Business which are specifically set forth in this Section 3.1 ,
      but
      only to the extent specifically set forth in this Section 3.1 and
      subject to any contrary provisions which may be contained in Section 3.2 :




(a)  all
      unpaid or unperformed obligations and liabilities of Seller under the Assumed
      Contracts (including, without limitation, under that certain Lease Agreement
      dated as of March 10, 2005 by and between Fana Burnhamthorpe Corp. and Seller,
      as amended) arising after the Effective Time, but not arising out of any breach
      or default thereof prior to the Effective Time; provided, however, that, with
      respect to a Deferred Item, no assumption shall occur until such time as the
      Deferred Consent relating thereto has been obtained and if such Deferred Consent
      is obtained, the assumption shall only be with respect to the unpaid or
      unperformed obligations and liabilities of Seller under the Deferred Item
      arising after the date the Deferred Consent is obtained. No person who is not
      a
      party to this Agreement shall have any equitable or other rights against Seller
      or Buyer by virtue of this Agreement;




12


(b)  the
      trade
      payables and accrued expenses of Seller set forth on Schedule
      6.5(e) which
      remain outstanding as of the Closing and are reflected on the Disbursement
      Schedule (other than the obligation owed to NWT in excess of the amount of
      the
      NWT Receivable), and such payables or expenses as may hereafter be incurred
      in
      the ordinary course of business conducted in accordance with this Agreement
      provided, that such additional payables or expenses are reflected on the
      Disbursement Schedule and the aggregate amount of all such trade payables and
      accrued expenses, excluding any payables owing to NWT, does not exceed
      $150,000;




(c)  to
      the
      extent immediately following the Closing, Buyer employs Brad Boyko or Nicolae
      Dinu, each of whom is presently an employee of Seller, and Buyer thereafter
      terminates either such employee, (i) Buyer shall be responsible for fifty
      percent (50%) of any severance obligations to such employee based on such
      employees’ salary and benefits immediately prior to the Closing if the
      termination occurs within six (6) months of Closing, and (ii) one hundred
      percent (100%) of any severance obligations to such employee if the termination
      occurs six (6) months after the Closing;




(d)  all
      unpaid or unperformed obligations and liabilities of Seller under the Licenses
      assigned to Buyer hereunder arising after the Effective Time, but not arising
      out of any breach or default thereof prior to the Effective Time;




(e)  the
      performance of all warranty work, arising after the Effective Time but relating
      to products of Seller manufactured or sold by Seller or services provided by
      Seller prior to the Effective Time;




(f)  the
      amount payable to Scientific Instrumentation, Ltd. referred to in Section 8.18 ,
      but
      which shall not exceed $41,050 CDN less the trade payable of Seller owed to
      such
      party; and




(g)  to
      the
      extent not covered by insurance in effect for the benefit of Seller as of the
      Effective Time, all claims for real or personal injury or property damage which
      is caused by any defect in any product manufactured by Seller but sold by Buyer
      after the Effective Time.




3.2  Excluded
      Liabilities . Except
      for the Assumed Liabilities, Buyer shall not assume or be liable for any
      liabilities or obligations of Seller, direct or indirect, fixed, contingent
      or
      otherwise, known or unknown, which exist at the Effective Time or which arise
      thereafter as a result of any act, omission or circumstance taking place prior
      to the Effective Time, and whether or not the same are reflected on Seller
      Balance Sheet. Furthermore, notwithstanding anything to the contrary stated
      in Section 3.1 ,
      Buyer
      shall not assume or be liable for any of the following liabilities or
      obligations:




13


(a)  any
      of
      Seller’s liabilities or obligations under any Seller Contract which is not an
      Assumed Contract, or under any Assumed Contract to the extent such liabilities
      or obligations arise prior to the Effective Time;




(b)  any
      indebtedness and any
      trade or other current liability of Seller which is not within the liabilities
      described in Section 3.1(b) ;




(c)  any
      and
      all liabilities to NWT in excess of the amount of the NWT Receivable;
      and




(d)  any
      Tax
      imposed on Seller;




(e)  except
      as
      expressly set forth in Section 3.1(c) ,
      any of
      Seller’s liabilities or obligations relating to the employment of its employees
      or relating to any Seller benefit plan, including but not limited to unpaid
      or
      unperformed wages, salaries, payroll taxes, sick pay, vacation pay, fringe
      benefits and other employee benefits




(f)  except
      as
      expressly set forth in Section 3.1(c) ,
      any of
      Seller’s liabilities or obligations for any severance, “parachute” or other
      similar payment to any officer, director or employee of Seller arising by virtue
      of the transactions contemplated herein;




(g)  any
      of
      Seller’s liabilities or obligations under any Applicable Law or
      Order;




(h)  any
      of
      Seller’s liabilities or obligations arising from the litigations or other
      matters described in Schedule
      6.8 ;




(i)  any
      of
      Seller’s liabilities or obligations for Taxes, expenses or fees incident to or
      arising out of the negotiation, preparation, approval or authorization of this
      Agreement or the consummation (or preparation of the consummation) of the
      transactions contemplated hereby, including, without limitation, all attorney’s
      and accountant’s fees;




(j)  any
      of
      Seller’s liabilities or obligations arising outside of the ordinary course of
      the Business or otherwise arising by reason of any breach of contract, tort
      or
      infringement of the rights of another;




(k)  any
      of
      Seller’s liabilities or obligations which would not have existed had each of
      Seller’s representations and warranties been true as of the date hereof and as
      of the Effective Time and had Seller complied with each of its covenants
      contained in this Agreement;




(l)  any
      of
      Seller’s liabilities or obligations of any nature to any past or present
      shareholder of Seller or holder of any indebtedness of Seller; and




(m)  Without
      limiting Section  3.2 (a) or (g) ,
      any
      obligation or liability of Seller to the National Research Council of Canada
      or
      any other Person with respect to any Industrial Research Assistance Program,
      any
      Contract entered into in connection therewith or any condition or Applicable
      Law
      relating thereto.




14


3.3  Contested
      Obligations . Nothing
      contained herein shall require Buyer to pay or discharge any debts or
      obligations expressly assumed hereby so long as Buyer shall in good faith
      contest or cause to be contested the amount or validity thereof.




ARTICLE
      IV




PURCHASE
      PRICE, ESCROW, PAYMENT AND RELATED MATTERS




4.1  Purchase
      Price . The
      total purchase price (the “ Purchase
      Price ”)
      for
      the Purchased Assets shall consist of a base purchase price of $7,500,000
      and, if applicable, contingent payments as specified in Section
      4.2 .




4.2  Contingent
      Payments . For
      a
      period of five (5) years from the Closing Date, Buyer shall pay to Seller a
      contingent payment of $1.00 for each Paid Registration in excess of 100,000
      Paid
      Registrations during each twelve (12) month period (or such lesser period
      described below) ending June 30 th (the
“ Contingent
      Payments ”);
      provided, however, that (a) for the period commencing on the Closing Date
      and ending on June 30, 2006, the number of Paid Registrations which must be
      exceeded before a Contingent Payment is payable shall be prorated based on
      the
      number of days in such period, (b) for the period commencing on July 1,
      2010 and ending on the fifth
      anniversary of the Closing Date, the number of Paid Registrations which must
      be
      exceeded before a Contingent Payment is payable shall be prorated based on
      the
      number of days in such period, and (c) no Contingent Payments shall be payable
      with respect to Paid Registrations arising after the fifth anniversary of the
      Closing Date (other than for Paid Registrations relating to scans made prior
      to
      such date and for which payment is received by Buyer with ninety (90) days
      of
      such date). Contingent Payments, if any, for any period shall be paid by Buyer
      within ninety (90) days of the end of such period or if the threshold for making
      a Contingent Payment has been satisfied during such twelve (12) month period,
      within forty-five (45) days after the end of each quarter during such period,
      commencing with the quarter in which such threshold is satisfied. Buyer shall
      furnish to Seller, within ninety (90) days of the end of each twelve (12) month
      period (or such lesser period) as described above, or such earlier date upon
      which a Contingent Payment is made, a written Paid Registration and Contingent
      Payments report setting forth information relating to the determination of
      the
      amount of the Contingent Payments for the period. The report shall be certified
      by the Director of Finance or Chief Financial Officer of the Buyer. During
      the
      five (5) year period in which Contingent Payments apply and for a period of
      two
      (2) years thereafter, Buyer shall keep accurate and complete records in
      sufficient detail to enable the Contingent Payments payable under this Agreement
      to be determined.




During
      such five (5) years and for a period of two (2) years thereafter, Seller may,
      upon reasonable notice and subject to the execution of a confidentiality
      agreement in form satisfactory to Buyer, appoint, at its expense, a member
      or
      other employee of a national accounting firm to audit Buyer’s books and records,
      not more than one time during any twelve (12) month period, relative to Paid
      Registrations and Contingent Payments reasonably necessary to determine the
      Contingent Payments payable under this Agreement. If as a result of such audit.
      Seller disputes the amount of Contingent Payments made by Buyer for the
      applicable period, Seller shall, within thirty (30) days of the completion
      of
      such audit, notify Buyer in writing of each disputed item, specifying the amount
      thereof in dispute and setting forth, in reasonable detail, the basis for such
      dispute, and providing Buyer with a copy of the complete audit report prepared
      by such accounting firm. In the event of such a dispute, Buyer and Seller shall
      attempt to resolve in good faith any disputed items and reach a written
      agreement with respect thereto. If Buyer and Seller are unable to reach a
      resolution within thirty (30) days after receipt by Buyer of Seller’s written
      notice of dispute, Buyer and Seller shall submit the items remaining in dispute
      for final binding resolution to the New York office of an independent national
      accounting firm as may be mutually acceptable to Buyer and Seller (the
“ Arbitrating
      Accountants ”),
      the
      cost and expenses of which shall be shared equally by Buyer and Seller (or
      the
      Shareholders based on their respective Indemnity Percentages). If the disputed
      items are referred to the Arbitrating Accountants, the Contingent Payments
      under
      dispute shall be determined by the Arbitrating Accountants. Such determination
      shall be (i) in writing, (ii) furnished to Buyer and Seller as soon as
      practicable, but in no event later than sixty (60) days from the date of
      submission to the Arbitrating Accountants, (iii)made in accordance with this
      Agreement, and (iv) nonappealable by the Shareholders, Seller and Buyer or
      any of their respective Affiliates and successors and not to be subject to
      collateral attack for any reason other than manifest error or fraud. In the
      event that the parties agree, or the Arbitrating Accountants, determine, that
      a
      shortfall in the payment of Contingent Payments for any twelve (12) month period
      (or such lesser period described above)


15




of
      the
      Contingent Payment due for such period occurred, Buyer shall pay such shortfall
      within fourteen (14) days of demand to Seller. In addition, should the shortfall
      be greater than five percent (5%) of the Contingent Payment Buyer shall pay
      Seller the reasonable costs of the audit undertaken with respect to the
      determination of such shortfall.




4.3  Escrow . Immediately upon the execution hereof by the parties hereto, the parties shall
      deposit an original counterpart of this Agreement with the Escrow Agent. The
      parties hereto agree that this Agreement, together with the Escrow Agreement
      attached hereto as Exhibit
      A ,
      shall
      constitute the escrow instructions for the transfer of the Purchased Assets
      and
      the release of the Purchase Price and the Escrow Holdback (the “ Escrow
      Agreement ”).
      In
      the event of a conflict between the Escrow Agreement and the terms of this
      Agreement (exclusive of Exhibit
      A )
      then
      the terms of this Agreement (exclusive of Exhibit
      A )
      shall
      control.




4.4  Payment
      of the Purchase Price .  At
      the
      Closing, Buyer shall pay the sum of $7,500,000 (the “ Closing
      Payment ”)
      to the
      Escrow Agent by means of a wire transfer of immediately available funds into
      a
      bank account designated in writing by the Escrow Agent on or before the 2nd
      business day prior to the Closing.




4.5  Disbursement
      Schedule .
      At
      least three (3) Business Days prior to Closing, Seller shall deliver to Buyer
      for its review and approval a schedule certified by the President and Chief
      Financial Officer of Seller (the “ Disbursement
      Schedule ”)
      setting forth all of Seller’s outstanding payment obligations as of the date of
      the Disbursement Schedule (including without limitation all amounts payable,
      including the redemption amount and accrued and unpaid dividends plus interest,
      if any, required to be paid to holders of Seller’s “Class B Stock” under the
      Seller’s articles of incorporation and amendment for the redemption of such
      stock and/or with respect to other claims of such holders) together with an
      estimate of all additional payment obligations that may accrue through the
      Closing, in each case with the name and address of the payee to whom such
      obligation is owed. Seller shall make such changes to the Disbursement Schedule
      as Buyer may reasonably require. Without limiting the foregoing, if the
      aggregate amount of such obligations (but excluding those trade payables of
      Seller set forth on Schedule
      6.5(e) which
      are deemed Assumed Liabilities) exceeds $7,000,000, CVF and Heptagon shall,
      on a
      pro rata basis, convert into equity of Seller such portion of Seller’s
      obligations to each of them as may be necessary until the aggregate obligations
      set forth on the Disbursement Schedule approved by Buyer do not exceed
      $7,000,000.




16


4.6  Transfer
      Taxes .
      All
      Transfer Taxes arising out of the sale of the Purchased Assets hereunder, as
      well as all charges for or in connection with the recording of any document
      or
      instrument herein provided, shall be paid by Buyer. Buyer shall also duly and
      timely file all Tax Returns in connection with such Transfer Taxes.




4.7  Allocation
      of Purchase Price . It is
      understood that the total consideration to be received by Seller for the
      transfer of the Purchased Assets to Buyer shall be the Purchase Price, plus
      Buyer’s assumption of the Assumed Liabilities, subject to increase by the
      Contingent Payments, if any. As
      soon
      as is reasonably practicable, but in no extent later than 30 calendar days
      after
      the Closing, Seller and Buyer shall agree upon the allocation of such total consideration
      among the Purchased Assets and Assumed Liabilities with the specific allocation
      amounts subject to the results of a fair market valuation obtained by Buyer;
      provided, however, that such allocation shall reflect no more than $1,000,000
      of
      tangible assets. Buyer and Seller agree to file the requisite tax forms with
      their respective federal income tax returns (or as otherwise required by
      Applicable Law) reflecting the allocation of the Purchase Price. Each party
      hereto further agrees that it shall not file any return (or treat any item
      or
      items thereon) nor make any other statement or submission to the Internal
      Revenue Service, Canada Revenue Agency or any comparable state or provincial
      agency, or any court or other judicial or administrative body, which return,
      item, statement or submission is inconsistent in whole or in part with the
      agreed upon allocation.




4.8  [Intentionally
      omitted.]




4.9  [Intentionally
      omitted.]




4.10  GST
      Election .
      Buyer
      and Seller shall elect jointly pursuant to the provision of subsection 167.(1.1)
      of the *Excise
      Tax Act* (Canada) ** by
      completing and filing all prescribed forms and related documents in such manner
      and at such time as is prescribed, that for the purposes of such Act, no tax
      is
      payable under such Act in respect of the Purchased Assets and the Buyer shall
      be
      deemed to have acquired the Purchased Assets for use exclusively in commercial
      activities of the Buyer.




4.11  Accounts
      Receivable Election .
      Buyer
      and Seller shall, at the Closing, jointly execute elections under subsection
      22(1) of the *Income
      Tax Act* (Canada)
      in the form prescribed for such purpose in respect of the accounts receivable
      sold by Seller to Buyer pursuant to the Agreement. Such election shall designate
      the portions of the Purchase Price allocated in accordance with Schedule
      4.7 to such
      accounts receivable as the consideration paid by Buyer to Seller for the
      accounts receivable under this Agreement.




4.12  Deferred
      Revenue Election .
      Buyer
      and Seller shall, at the Closing, execute a joint election to have the provision
      of subsection 20(24) of the *Income
      Tax Act* (Canada)
      apply and shall agree to make such election on a timely basis in accordance
      with
      the provisions of subsection 20(25) of such Act. Seller and Buyer agree that
      Seller shall transfer a portion of the Purchased Assets to Buyer as
      consideration for the assumption by Buyer of Seller’s obligations pursuant to
      subsection 12(1)(a) of such Act.




17
 
 ARTICLE
        V
  CLOSING




5.1  Time
      and Place .
      Subject
      to the provisions of Section
      14.1 as to
      termination without default, the Closing shall take place at the offices of
      Loeb
& Loeb LLP, 10100 Santa Monica Blvd., Suite 2200, Los Angeles, California
      90067, at 10:00 a.m. local time on the date which is two (2) Business Days
      after
      all conditions precedent to each party’s obligations hereunder have been
      satisfied or waived or at such other time and place as Buyer and Seller mutually
      agree in writing, provided, however, that (i) if the Buyer has not obtained
      its registration
      under subdivision (d) of Division I of Part IX of the *Excise
      Tax Act* (Canada)
      with respect to GST by such date, Buyer may postpone the Closing for up to
      45
      days until a date which is two (2) Business Days after such registration is
      obtained, and (ii) without the prior written consent of Buyer, the Closing
      shall
      not occur after December 31, 2005. The parties shall use their best efforts
      to provide originally signed counterpart documents (and where appropriate
      facsimile or PDF copies of originally signed counterpart documents) to Loeb
      & Loeb, LLP and McCarter Grespan Robson Beynon Thompson LLP in advance of
      the Closing to be held in trust pending authorization by such legal counsel
      to
      release and deliver such documents, so that the Closing may occur without the
      need for the parties to be present at such offices on the Closing Date. The
      Closing shall be effective (and the possession and control of the Purchased
      Assets and the responsibility for the Assumed Liabilities shall vest in Buyer)
      as of the Effective Time, and all transactions and deliveries at the Closing
      shall be deemed to have occurred simultaneously.




5.2  Transactions
      Upon the Execution of this Agreement .
      Upon
      the execution and delivery of this Agreement, each of the Shareholders shall
      execute and deliver to Buyer the Lock-Up Agreement in the form of Exhibit
      C .




5.3  Transactions
      at the Closing . At the
      Closing, the following shall occur:




(a)  Buyer
      shall pay the Closing Payment to the Escrow Agent;




(b)  The
      Escrow Agent shall disburse the Closing Payment to or for the benefit of Seller
      in accordance with the Disbursement Schedule; provided, however that (a) any
      amounts payable to Seller’s employees shall be remitted to Seller for
      disbursement, (b) any expenses or other amounts payable by Seller hereunder
      shall be retained by the Escrow Agent for appropriate payment disbursement
      in
      accordance with this Agreement or the Escrow Agreement, (c) the Escrow
      Holdback shall be retained by the Escrow Agent to be held and disbursed in
      accordance with the Escrow Agreement, and (d) the balance, if any, shall be
      paid
      by the Escrow Agent to Seller in accordance with written instructions provided
      by Seller.




(c)  Buyer
      shall deliver to Seller the certificates referred to in Sections 11.1 and 11.2 ;




(d)  Buyer
      shall deliver to Seller executed copies of the Tax elections described in ARTICLE
      IV ;




18


(e)  Buyer
      shall provide to Seller a certificate of good standing with respect to its
      jurisdiction of formation;




(f)  Seller
      shall deliver to Buyer an assignment of Contracts, Licenses, assignments in
      registrable form of all trademarks, service marks, patents, copyrights, domain
      names, general intellectual property and registrations or applications for
      the
      same included within the Purchased Assets and a bill of sale and assignment
      covering the balance of the Purchased Assets, in form satisfactory to Buyer
      and
      its counsel, together with such other instruments of sale, transfer, conveyance,
      assignment and confirmation, and Seller shall take such
      further actions, as Buyer may reasonably deem necessary or desirable in order
      to
      transfer, convey and assign to Buyer, and to confirm Buyer’s title to, all of
      the Purchased Assets, to put Buyer in actual possession and operating control
      thereof and to assist Buyer in exercising all rights with respect
      thereto ;




(g)  Seller
      shall deliver to Buyer a copy of all of the Books and Records of
      Seller;




(h)  Seller
      and the Shareholders shall deliver to Buyer the certificates referred to in Sections 10.1 , 10.2 and 10.3 ;




(i)  Seller
      shall deliver to Buyer the opinion of counsel referred to in Section 10.4 ;




(j)  Seller
      shall provide to Buyer a certificate of compliance with respect to its
      jurisdiction of formation and certificate of status for each other jurisdiction
      in which Seller does business;




(k)  Seller
      shall deliver to Buyer certified copies of personal property security reports
      for each jurisdiction in which Seller does business, obtained by Seller at
      its
      sole expense, with currency dates of not earlier than five (5) days prior to
      the
      Closing Date, showing that as of the currency date of said report, there are
      no
      financing statements on file in the personal property registration systems
      of
      such jurisdictions with respect to any of the Purchased Assets except for
      Permitted Liens or Liens for which pay-off letters in form satisfactory to
      Buyer
      have been delivered in the manner described in Section 10.6 ;




(l)  Seller
      shall deliver to Buyer a certificate issued by the Ministry of Finance of
      Ontario pursuant to section 6 of the *Retail
      sales Tax Act* (Ontario),
      which indicates that the Seller has paid all taxes collectible or payable under
      the said Act up to the Closing Date or has entered into an arrangement
      satisfactory to the said Minster for the payment of such taxes;




(m)  Seller
      shall deliver to Buyer all other properties, documents and certificates required
      to be delivered to Buyer hereunder, to the extent not theretofore delivered;
      and




(n)  Seller
      shall deliver to Buyer executed copies of the Tax elections described in ARTICLE
      IV ;




19


(o)  Seller,
      CVF, Heptagon and Shepherd Group shall execute and deliver the Non-Competition
      Agreement referred to in Section
      10.7 ;




(p)  Seller
      shall deliver a certified copy of its articles of incorporation, by-laws and
      the
      resolutions of its board of directors and minutes of the meeting of its
      shareholders approving the transactions contemplated herein, together with
      duly
      executed incumbency certificates; and




(q)  Escrow
      Agent shall either cause lien releases to be filed with respect to each Lien
      that is to be paid out of the Closing Payment or shall appoint Cassels Brock
      & Blackwell LLP, Buyer’s Canadian counsel, as agent to make such filings on
      its behalf.




ARTICLE
      VI




REPRESENTATIONS
      AND WARRANTIES




OF
      SELLER ,
      CVF
      AND HEPTAGON




Seller
      and each of CVF and Heptagon hereby jointly and severally, subject to Section 13.8 ,
      represents and warrants to Buyer that:




6.1  Organization;
      Authority; Due Authorization .




(a)  Organization
      and Good Standing . Seller
      is a corporation duly organized, validly existing and in good standing under
      the
      Applicable Laws of its jurisdiction of incorporation; has all requisite power
      to
      own, lease and operate its assets, properties and business and to carry on
      its
      business as conducted during the twelve-month period prior to the date hereof,
      as now conducted and as proposed to be conducted; and is duly qualified or
      licensed to do business as a foreign corporation and is in good standing in
      every jurisdiction in which the nature of its business or the location of its
      properties requires such qualification or licensing, except for such
      jurisdictions where the failure to so qualify or be licensed would not have
      any
      adverse effect on the enforceability of any of Seller Material Contracts or
      Seller’s ability to bring or defend lawsuits, or a Seller Material Adverse
      Effect. Schedule
      6.1 sets
      forth all jurisdictions in which Seller is qualified or licensed to do business
      as a foreign corporation and all fictitious business names used by Seller within
      the last five (5) years. Seller changed its corporate name from Omphalos
      Recovery Systems, Inc. to Gemprint Corporation in accordance with Applicable
      Law. CVF, Heptagon and Shepard Group are the record and beneficial owners of
      64.9%, 4.45% and 11.6%, respectively, of the issued and outstanding stock of
      Seller.




(b)  Authority
      to Execute and Perform Agreements . Except
      for obtaining the approval of Seller’s shareholders at a duly noticed meeting
      (which meeting and approval shall occur prior to Closing), Seller has all
      requisite power, authority and approvals required to enter into, execute and
      deliver this Agreement and all of the other Seller Documents and (assuming
      the
      Required Contractual Consents, the Required Governmental Approvals and such
      approval of Seller’s shareholders are obtained) to perform fully its obligations
      hereunder and thereunder.




(c)  Due
      Authorization; Enforceability . Except
      for obtaining the approval of Seller’s shareholders at a duly noticed meeting
      (which meeting and approval shall occur prior to Closing), Seller has taken
      all
      corporate actions necessary to authorize it to enter into and perform fully
      its
      obligations under this Agreement and all of the other Seller Documents to be
      executed by it and to consummate the transactions contemplated herein and
      therein. Seller has delivered to Buyer a true and correct certified copy of
      the
      resolutions adopted by its board of directors with respect to the foregoing.
      This Agreement has been duly and validly executed by Seller and (assuming due
      authorization, execution and delivery by Buyer and obtaining the approval of Seller’s
      shareholders as described herein) constitutes the legal, valid and binding
      obligation of Seller, enforceable in accordance with its terms, except as the
      same may be limited by applicable bankruptcy, insolvency, reorganization,
      moratorium or similar Applicable Laws affecting creditors’ rights generally or
      by general equitable principles affecting the enforcement of
      contracts.




20


(d)  Approval
      of Shareholders .
      Approval to the transactions contemplated by this Agreement by Seller’s
      shareholders under Applicable Law and Seller’s articles of incorporation and
      by-laws shall occur upon obtaining the approval of holders of at least 2/3
      of
      the **** issued
      and outstanding stock of Seller at a duly noticed meeting. All classes of stock
      shall be aggregated for purposes of determining whether such approval is
      obtained and the approval of shareholders of each class of Seller’s stock is not
      required to approve such transactions.




(e)  Class
      B Stock .
      As of
      the date hereof, CIC Industrial Interests Inc. is the registered owner of all
      of
      the issued and outstanding "Class B Stock" of Seller, such shares having been
      transferred to CIC Industrial Interests Inc. by Saskatoon Community Bond
      Corporation pursuant to a Share Sale Agreement dated December 4, 1998. On or
      about October 31, 1997, Saskatoon Community Bond Corporation delivered a
      redemption notice to Seller with respect to 860,927 of the shares of “Class B
      Stock”, requiring Seller to redeem such issued and outstanding "Class B Stock"
      and triggering the provisions for redeeming such shares under Seller's articles
      of incorporation and amendment. While Seller is unable to locate a second
      redemption notice from Saskatoon Community Bond Corporation triggering the
      redemption provisions for the remainder of the issued and outstanding shares
      of
“Class B Stock”, the Share Sale Agreement dated December 4, 1998 between
      Saskatoon Community Bond Corporation and CIC Industrial Interests Inc. confirms
      that Saskatoon Community Bond Corporation triggered the redemption provisions
      under Seller’s articles of incorporation for all of its issued and outstanding
      shares of “Class B Stock” prior to the date of such agreement. As of the date
      hereof, the "Class B Stock" has not been redeemed by Seller. Further, Saskatoon
      Community Bond Corporation has not provided Seller with notice revoking its
      redemption notices for any “Class B Stock” as of the date hereof.




6.2  No
      Violation .
      Except
      as disclosed in Schedule
      6.2 ,
      and
      assuming that the Required Governmental Approvals and the Required Contractual
      Consents are obtained and that the approval of the shareholders of the Seller
      are obtained at a duly noticed meeting, neither the execution or delivery by
      Seller of this Agreement or any of Seller Documents nor the consummation of
      the
      transactions contemplated herein or therein will: (a) violate any provision
      of the Articles of Incorporation, bylaws or other charter documents of such
      party; (b) violate, conflict with or constitute a default under, permit the
      termination or acceleration of, or cause the loss of any rights or options
      under, any Seller Material Contract; (c) require any authorization, consent
      or approval of, exemption or other action by, or notice to, any party to any
      Seller Material Contract; (d) result in the creation or imposition of any
      Lien upon any of the Purchased Assets which is not a Permitted Lien or
      (e) violate or require any consent or notice under any Applicable Law or
      Order to which Seller or any of its properties is subject (including, without
      limitation, the Bulk Sales Act (Ontario).




21


6.3  Licenses;
      Regulatory and Other Approvals .  Schedule
      6.3(a) sets
      forth a complete and accurate description of all Licenses of Seller, denoting
      which of same are transferable to Buyer pursuant to Applicable Law and which
      are
      not transferable to Buyer. All of such Licenses are in effect and in good
      standing. Schedules
      6.3 (b) sets
      forth a complete and accurate description of each consent, approval,
      authorization, notice, filing, exemption or other requirement which must,
      pursuant to any Applicable Law or Order or the terms of any Seller Material
      Contract, be obtained from any Authority or Person or which must otherwise
      be
      satisfied by Seller or any Shareholder in order that (a) the execution or
      delivery by Seller or any Shareholder of this Agreement or any of the other
      Seller Documents, and (b) the consummation of the transactions contemplated
      herein or therein, will not (i) violate in any material respect any Applicable
      Law, any applicable Order to which such party is subject or any License of
      Seller; (ii) constitute a material default under, or give rise to a right of
      termination or acceleration of, or to a loss of any material benefits by Buyer
      under, any assigned Seller Material Contract; or (iii) result in the creation
      or
      imposition of any Lien upon any of the Purchased Assets which is not a Permitted
      Lien.





6.4  Title
      to Purchased Assets .
      Without
      limiting the specific representations and warranties as to specific classes
      of
      Purchased Assets contained elsewhere herein, Seller is the absolute beneficial
      owner of the Purchased Assets and has good and marketable title to each of
      the
      Purchased Assets owned by it and the valid and enforceable right to receive
      and/or use each of the Purchased Assets in which Seller has any other interest,
      free and clear of all Liens, other than (a) Permitted Liens or (b) the
      Liens listed in Schedule 6.4 which
      shall be paid in full at Closing out of the Closing Payment. Without limiting
      the generality of the foregoing, there has been no assignment, subletting or
      grants of any Lien by Seller in respect of any of the Purchased Assets except
      as
      expressly disclosed herein. The delivery to Buyer of the instruments of transfer
      of beneficial and legal ownership contemplated by this Agreement will at the
      Effective Time vest good and marketable title to, or the valid and enforceable
      right to receive and/or use, each such Purchased Asset in Buyer, free and clear
      of all Liens, other than Permitted Liens. No
      person other than Buyer has any agreement or option or right to purchase the
      Purchased Assets from Seller.




6.5  Financial
      Condition .




(a)  Financial
      Statements . Schedule
      6.5(a) sets
      forth (i) the balance sheets of Seller as of December 31, 2002, 2003
      and 2004 and the related statements of income and retained earnings and changes
      of financial position for the fiscal years then ended, which were examined
      by
      independent certified public accountants as part of the annual audit of the
      consolidated financial statements of CVF, and issued an unqualified opinion
      (except for a going concern issue) with respect thereto, and (ii) the
      unaudited Seller internally prepared balance sheets and statements of income
      of
      Seller for the nine-month period ended September 30, 2005. Said financial
      statements (i) were prepared in accordance with the Books and Records of
      Seller; (ii) were prepared in accordance with GAAP except that: (A) a
      cumulative non-cash adjustment to reflect a valuation for the convertibility
      features of Seller’s debt obligations to CVF has not been made, (B) an
      evaluation of the foreign currency translation effects has not been performed
      and (C) the footnotes to the balance sheets and the related statements of income
      do not contain all
      of
      the information required by GAAP; (iii) fairly present Seller’s financial
      condition and the results of its operations as of the relevant dates thereof
      and
      for the periods covered thereby; (iv) contain and reflect all necessary
      adjustments and accruals for a fair presentation of Seller’s financial condition
      and the results of its operations for the periods covered by said financial
      statements (except that the unaudited balance sheet as of September 30, 2005
      and
      the related statements of income are subject to year-end audit adjustments,
      the
      net effect of which could not reasonably be expected to have a Seller Material
      Adverse Effect); (v) contain and reflect adequate provisions for all reasonably
      anticipated liabilities for all Taxes, with respect to the period then ended
      and
      all prior periods; and (vi) with respect to contracts and commitments for
      the sale of goods or the provision of services by Seller, contain and reflect
      adequate reserves for all reasonably anticipated material losses and costs
      and
      expenses in excess of expected receipts.




22


(b)  No
      Undisclosed Liabilities .
      Except
      for (i) those liabilities specifically accrued or reserved against on
      Seller Balance Sheet, (ii) those current liabilities for trade or business
      obligations incurred since Seller Balance Sheet Date in connection with the
      purchase of goods or services in the ordinary course of the Business and
      consistent with past practices, (none of which is, individually or in the
      aggregate, material and none of which is for breach of contract, breach of
      warranty, tort or infringement), (iii) those liabilities arising under any
      Seller Material Contract (none of which liabilities is for breach of contract,
      breach of warranty, tort or infringement) or (iv) those liabilities
      otherwise specifically disclosed in Schedule
      6.5(b) (none of
      which liabilities is for breach of contract, breach of warranty, tort or
      infringement), Seller has, as of the date hereof, no direct or indirect
      indebtedness, liability, claim, loss, damage, deficiency, obligation or
      responsibility, known or unknown, fixed or unfixed, choate or inchoate,
      liquidated or unliquidated, secured or unsecured, accrued, absolute, contingent
      or otherwise, and whether or not of a kind required by generally accepted
      accounting principles to be set forth on a financial statement, which
      individually or in the aggregate are material to the condition (financial or
      otherwise), assets, liabilities, business, operations, properties or prospects
      of Seller. Seller has no Knowledge of any circumstances, conditions, events
      or
      arrangements which may hereafter give rise to any liabilities of Seller except
      in the ordinary course of the Business or as otherwise set forth in Schedule 6.5(b) .




(c)  Inventories .
      All
      Inventories shown on Seller Balance Sheet (which are described in Schedule 6.5(c)) and all
      Inventories existing as of the date hereof consisted of, and consist of, items
      of a quality and quantity useable and saleable in the ordinary course of
      business by Seller without markdown or discount, were, and are, merchantable
      and
      fit for their particular purpose, except for obsolete and slow-moving items
      and
      items below standard quality (which in any event did not, and do not, exceed
      normal commercial standards in amount), all of which had been, and have been,
      written down on the books of Seller to the lower of cost or net realizable
      market value or had been, and have been, provided for by adequate reserves.
      Except as set forth in Schedule
      6.5(c) ,
      all
      such Inventories were, and are, owned by Seller and will be free and clear
      of
      any Liens, other than Permitted Liens, as of the Closing. No items included
      in
      such Inventories were, or are, held by Seller on consignment from others. The
      amounts of all such Inventories shown on Seller Balance Sheet were based on
      quantities determined by physical count or measurement taken on Seller Balance
      Sheet Date and valued at the lower of cost (determined
      on a first-in, first-out basis) or market value and on a basis consistent with
      that of prior years. As of
      the Effective Time, the Inventories will be at such levels and include such
      items as are adequate and sufficient to enable Buyer to conduct the Business
      in
      the ordinary course for a period of at least ten (10) weeks after the Effective
      Time, in a manner consistent with Seller’s prior practices.




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(d)  Accounts
      Receivable . Schedule
      6.5(d) sets
      forth a complete and accurate schedule of the Accounts Receivable of Seller
      as
      of Seller Balance Sheet Date, as reflected in Seller Balance Sheet, together
      with an accurate aging of the same. All Accounts Receivable of Seller accrued
      on
      Seller Balance Sheet and all Accounts Receivable of Seller existing as of the
      date hereof resulted from valid sales in the ordinary course of the Business
      and
      were, and are, subject to no valid offsets or counterclaims. Except as set
      forth
      in Schedule
      6.5(d) ,
      all
      such Accounts Receivable were, and are, owned by Seller and will be free and
      clear of any Liens, other than Permitted Liens, as of the Closing. All
      allowances for doubtful accounts and warranty returns reflected on Seller
      Balance Sheet have been established in accordance with GAAP .
      Within
      six (6) months of the Closing Date, the obligors of the NWT Receivable shall
      have paid the entire amount of the NWT Receivable to Buyer.




(e)  Accounts
      Payable . Schedule
      6.5(e) sets
      forth a true and correct aged list of all trade payables, accrued expenses
      and
      indebtedness of Seller as of Seller Balance Sheet Date and as of the date
      hereof. The payment to be made by the Escrow Agent at Closing in accordance
      with
      the Disbursement Schedule and the assumption by Buyer of the Assumed Liabilities
      shall operate to provide compliance under Applicable Law relating to bulk
      transfers and all amounts (including without limitation, all accrued dividends)
      required to be paid by Seller to holders of its “Class B Stock.”




(f)  Absence
      of Certain Changes .
      Except
      as indicated in Schedule
      6.5(f) ,
      since
      Seller Balance Sheet Date, Seller has conducted the Business only in the
      ordinary course consistent with its past practices and has not:




(i)  suffered
      any change, event or condition which, in any case or in the aggregate, has
      had
      or could reasonably be expected to have a Seller Material Adverse
      Effect;




(ii)  suffered
      any destruction, damage to or loss of any asset (whether or not covered by
      insurance) which has had or could reasonably be expected to have a Seller
      Material Adverse Effect;




(iii)  incurred
      any obligation or liability or taken property subject to any liability, whether
      absolute, accrued, contingent or otherwise and whether due or to become due,
      except current liabilities for trade or business obligations incurred since
      Seller Balance Sheet Date in connection with the purchase of goods or services
      in the ordinary course of the Business and consistent with its prior practices,
      none of which liabilities, in any event, involved a potential liability of
      Seller in excess of $25,000, individually, or $150,000, in the
      aggregate;




(iv)  mortgaged,
      pledged or subjected to any Lien any of its property, business or assets,
      tangible or intangible;




(v)  sold,
      transferred, leased to others or otherwise disposed of any of its assets,
      tangible or intangible, except for inventory sold in the ordinary course of
      the
      Business consistent with its past practices or immaterial amounts of other
      tangible personal property not required by the Business;




24


(vi)  amended
      or terminated any Seller Material Contract or any License of Seller or received
      any notice of termination of any Seller Material Contract, committed a material
      default under any such Seller Material Contract or License, or suffered a
      material default by any other party thereto;




(vii)  declared
      or made any payment of dividends or other distribution to its shareholders
      or
      upon or in respect of any shares of its capital stock, or purchased, retired
      or
      redeemed, or obligated itself to purchase, retire or redeem, any of its shares
      of capital stock or other securities;




(viii)  changed
      its accounting methods or practices (including, without limitation, any change
      in depreciation or amortization policies or rates) or revalued any of its
      assets;




(ix)  entered
      into any transaction, contract or commitment other than in the ordinary course
      of the Business and consistent with its prior practices;




(x)  suffered
      any loss of one or more material customers or any material amounts of business,
      in the aggregate or received notice of any such impending loss; or




(xi)  entered
      into any agreement or made any commitment to take any of the types of actions
      described in subparagraphs (i) through (x) above.




(g)  Books
      of Account .
      The
      books of account of Seller are stated in reasonable detail and accurately and
      fairly reflect in all material respects the transactions and dispositions of
      the
      assets of Seller as required by GAAP (other than as noted in Section 6.5(a)) .
      Seller
      has devised and maintains a system of internal accounting controls sufficient
      to
      provide reasonable assurances that (i) transactions are executed in accordance
      with management’s general or specific authorization; (ii) transactions are
      recorded as necessary (A) to permit the preparation of financial statements
      in
      conformity with GAAP (other than as noted in Section 6.5(a)) and (B)
      to maintain accountability for assets; and (iii) the amount recorded for assets
      on the books and records of Seller is compared with the existing assets at
      reasonable intervals and appropriate action is taken with respect to any
      differences.




6.6  Tax
      Matters . Except
      as indicated in Schedule
      6.6 :




(a)  Tax
      Returns .
      Seller
      has (i) duly and timely filed all Tax Returns required to be filed by it on
      or prior to the date hereof, which Tax Returns are true, correct and complete,
      and (ii) duly and timely paid all Taxes due and payable in respect of all
      periods up to and including the date hereof and properly accrued on Seller
      Financial Statements all Taxes not yet payable in respect of all periods up
      to
      and including the date hereof. Seller has heretofore provided
      Buyer with (i) a true and accurate schedule which sets forth each Taxing
      jurisdiction in which Seller has filed or is required to file, or be included
      in, Tax Returns and indicating whether Seller has filed unitary or separate
      income or franchise Tax Returns with respect to each such jurisdiction, (ii)
      a
      true and complete copy of each Tax Return of Seller for the last five complete
      fiscal years and such other Tax Returns as have been requested by Buyer, (iii)
      a
      schedule of all material elections with respect to Taxes affecting Seller or
      for
      which Seller is or may be liable that are in effect as of the Closing Date,
      and
      (iv) a schedule of any and all deferred intercompany transactions and excess
      loss accounts, including, in each case, a description and the amounts thereof.
      Seller has timely and properly withheld or collected, paid over and reported
      all
      Taxes required to be withheld or collected by Seller on or before the date
      hereof.




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(b)  Asserted
      Tax Liabilities .
      (i) No Tax Authority has asserted any adjustment that could result in an
      additional Tax for which Seller is or may be liable or that could result in
      a
      Lien on any of its assets (collectively, “ Tax
      Liability ”);
      (ii)
      there is no pending audit, examination, investigation, dispute, proceeding
      or
      claim (collectively, “ Proceeding ”)
      relating to any Tax Liability and, to the Knowledge of Seller, no Tax Authority
      is contemplating such a Proceeding and there is no basis for any such
      Proceeding, (iii) no statute of limitations with respect to any Tax has been
      waived or extended (unless the period to which it has been waived or extended
      has expired); (iv) there is no outstanding power of attorney authorizing
      anyone to act on behalf of Seller in connection with any Tax Liability, Tax
      Return or Proceeding relating to any Tax; (v) there is no outstanding closing
      agreement, ruling request, request to consent to change a method of accounting,
      subpoena or request for information with or by any Tax Authority with respect
      to
      Seller, its income, assets or business, or any Tax Liability; (vi) Seller
      is not required to file Tax Returns or pay Taxes under any Applicable Law of
      the
      United States of America or any of its States or local government;
      (vii) Seller has not deferred any income to a period after the Closing Date
      that has economically accrued on or prior to the Closing Date or accelerated
      any
      deduction into a period on or before the Closing Date that economically accrues
      after the Closing Date; (viii) Seller is not and has never been a party to
      any Tax sharing or Tax allocation agreement, arrangement or understanding;
      (ix) Seller is not and has never been included in any consolidated,
      combined or unitary Tax Return with any Person other than Seller; (x) all
      Taxable periods for the assessment or collection of any Tax Liability are closed
      by agreement or by operation of the normal statute of limitations (without
      extension) or will close by operation of the normal statute of limitations
      for
      such Taxes (in each case determined without regard to any omission, fraud or
      other special circumstance other than the timely filing of the Tax Return)
      and
      (xi) no Tax Authority has ever asserted that Seller should **** file
      a
      Tax Return in any jurisdiction where it does not file.




(c)  Seller’s
      GST Registration .
      Seller
      is duly registered under subdivision (d) of Division I of Part IX of the *Excise
      Tax Act* (Canada) ** with
      respect to GST and its registration number is 103995262RT0001. The Purchased
      Assets constitute all or substantially all of the assets owned and primarily
      used by Seller in respect of the operations of the Business.




6.7  Compliance
      with Applicable Laws; Governmental Matters .




(a)  General .
      Seller
      has, in all material respects, complied with and is now, in all material
      respects, in compliance with all Applicable Laws and Orders, and no material
      capital expenditures will be required in order to insure continued compliance
      therewith. Except for the Licenses already held by Seller, no other franchise,
      license, permit, Order or approval of any Authority is material to or necessary
      for the conduct of the Business as previously conducted during the twelve-month
      period prior to the date hereof, as presently conducted or as proposed to be
      conducted. Each such License is in full force and effect; Seller is now and
      has
      at all times in the past been in full compliance with each thereof; no
      violations are or have been recorded by any Authority in respect of any thereof;
      and no proceeding is pending, or to the Knowledge of Seller, threatened, to
      revoke, amend or limit any thereof. Except as indicated in Schedule
      6.7(a) ,
      there
      are no pending or threatened proceedings by or before any Authority which
      involve new special assessments, assessment districts, bonds, Taxes,
      condemnation actions, Applicable Laws or Orders or similar matters which, if
      instituted, could be reasonably expected to have a Seller Material Adverse
      Effect.




26


(b)  Environmental
      and Industrial Hygiene Compliance .
      Except
      as set forth in Schedule
      6.7(b) , (i)
      there
      are no Hazardous Substances located on or in or under any of the Real Property
      of Seller; Seller has not used any of the Real Property of Seller or any other
      real property to produce, generate, manufacture, treat, store, handle,
      transport, or dispose of any Hazardous Substances except in compliance with
      Environmental Laws; (ii) Seller and the Shareholders do not have Knowledge
      of
      Seller or any of its predecessors having caused or permitted the Release of
      any
      Hazardous Substances on or off-site from any of the Real Property of Seller
      or
      any other place or places where Seller conducts or has conducted the Business
      or
      in the course of transportation by Seller from or to any real property; all
      Hazardous Substances disposed of, treated, or stored by Seller or, to the best
      of Seller’s and the Shareholders’ Knowledge, any predecessors of Seller, have
      been disposed of, treated and stored in compliance with all Environmental Laws;
      Seller has not transported any Hazardous Substances outside of Canada; and
      (iii) to the best Knowledge of Seller, there are no underground or
      above-ground storage tanks or associated piping or appurtenances (active or
      abandoned), or urea formaldehyde foam insulation, asbestos, polychlorinated
      biphenyls, or radioactive substances located on or in or under the surface
      of
      any of the Real Property of Seller or other assets used thereon.




For
      purposes of this Section, the defined terms being as follows:




“ Applicable
      Authority ”
means
      any: (i) multinational, national, federal, provincial, state, regional,
      municipal, local, or other government, governmental or public department,
      central bank, court, tribunal, arbitral body, commission, board, bureau, or
      agency, whether domestic or foreign; (ii) any subdivision, agent, commission,
      board, or authority of any of the foregoing; or (iii) any quasi-governmental,
      private, or self-regulatory body, organization, or agency.




“ Environmental
      Laws ”
means
      all federal, provincial, municipal, or local laws, statutes, regulations,
      ordinances, rules, guidelines, orders, directives, and other requirements of
      any
      Applicable Authority or of any court, tribunal, or other similar body, relating
      to environmental or health matters, including legislation governing the
      labeling, use, and storage of Hazardous Substances.




“ Environmental
      Orders ”
means
      applicable orders, decisions, or the like rendered by any Authority under or
      pursuant to any Environmental Laws.




“ Hazardous
      Substances ”
means
      petroleum and petroleum products, polychlorinated biphenyls, asbestos, urea
      formaldehyde foam insulation, any flammable and/or radioactive materials, or
      any
      other substance or material that is prohibited, controlled, or regulated under
      any Environmental Laws.




27


“ Release ”
means
      a
      releasing, spilling, leaking, pumping, pouring, emitting, emptying, discharging,
      injecting, escaping, leeching, spraying, burying, abandoning, incinerating,
      disposing, or dumping of Hazardous Substances or Hazardous Waste, or threat
      thereof, which is in breach of any Environmental Law or Environmental
      Order.




(c)  Indemnity
      and Hold Harmless .
      Without
      limiting any other indemnity contained herein, Seller, CVF and Heptagon shall,
      subject to Section 13.8 ,
      from
      and after the Effective Time, jointly and severally indemnify and hold harmless
      Buyer, and its respective shareholders, directors, officers, employees, agents
      and attorneys, and any successors to Seller’s interest in any such affected
      property, and their respective shareholders, directors, officers, employees,
      agents and attorneys, from and against any and all Losses directly or indirectly
      arising out of the presence, use, generation, storage, or disposal of Hazardous
      Substances on any property of Seller, whether the same was the fault of Seller
      or any prior owner or operator of such affected property or any other Person,
      including, without limitation, all general, special, foreseeable or
      unforeseeable consequential damages and the cost of any required or necessary
      repair, cleanup, or detoxification and the preparation of any closure or other
      required plans, whether or not such action is required or necessary prior to
      or
      following transfer of title to any such affected property, and to the full
      extent that such action is attributable, directly or indirectly, to the presence
      or use, generation, storage, release, threatened release, or disposal of
      Hazardous Substances by any Person on any property of Seller prior to the
      Effective Time.




6.8  Litigation .  Schedule
      6.8 sets
      forth an accurate and complete description of every pending or, to the Knowledge
      of Seller, threatened adverse claim, dispute, governmental investigation, suit,
      action (including, without limitation, nonjudicial real or personal property
      foreclosure actions), arbitration, legal, administrative or other proceeding
      of
      any nature, domestic or foreign, criminal or civil, at law or in equity, by
      or
      against or otherwise affecting Seller, or its businesses, operations,
      properties, financial conditions or prospects and which could be reasonably
      expected to result individually (aggregating related actions) in Losses of
      $150,000 or more (in excess of Losses irrevocably accepted as covered under
      any
      insurance policy issued by a credit worthy insurance company). Schedule
      6.8 also
      sets forth an accurate and complete description of every pending, or to the
      Knowledge of Seller, threatened action, claim, dispute, governmental
      investigation, suit, arbitration or other proceeding which challenges or seeks
      to prevent, enjoin, alter or materially delay any of the transactions
      contemplated by this Agreement. Seller has delivered to Buyer copies of all
      relevant court papers and other documents relating to the matters referred
      to in Schedule
      6.8 .
      Except
      as disclosed in Schedule
      6.8 :




(a)  no
      such
      matter or matters, if decided adversely to Seller, could reasonably be expected
      to have a Seller Material Adverse Effect;




(b)  Seller
      is
      not in default with respect to any Order by which it is bound or to which its
      property is subject and there exists no Order enjoining or requiring Seller
      to
      take any action of any kind with respect to the Business;




(c)  neither
      Seller nor, to the Knowledge of Seller, any officer, director, manager or
      employee of Seller has been permanently or temporarily enjoined by any Order
      from engaging in or continuing any conduct or practice in connection with the
      Business; and




28


(d)  to
      the
      Knowledge of Seller, no basis exists for any claim, investigation, suit or
      proceeding which, if decided adversely to Seller, could reasonably be expected
      to have a Seller Material Adverse Effect.




6.9  Property
      of Seller .




(a)  Tangible
      Personal Property . Schedule
      6.9(a) sets
      forth (i) a description, including the location, of each item of Tangible
      Personal Property owned by Seller which is (A) licensed to, and in the
      possession of, a Person other than Seller, or (B) having on the date hereof
      either a depreciated book value or estimated fair market value per unit in
      excess of $25,000, or not owned by Seller but in the possession of or used
      in
      the Business and having rental payments therefor in excess of $2,000 per month
      or $25,000 per year; (ii) a description of the owner of, and any Seller
      Contract relating to the use of, each such item of Tangible Personal Property
      not owned by Seller and the circumstances under which such property is used
      and
      (iii) the Tangible Personal Property of Seller reflected in the Seller Balance
      Sheet. Except as indicated in Schedule
      6.9(a) :




(i)  Seller
      has good and marketable title to each item of its Tangible Personal Property,
      free and clear of all Liens other than Permitted Liens and the Liens listed
      in Schedule
      6. 4
      that
      will be paid in full at Closing out of the Closing Payment;




(ii)  no
      officer, director, shareholder or employee of Seller, nor any Affiliate thereof,
      owns directly or indirectly, in whole or in part, any item of the Tangible
      Personal Property of Seller or has any other interest therein; and




(iii)  each
      item
      of Tangible Personal Property owned or used by Seller or its licensees is in
      good operating condition and repair, usable in the ordinary course of the
      Business, and the operation thereof as conducted during the twelve-month period
      prior to the date
      hereof, as presently conducted and as proposed to be conducted is not in
      violation of any Applicable Law, including, without limitation, applicable
      Environmental Laws and Orders and laws relating to occupational health and
      safety.




(b)  Intellectual
      Property .  Schedule
      6.9(b) sets
      forth, as of the date hereof, (i) a true and complete description of
      Seller’s proprietary identification and registration system of gemstones;
      (ii) a true and complete schedule of each patent, patent application and
      associated invention, industrial model, process and design, technical
      information, know-how and operating maintenance or other manual and each
      registration and application for any of the foregoing, constituting a part
      of
      such Intellectual Property (including, without limitation, any registrations
      and/or applications filed with the Canadian Intellectual Property Office);
      (iii) registered and unregistered fictitious business name, trademark,
      service mark, trade name, domain name, URL, web site and slogan, and each
      registration and application for any of the foregoing, constituting a part
      of
      the Intellectual Property of Seller (including, without limitation, any
      registrations and/or applications filed with the Canadian Intellectual Property
      Office); (iv) a true and complete schedule of each statutory, common law
      and registered copyright, and each registration and application for any of
      the
      foregoing, constituting a part of such Intellectual Property (including, without
      limitation, any registrations and/or applications filed with the Canadian
      Intellectual Property Office); (v) each item of Software and associated
      documentation constituting a part of such Intellectual Property other than:
      (A)
“shrink wrap” software and (B) third party software generally available to the
      public at a cost of less than $2,500 **;** (vi) a
      true and complete list, without extensive or revealing descriptions, of each
      trade secret constituting a part of such Intellectual Property, including each
      related process or item of know-how or other technical data, and including,
      as
      to each such trade secret, the specific location of each writing, computer
      program or other tangible medium containing its complete description,
      specifications, source codes, charts, procedures, manuals and other descriptive
      material relating to it; (vii) a true and complete list of all Contracts to
      which Seller is a licensee relating to any item of such Intellectual Property;
      (viii) a true and complete list of all Contracts to which Seller is a licensor
      relating to any item of such Intellectual Property; and (ix) a true and complete
      list of all Contracts under which Seller is obligated to provide maintenance,
      support or update any of such Intellectual Property. The consummation of the
      transactions contemplated herein will not adversely affect in any manner the
      nature or usefulness of any item of such Intellectual Property in the hands
      of
      Seller. Except as indicated in Schedule
      6.9(b) :




29


(A)  Seller
      is
      the owner of all right, title and interest in and to each item of its
      Intellectual Property, free and clear of all Liens, other than Permitted Liens
      and Liens that will be paid in full, and released, at Closing out of the Closing
      Payment;




(B)  all
      patents, trademarks, service marks, copyrights and other state, provincial,
      federal and foreign registrations and all applications therefor listed in Schedule
      6.9(b) are
      valid and in full force and effect and are not subject to any Taxes, maintenance
      fees or actions falling due within 90 days after the date hereof;




(C)  all
      of
      the Software of Seller performs in full compliance with all of the
      specifications therefor (including, without limitation, functional
      specifications) set forth in user manuals, promotional materials or license
      agreements;




(D)  accurate
      and complete copies of all source codes relating to all versions of each item
      of
      Software of Seller exist and have been made available to Buyer;




(E)  all
      items
      of Software of Seller (other than licensed Software), including all prior
      versions thereof, were conceived, made and reduced to practice solely by Persons
      who were employees of Seller, and such Software resulted exclusively from work
      performed by those employees for Seller; any and all ideas, designs, concepts,
      techniques, inventions and discoveries which were conceived, made or reduced
      to
      practice by those employees relating in any way to such Software are “works made
      for hire” as a matter of law and are owned exclusively by Seller; and valid
      registrations exist and are in effect with respect to all of such
      Software;




(F)  the
      patents and Software owned by Seller do not infringe the rights of any Person,
      there are no pending claims, actions, judicial or other adversary proceedings,
      disputes or disagreements involving Seller concerning any item of its
      Intellectual Property, and, to the Knowledge of Seller, no such action,
      proceeding, dispute or disagreement is threatened and no basis exists for such
      action, proceeding, dispute or disagreement;




30


(G)  all
      current officers, employees and consultants of Seller (other than employees
      and
      consultants who have not been involved in developing any Intellectual Property
      of Seller and who have no managerial responsibilities) have executed and
      delivered to Seller agreements regarding the protection of proprietary
      information and the assignment to Seller of all Intellectual Property rights
      arising from the services performed for Seller by such Persons, and Seller
      has
      made available to Buyer or its counsel copies of all such agreements;




(H)  to
      the
      Knowledge of Seller, no employee or consultant of Seller is in violation of
      any
      term of any employment Contract, patent disclosure agreement, non-competition
      agreement or any other Contract or restrictive covenant relating to the right
      of
      such Person to be employed or engaged by Seller or to use the Intellectual
      Property rights of others; and




(I)  Neither
      the National Research Council of Canada, any other Authority nor any other
      Person has any right to, or claim against, Seller’s Intellectual Property as a
      result of any Industrial Research Assistance Program, any Contract entered
      into
      in connection therewith or any condition or Applicable Law relating
      thereto.




(c)  Real
      Property . Schedule
      6.9(c) sets
      forth: (i) a true and complete description of all Real Property in which
      Seller has any interest, and all buildings and other structures located on
      that
      Real Property; and the nature of the interest therein of Seller; and
      (ii) an identification of all Seller Contracts together with all amendments
      thereto, under which Seller has any interest or estate in any Real Property.




(d)  Necessary
      Properties .
      Except
      for the Real Property, the Purchased Assets include all of the assets, real
      properties, tangible personal properties and intangible properties necessary
      for
      the conduct of the Business as conducted during the twelve-month period prior
      to
      the date hereof, as presently conducted and as proposed to be conducted and
      include substantially all of those properties actually used in the conduct
      of
      such businesses during the twelve-month period prior to the date
      hereof.




6.10  Agreements .  Schedule
      6.10 sets
      forth a true and correct list of each Seller Contract except  any Seller
      Contract which is specifically identified in Schedules
      6.9(a) , 6.9(b),  6.9(c) , 6.11 , 6.12 or 6.13 .
      Seller
      has delivered to Buyer a true and correct copy of the Amendment to Founders
      Agreement between Seller and Tolkowsky, the Amendment to License Agreement
      between Seller and Crystal Beam Melody, Inc. and the Amendment to Escrow
      Agreement between Seller and Crystal Beam Melody, Inc., all entered into and
      effective as of November 22, 2005.




Except
      as
      indicated in Schedule
      6.10 :




(a)  each
      Seller Material Contract is the valid and binding obligation of the other
      contracting party, enforceable in accordance with its terms against the other
      contracting party and in full force and effect, except as the same may be
      limited by applicable bankruptcy, insolvency, reorganization, moratorium or
      similar Applicable Laws affecting creditors’ rights generally or by general
      equitable principles affecting the enforcement of contracts; there is no default
      or event which, with notice or lapse of time or both, would constitute a default
      by any other contracting party thereunder; no consent need be obtained from
      any
      Person in respect thereof in connection with the transactions contemplated
      hereby; and all rights of Seller thereunder are owned free and clear of any
      Liens, other than Permitted Liens and the Liens listed in Schedule
      6.4 ;




31


(b)  Seller
      has fulfilled all material obligations required pursuant to each Seller Material
      Contract to have been performed by it prior to the date hereof, and provided
      that CVF and Heptagon fulfill their obligations under Section
      8.3 to
      advance funds to Seller, Seller has no reason to believe that Seller will not
      be
      able to fulfill, when due, all of its obligations under each Seller Material
      Contract which remain to be performed after the date hereof;




(c)  no
      other
      contracting party to any Seller Material Contract has breached such Seller
      Material Contract in any material respect within the twelve-month period prior
      to the date hereof; Seller has no Knowledge of any anticipated material breach
      thereof by any such party; and there are not now, nor have there been in the
      twelve-month period prior to the date hereof, any disagreements or disputes
      between Seller and any other party to any Seller Material Contract relating
      to
      the validity or interpretation of such Seller Material Contract or to the
      performance by any party thereunder;




(d)  Seller
      is
      not a party to, nor is any of its property bound by, any Seller Contract, or
      any
      provision of its Articles of Incorporation or Bylaws, which (i) restricts
      the conduct of the Business anywhere in the world or its ability to sell
      products or services to a specific Person, (ii) grants most favored nation
      pricing and/or terms to any Person, (iii) requires or may potentially require
      the renegotiation of government Contracts or (iv) contains any unusual or
      burdensome provisions which could reasonably be expected to have a Seller
      Material Adverse Effect;




(e)  Seller
      is
      not under any material liability or obligation with respect to the return of
      inventory or products sold by Seller which are in the possession of
      distributors, wholesalers, retailers or customers, or with respect to credit
      for
      services rendered to third parties; and




(f)  the
      Assumed Contracts include all of the contracts and agreements necessary for
      the
      conduct of the Business as conducted during the twelve-month period prior to
      the
      date hereof, as presently conducted by Seller and as proposed to be conducted,
      and include substantially all of Seller.




6.11  Labor
      and Employment Matters .




(a)  Labor
      Agreements . Schedule
      6.11 sets
      forth a true and current list of all of the Labor Agreements to which Seller
      is
      a party. Schedule
      6.11 also
      includes a true and complete schedule listing the names, total annual
      compensation, total accrued vacation, overtime, sick leave and other fringe
      benefits and bonuses of each person employed by Seller presently receiving
      compensation.




32


Except
      as
      set forth in Schedule
      6.11 :




(i)  the
      employment of each employee of Seller may be terminated immediately by Seller,
      except as otherwise provided by statute or decisional authority;




(ii)  to
      the
      Knowledge of Seller, no key executive employee of Seller and no group of
      employees of Seller has plans to terminate his, her or its employment at or
      prior to the Closing, whether or not as a result of the transactions
      contemplated herein;




(iii)  Seller
      has no material labor relations problems and




(iv)  Seller
      is
      not a party to any collective bargaining agreements and, to the Knowledge of
      Seller, no labor group or group of employees has made a claim for recognition
      or
      certification.




(b)  Compliance
      With Labor Laws and Agreements .
      Seller
      has complied in all material respects with all Applicable Laws and Orders
      relating to the employment of labor, including those related to wages, hours,
      collective bargaining and the payment and withholding of Taxes and other sums
      as
      required by appropriate Authorities and has withheld and paid to the appropriate
      Authorities, or is holding for payment not yet due to such Authorities, all
      amounts required to be withheld from such employees of Seller and is not liable
      for any arrears of wages, Taxes, penalties or other sums for failure to comply
      with any of the foregoing.




6.12  Employee
      Benefits .




(a)       
      Compliance with Applicable Law, etc. Seller has deducted and remitted to
      the relevant governmental authority all income Taxes, unemployment insurance
      contributions, Canada Pension Plan contributions, Workplace Safety &
Insurance premiums, provincial health insurance premiums and any taxes or other
      amounts which it is required by statute to collect and remit to any governmental
      authority. All accruals for unpaid vacation pay, premiums for unemployment
      insurance, health premiums, Canadian Pension Plan premiums, accrued wages,
      salaries and commissions, employee benefit plan payments and overtime have
      been
      properly reflected in the books and records of Seller. No notice has been
      received by Seller of any complaints filed by any of the employees employed
      or
      formerly employed in the Business against Seller claiming that Seller has
      violated the Employment Standards Act (Ontario) or the Human Rights Code
      (Ontario) (or any applicable employee or human rights or similar legislation
      in
      the other jurisdictions in which the Business is conducted), which are currently
      outstanding or of any complaints or proceedings of any kind involving Seller
      in
      respect of the employees of Seller or, to Seller’s Knowledge, after due inquiry,
      any of the employees of Seller, before any labor relations board. There are
      no
      outstanding orders or charges against Seller under the Workplace Safety and
      Insurance Act (Ontario) (or any applicable health and safety legislation in
      at
      the other jurisdictions in which the Business is conducted).




(b)     
        Pension Plan. Except as set forth on Schedule 6.12(b),
      Seller has no retirement, pension, bonus, stock purchase, profit sharing, stock
      option, deferred compensation, severance or termination pay, insurance, medical,
      hospital, dental, vision care, drug, sick leave, disability, salary
      continuation, legal benefits, unemployment benefits, vacation, incentive or
      other compensation plan or arrangement or other employee benefit that is
      maintained or otherwise contributed to, or required to be contributed to, by
      Seller for the benefit of employees or former employees employed in the
      Business.




33


6.13  Insurance .  Schedule
      6.13 sets
      forth a true and correct list of all policies or binders of fire, liability,
      workers’ compensation, vehicular or other insurance held by or on behalf of
      Seller specifying the insurer, the policy number or covering note number with
      respect to binders, and describing each pending claim thereunder of more than
      $25,000. Such policies and binders are in full force and effect and are in
      all
      material respects in accordance with the customary insurance requirements for
      the industry of Seller and in compliance with all Applicable Laws and Orders.
      Seller is not in default, nor has ever been in default, with respect to any
      provision contained in any such policy or binder or has failed to give any
      notice or present any claim under any such policy or binder in due and timely
      fashion. Seller has complied with the terms of any co-insurance
      provisions contained in any such policy or policies of insurance. There are
      no
      outstanding unpaid claims under any such policy or binder. Seller has not
      received a notice of cancellation or non-renewal of any such policy or binder.
      Seller has no Knowledge of any inaccuracy in any application for such policies
      or binders, any failure to pay premiums when due, or any similar state of facts
      which may form the basis for termination of any such insurance. Seller has
      never
      been refused any insurance with respect to its properties or operations, nor
      has
      its insurance coverage ever been limited.




6.14  Customers,
      Licensees and Suppliers .  Schedule
      6.14 is a
      correct and current list of all customers, licensees, and suppliers of the
      Business who purchased more than $25,000 of products or services from Seller,
      generated more than 250 registrations to Seller or sold more than $25,000 of
      products or services to Seller during the last fiscal year, together with
      summaries of the sales made to each such customer, registrations generated
      by
      such licensees and purchases made from each such supplier during Seller’s last
      fiscal year. Except as indicated in Schedule
      6.14 ,
      no
      single customer of Seller, licensee or supplier is of material importance to
      Seller.




6.15  Potential
      Conflicts of Interest . Except
      as indicated in Section
      6.15 ,
      no
      officer or director of Seller or any Shareholder, no key employee of Seller
      or
      any Shareholder and no Affiliate of any of the foregoing (a) owns, directly
      or indirectly, any interest in (excepting not more than a one percent (1%)
      shareholding for investment purposes in securities of publicly held and traded
      companies), or is an officer, director, employee or consultant of, any Person
      which is a competitor, lessor, lessee, customer, licensee or supplier of Seller;
      (b) holds a beneficial interest in any Seller Contract (other than stock
      options and other contracts, commitments or agreements between Seller and such
      persons in their capacities as employees, officers or directors of Seller);
      (c) owns, directly or indirectly, in whole or in part, any tangible or
      intangible property (including, without limitation any patent, trademark, trade
      name, service mark, franchise, invention, permit, license, trade secret or
      confidential information) which Seller is using or the use of which is necessary
      for its conduct of the Business; or (d) has any cause of action or other
      claim whatsoever against Seller, except for claims in the ordinary course of
      the
      Business, such as for accrued vacation pay, accrued benefits under employee
      benefit plans and similar matters and agreements existing on the date
      hereof.




6.16  Certain
      Transactions . Schedule
      6.16 contains
      a detailed description (including all material terms thereof) of all purchases
      and sales or other transactions, if any, between Seller, on the one hand, and
      any officer, director, manager, shareholder, partner, member, key employee
      or
      Affiliate thereof, on the other hand, within the five years immediately
      preceding the date of this Agreement. Except as disclosed in Schedule
      6.16 ,
      all
      such purchases and sales or other transactions were made on the basis of
      prevailing market rates and terms such that from the perspective of Seller,
      all
      such transactions were made on terms no less favorable than those which would
      have been available from unrelated third parties.




34


6.17  Solvency . As
      of the
      Closing and immediately after consummating the transactions contemplated by
      this
      Agreement, Seller will not (i) be insolvent (either because its financial
      condition is such that the sum of its debts is greater than the fair value
      of
      its assets or because the present fair salable value of its assets will be
      less
      than the amount required to pay its probable
      liability on its debts as they become absolute and matured), (ii) have
      unreasonably small capital with which to engage in its business, or (iii) have
      incurred or plan to incur debts beyond its ability to repay such debts as they
      become due and payable and/or absolute and matured.




6.18  Books
      and Records . Seller
      has made all of its Books and Records available to Buyer for its inspection,
      each of which is accurate and complete in all material respects.




6.19  Delivery
      of Documents . Seller
      has delivered to Buyer true and current copies of all agreements and documents
      referred to in the Schedules .




6.20  Subsidiaries .
      Except
      for its equity interests in Crystal Beam Melody, Inc., Seller does not own
      directly or indirectly, any interest or investment (whether equity or debt)
      in
      any Person.




6.21  No
      Broker .
      No
      broker, finder, agent or similar intermediary has acted for or on behalf of
      Seller or the Shareholders in connection with this Agreement or the transactions
      contemplated hereby, and no broker, finder, agent, similar intermediary or
      other
      Person is entitled to any broker’s, finder’s, or similar fee, other commission
      or payment in connection therewith based on any agreement, arrangement or
      understanding with Seller or the Shareholders or any action taken by Seller
      or
      the Shareholders.




6.22  Non-Residency .
      Seller
      is not a non-resident of Canada within the meaning of the *Income
      Tax Act* (Canada).




6.23  Full
      Disclosure . All
      documents and other papers delivered to Buyer by or on behalf of Seller in
      connection with this Agreement and the transactions contemplated hereby are
      true, complete and authentic. The information furnished to Buyer by or on behalf
      of Seller in connection with this Agreement and the transactions contemplated
      herein does not contain any untrue statement of a material fact and does not
      omit to state any material fact necessary to make the statements made, in the
      context in which made, not false or misleading. There is no fact which Seller
      has not disclosed to Buyer in writing which could reasonably be expected to
      have
      a Seller Material Adverse Effect.




35


ARTICLE
      VI(A)




REPRESENTATIONS
      AND WARRANTIES OF THE SHAREHOLDERS




Subject
      to the exceptions and limitations set forth in this Agreement, each Shareholder
      hereby represents and warrants, to Buyer for itself and only with respect to
      itself as follows:




6.1(A)  Authority,
      Enforceability, No Violation, Consents, Title to Shares, Etc.




(a)  Organization
      and Good Standing .
      The
      Shareholder is a corporation, duly organized, validly existing and in good
      standing under the laws of its jurisdiction of incorporation and has all
      requisite power and authority to own and vote its stock in the capital of
      Seller.




(b)  Authority;
      Authorization of Transactions Contemplated by this Agreement .
      The
      Shareholder has approved and authorized Seller to execute this Agreement and
      all
      of the Seller Documents to be executed by Seller and to consummate the
      transactions herein and therein in accordance with the Agreement. The
      Shareholder has all requisite power and authority to execute and deliver this
      Agreement and the other Shareholder documents required to be delivered by such
      Shareholder to which such Shareholder is a party, to consummate the transactions
      contemplated hereby and thereby and to perform such Shareholder’s obligations
      under each Shareholder Document. The execution and delivery by the Shareholder
      of each of the Shareholder Documents to which the Shareholder is or will be
      a
      party and the performance by the Shareholder of such Shareholder’s obligations
      hereunder and thereunder have been duly and validly authorized by all necessary
      action. Each of the Shareholder Documents to which the Shareholder is or will
      be
      a party is, or upon its execution and delivery will be (assuming the valid
      authorization, execution and delivery of such Shareholder Document by the other
      parties thereto), a valid and binding obligation of such Shareholder,
      enforceable against such Shareholder in accordance with the terms thereof,
      except to the extent that such enforceability may be limited by any applicable
      bankruptcy, insolvency, reorganization, moratorium or other similar Applicable
      Laws relating to creditors’ rights generally and to general principles of
      equity. The Shareholder has delivered to Buyer the Shareholder’s duly executed
      Lock-Up Agreement adopting and approving this Agreement and the transactions
      contemplated hereby in accordance with the applicable requirements of Applicable
      Law, and such remains in full force and effect.




(c)  No
      Violation .
      Except
      as set forth on Schedule
      6.1(A)(c) ,
      neither
      the execution or delivery by the Shareholder of any of the Shareholder Documents
      to which the Shareholder is or will be a party, the consummation by such
      Shareholder of the transactions contemplated hereby and thereby, nor the
      performance by such Shareholder of its obligations hereunder and thereunder
      will
      (i) if the Shareholder is an entity, violate any provision of the articles
      of
      incorporation, bylaws, or other charter documents of such Shareholder or any
      resolution adopted by the equityholders of such Shareholder or the board of
      directors (or other responsible governing body) or any committee of thereof,
      or
      the Lock-Up Agreement (ii) violate, or give any Authority or other Person the
      right to challenge the transactions contemplated by this Agreement or any of
      the
      other or to exercise any remedy or obtain any relief under, Applicable
      Law.




36


(d)  Consents .
      Except
      as set forth on Schedule
      6.1(A)(d) ,
      no
      material filing with, and no material permit, authorization, consent or approval
      of, any Person is necessary for the Shareholder’s execution and delivery of this
      Agreement and the other Shareholder Documents, the consummation by the
      Shareholder of the transactions contemplated hereby or thereby or the
      Shareholder’s performance of the Shareholder’s obligations hereunder or
      thereunder.




(e)  Title
      to Shares .
      The
      Shareholder is the sole record and beneficial owner, free and clear of any
      and
      all Liens, of the shares of Seller’s capital stock set forth opposite such
      Shareholder’s name on Annex
      I ,
      and the
      shares of the Seller’s capital stock set forth therein constitute all of the
      shares of Seller’s capital stock beneficially owned or held of record by the Shareholder.
      There are no rights, obligations or other agreements or commitments (written
      or
      oral) obligating the Shareholder with respect to voting the shares of Seller’s
      capital stock owned by the Shareholder.




ARTICLE
      VII




REPRESENTATIONS
      AND WARRANTIES OF BUYER




Buyer
      represents and warrants to Seller and the Shareholders as follows:




7.1  Due
      Incorporation . Buyer is
      a corporation duly organized, validly existing and in good standing under the
      Applicable Laws of its jurisdiction of incorporation.




7.2  Authority
      to Execute and Perform Agreements . Buyer
      has all requisite power, authority and approval required to enter into, execute
      and deliver this Agreement and the other Buyer Documents and (assuming the
      Required Contractual Consents and the Required Governmental Approvals are
      obtained) to perform fully Buyer’s obligations hereunder and
      thereunder.




7.3  Due
      Authorization; Enforceability .
      Buyer
      has taken all corporate **** actions
      necessary to authorize it to enter into and perform its obligations under this
      Agreement and all other Buyer Documents and to consummate the transactions
      contemplated herein and therein. Buyer has delivered to Seller a true and
      correct certified copy of the resolutions adopted by its board of directors
      with
      respect to the foregoing. This Agreement has been duly and validly executed
      by
      Buyer and (assuming the due authorization, execution and delivery by Seller)
      constitutes the legal, valid and binding obligations of Buyer, enforceable
      in
      accordance with its terms, except as the same may be limited by applicable
      bankruptcy, insolvency, reorganization, moratorium or similar Applicable Laws
      affecting creditors’ rights generally or by general equitable principles
      affecting the enforcement of contracts.




7.4  No
      Violation .
      Neither
      the execution and delivery of this Agreement and all other Buyer Documents
      nor
      the consummation of the transactions contemplated hereby and thereby will
      (a) violate any provision of the Certificate of Incorporation or bylaws of
      Buyer; (b) violate, conflict with, or constitute a default under any
      contract or other lease agreement or other instrument to which Buyer is a party
      or by which it or its property is bound; (c) require the consent of any
      party to any material contract or other agreement to which Buyer is a party
      by
      which it or its property is bound; or (d) violate any Applicable Laws or
      Orders to which Buyer or its property is subject.




37


7.5  Regulatory
      and Other Approvals . Except
      for such approvals as have already been obtained, no other consent, approval,
      authorization, notice, filing, exemption or other requirement must, pursuant
      to
      any Applicable Law or Order or the terms of any material Contract to which
      Buyer
      is a party or to which its properties are subject, be obtained from any
      Authority or Person or must otherwise be satisfied by Buyer in order that (i)
      the execution or delivery by Buyer of this Agreement and any of Buyer Documents
      or (ii) the consummation of the transactions contemplated herein or therein
      will
      not violate any Applicable Law or Order or the terms of any such material
      Contract of Buyer.




7.6  No
      Broker . Other
      than Lazard Freres & Co. LLC, no broker, finder, agent or similar
      intermediary has acted for or on behalf of Buyer in connection with this
      Agreement or the transactions contemplated hereby, and no broker, finder, agent
      or similar intermediary is entitled to, or will be paid, any broker’s, finder’s,
      or similar fee or other commission in connection therewith based on any
      agreement, arrangement or understanding with Buyer or any action taken by Buyer.
      Buyer shall fully discharge all obligations to Lazard Freres & Co. LLC, in
      connection with this Agreement and the transactions contemplated
      hereby.




7.7  Investment
      Canada Act .
      Buyer
      is a non-Canadian within the meaning of the *Investment
      Canada* Act
      (Canada).




ARTICLE
      VIII




COVENANTS
      AND AGREEMENTS OF THE PARTIES




EFFECTIVE
      PRIOR TO CLOSING




The
      parties hereto covenant and agree as follows:




8.1  Business
      Examinations and Physical Investigations of Purchased Assets .
      Prior
      to the Effective Time Buyer shall be entitled, through its employees and
      representatives, including, without limitation, Loeb & Loeb LLP, Grant
      Thornton LLP and Buyer’s lenders, prospective lenders, investment bankers and
      consultants, to make such investigations and examinations of the Business,
      the
      Purchased Assets, the Books and Records of Seller and the affairs and financial
      condition of Seller as Buyer may request for the purpose of familiarizing Buyer
      with the Business, the Purchased Assets and the Assumed Liabilities and
      obtaining any Required Governmental Approvals, any Required Contractual Consents
      or any required Licenses or Permits. In order that Buyer may have the full
      opportunity to do so, Seller shall furnish Buyer and its representatives during
      such period with all information concerning the Business, the Purchased Assets
      and the affairs and financial condition of Seller as Buyer or such
      representatives may request and cause Seller’s officers, employees, consultants,
      agents, accountants and attorneys to cooperate fully with Buyer and such
      representatives and to make full disclosure of all information and documents
      requested by Buyer and/or such representatives; provided, however, that without
      the consent of the relevant employee, no personnel file of any employee of
      Seller shall be made available to Buyer or its representatives. Any such
      investigations and examinations shall be conducted at reasonable times and
      under
      reasonable circumstances and all confidential information shall be subject
      to
      the Confidentiality Agreement between Buyer and Seller dated June 23, 2005.
      No investigation by Buyer shall, however, diminish or obviate in any way, or
      affect Buyer’s right to rely upon, any of the representations, warranties,
      covenants or agreements of Seller contained in this Agreement.




38


8.2  Cooperation;
      Consents . Prior to
      the Closing Date, each party shall cooperate with the other to the end that
      the
      parties shall (i) in a timely manner make all necessary filings with, and
      conduct negotiations with, all Authorities and other Persons the consent or
      approval of which, or a license or permit from which, is required for the
      consummation of the transactions contemplated herein and (ii) provide to
      each other party such information as the other party may reasonably request
      in
      order to enable it to prepare such filings and to conduct such negotiations. The
      Shareholders shall cause Seller to timely fulfill its obligations hereunder
      and
      shall not, either directly or indirectly through any of their representatives
      or
      otherwise, take any action to hinder, delay or frustrate the consummation of
      the
      transactions described herein. Without limiting the foregoing, the Shareholders
      shall not revoke, rescind, withdraw or cancel their authorization and approval
      of the transactions described herein. The parties shall also use their
      respective best efforts to expedite the review process and to obtain all such
      necessary consents, approvals, licenses and permits as promptly as practicable.
      To the extent permitted by Applicable Law, the parties shall request that each
      Authority or other Person whose review, consent or approval is requested treat
      as confidential all information which is submitted to it. Notwithstanding the
      foregoing, in no event shall Buyer, Seller or any of their Affiliates be
      obligated (i) to make any payments to third parties (other than filing fees
      payable to Authorities), (ii) to consent to any change in the terms of any
      agreement or arrangement which would be materially adverse to its interests
      or
      the interests of its Affiliates, (iii) to make any disposition, including,
      without limitation any disposition of any Subsidiary, asset, business or line
      of
      products or (iv) to comply with any condition or undertaking or take any action
      which is reasonably unacceptable to it, to obtain any such Required Governmental
      Approval or Required Contractual Consent. Seller and Buyer shall bear their
      own
      costs and expenses incurred or fees paid to Authorities to obtain the Required
      Governmental Approvals and Required Contractual Consents. Each Party shall
      bear
      its own costs and expenses (including fees paid to authorities) incurred to
      obtain such consents, approvals, licenses or permits.




8.3  Preservation
      and Conduct of Business . From the
      date hereof through the Effective Time, Seller shall conduct the Business only
      in the ordinary course and consistent with prudent commercial practices and
      shall use its best efforts (i) to preserve the Business intact,
      (ii) to keep available to Buyer the services of its present officers,
      employees, agents and independent contractors, (iii) to pay its current
      obligations in a manner consistent with its past practices, and (iv) to preserve
      for the benefit of Buyer the goodwill of its customers, licensees, suppliers
      and
      others having business relations with it .
      If
      Seller requires additional funds in order to operate pending Closing, CVF and
      Heptagon shall from time to time advance such funds to Seller on a timely basis.
      Such advances shall be Excluded Liabilities and shall either be repaid by Seller
      or, if applicable, shall be converted into equity of Seller in accordance with Section
      4.5 .




8.4  Covenants .
      Without
      limiting the foregoing, from and after the execution of this Agreement through
      the Effective Time:




39


(a)  Affirmative
      Covenants . Seller
      shall:




(i)  (A)
      maintain its assets in the ordinary course of its business consistent with
      its
      past practices in good operating order and condition, reasonable wear and tear,
      damage by fire and other casualty excepted, (B) promptly repair, restore or
      replace assets in the ordinary course of its business consistent with its past
      practices, and (C) upon any damage, destruction or loss to any of its assets,
      apply any and all insurance proceeds received with respect thereto to the prompt
      repair, replacement and restoration thereof to the condition of its assets
      before such event;




(ii)  comply
      in
      all material respects with all Applicable Laws;




(iii)  maintain
      in force (including necessary renewals thereof) the insurance policies listed
      on Schedule
      6.13 ,
      except
      to the extent that they may be replaced with equivalent policies appropriate
      to
      insure its respective assets, properties and business to the same extent as
      currently insured at the same rates or at different rates approved by
      Buyer;




(iv)  promptly
      notify Buyer of any lawsuits, claims, proceedings or investigations which after
      the date hereof are threatened or commenced against Seller or any officer,
      director, employee, consultant, agent or shareholder thereof, in their
      capacities as such, which, if decided adversely, could reasonably be expected
      to
      have a Seller Material Adverse Effect; and




(v)  promptly
      notify Buyer in writing of any other action, event, condition or circumstance,
      or group of actions, events, conditions or circumstances, that results in,
      or
      could reasonably be expected to result in, a Seller Material Adverse Effect,
      other than changes in general economic conditions.




(b)  Negative
      Covenants . Without
      Buyer’s prior written consent, which shall not be unreasonably withheld, Seller
      shall not:




(i)  merge
      or
      consolidate with any other Person, acquire control of all or substantially
      all
      of the assets of any other Person, or take any steps incident to, or in
      furtherance of, any of such actions, whether by entering into an agreement
      or
      otherwise;




(ii)  purchase,
      lease, license or otherwise acquire any material amount of rights or assets
      from
      any other Person other than in the ordinary course of its business and
      consistent with its past practices;




(iii)  sell,
      assign, lease, license, transfer or otherwise dispose of, or mortgage, pledge
      or
      encumber (other than by a Permitted Lien) any material amount of its assets
      other than in the ordinary course of its business consistent with its past
      practices;




(iv)  make
      or
      commit to make any capital expenditure if, after giving effect thereto, the
      aggregate of capital expenditures made or committed to be made after the date
      of
      this Agreement would exceed $25,000;




40


(v)  except
      in
      accordance with Section 8.3 ,
      create,
      incur, assume, or guarantee any indebtedness for borrowed money or enter into
      any “keep well” or other agreement to maintain any financial statement
      condition, in each case other than in the ordinary course of its business where
      the aggregate dollar amount of all of the foregoing by Seller does not exceed
      $50,000;




(vi)  issue
      or
      sell any shares of its capital stock of any class or any other of its
      securities, or issue, grant or create any warrants, obligations, subscriptions,
      options, convertible securities, stock appreciation rights or other commitments
      to issue shares of capital stock;




(vii)  amend
      its
      Articles of Incorporation, charter bylaws or other charter
      documents;




(viii)  pay,
      discharge or satisfy any claim, liability or obligation (absolute, accrued,
      contingent or otherwise), other than the payment, discharge or satisfaction
      for
      fair and equivalent value in the ordinary course of its business consistent
      with
      its past practices of liabilities or obligations reflected or reserved against
      in its Company Balance Sheet or incurred in the ordinary course of its business
      since the Seller Balance Sheet Date or as otherwise contemplated by this
      Agreement;




(ix)  amend,
      renew or terminate any Seller Material Contract or any License or Permit to
      which it is a party, or relinquish or fail to renew any Seller Material Contract
      or any License or Permit to which it is a party or waive, release or assign
      any
      material rights or claims thereunder, in each case in a manner that could
      reasonably be expected to have a Seller Material Adverse Effect;




(x)  commit
      a
      material default under any term or provision of, or suffer or permit to exist
      any condition or event which, with notice or lapse of time or both, would
      constitute a material default by it under, any Seller Material Contract or
      any
      of its Licenses or Permits;




(xi)  dispose
      of or permit to lapse any rights to the use of any Intellectual Property or
      dispose of or disclose any Intellectual Property not a matter of public
      knowledge, except for dispositions and lapses which, in the aggregate, do not
      have a Seller Material Adverse Effect;




(xii)  take
      any
      action which could reasonably be expected to have a Seller Material Adverse
      Effect; or




(xiii)  agree
      to
      do any of the things described in the preceding clauses (i) - (xii).




8.5  Interim
      Seller Financial Statements .
      From
      the date hereof through the Effective Time, within 30 calendar days following
      the end of each calendar month, Seller shall deliver to Buyer a Seller “in
      house” prepared summary of its earnings for the period from Seller Balance Sheet
      Date through the end of such calendar month and the applicable comparative
      period in the preceding fiscal year and balance sheet as of the end of such
      month, in each case accompanied by a certificate of the President of Seller
      to
      the effect that all such financial statements fairly present the financial
      position and results of operations of Seller as of the date or for the periods
      indicated, in accordance with GAAP, except as otherwise indicated in such
      statements or described in Section 6.5(a) and
      subject to year end audit adjustments. Such certificate shall also state that
      except as noted, from Seller Balance Sheet Date through the end of the previous
      month there has been no Seller Material Adverse Effect.




41


8.6  Notices . From the
      date hereof through the Effective Time, Seller shall give to Buyer prompt
      written notice of the occurrence or existence of any event, condition or
      circumstance occurring which would constitute a violation or breach of this
      Agreement by Seller or the Shareholders or which would render inaccurate in
      any
      material respect any of Seller’s representations or warranties of Seller or the
      Shareholders contained herein. Upon the request of Buyer and, in any event,
      two
      (2) Business Days prior to Closing, Seller shall provide Buyer with a copy
      of
      each Contract entered into by Seller after the date hereof.




8.7  Non-Competition .
      On or
      prior to the Closing Date, Seller and each Shareholder shall execute and deliver
      to Buyer the Non-Competition Agreement in the form of Exhibit B .




8.8  Employment
      Matters .




Certain
      Employee Matters .




(i)  Except
      as
      provided in Section 3.1(c) ,
      Seller
      shall pay to all employees who are employed in the Business prior to or as
      of
      the Closing Date all compensation and benefits to which they are entitled
      (whether pursuant to Seller policy, employment agreements, severance or
      termination agreements, notice requirements under Applicable Law or any labor
      union or collective bargaining agreements) for periods prior to the Closing
      Date, including without limitation salaries, commissions, bonuses, deferred
      compensation, severance, insurance, pensions and profit sharing, and including
      any contingent payments, bonuses or incentive compensation accrued but unpaid
      through the Closing Date, and shall be responsible for severance payments to
      any
      such employees who are employed by Buyer in the Business after the Closing
      Date.




(ii)  Buyer
      shall have the right, in its sole and absolute discretion (but not any
      obligation), to offer employment on or after Closing Date on, subject to
      Applicable Law, an “at will” basis to any of the employees of Seller, in each
      instance whether or not any of such persons is on disability or workers’
compensation leave as of the Closing Date, and in each instance, on terms and
      conditions determined by Buyer, in its sole and absolute discretion. In this
      regard, if Buyer so desires, from the date hereof through the Closing Date,
      Seller shall permit Buyer to approach and negotiate with any or all employees
      of
      Seller, including, but not limited to, managerial staff, in an effort to
      persuade them to continue in the employ of Seller pending the Closing and in
      the
      employ of Buyer thereafter, and Seller shall use reasonable efforts to assist
      Buyer in such negotiations.




(iii)  To
      the
      extent the consummation of the transactions contemplated herein (which may
      include the termination of Seller’s employees) requires the giving of any such
      notices, Seller shall be responsible for providing on a timely basis any and
      all
      required notices under Applicable Law to its employees or other Persons. Seller,
      CVF and Heptagon shall, subject to Section 13.8 ,
      jointly
      and severally indemnify and hold harmless Buyer, its Affiliates and their
      respective shareholders, members, directors, officers, managers, employees,
      agents, attorneys and successors-in-interest from and against any and all Losses
      which Buyer and any such other Persons may incur relating to or arising from
      any
      termination of any employee of the Business
      before Closing, including, without limitation, Losses related to severance
      expenses and payments, the failure to timely provide notice prior to
      termination, or costs and expenses and claims arising under any statute, rule,
      regulation, ordinance, policy, common law or contract.




42


(iv)  Notwithstanding
      any possible inferences to the contrary, nothing contained in this Agreement
      shall confer upon any employee of Seller who is hired by Buyer any right with
      respect to continuance of employment by Buyer, nor shall anything herein
      interfere with the right of Buyer to terminate the employment of any such
      employee at any time, with or without cause, or restrict Buyer in the exercise
      of its independent business judgment in modifying any of the terms and
      conditions of the employment of any such employee. No provision of this
      Agreement shall create any third party beneficiary rights in any employee of
      the
      Business, any beneficiary or dependents thereof, or any collective bargaining
      representative thereof with respect to the compensation, terms and conditions
      of
      employment and benefits that may be provided to any such employee by Buyer
      or
      under any benefit plan which Buyer may maintain.




8.9  No
      Solicitation or Negotiation .
      Unless
      and until this Agreement is terminated, neither Seller nor any Shareholder
      shall, nor shall any of them cause, suffer or permit any of their directors,
      officers, employees, representatives, agents, investment bankers, advisors,
      accountants or attorneys to, initiate or solicit, directly or indirectly, any
      inquiries or the making of any proposal that constitutes or could be reasonably
      expected to lead to an Alternative Proposal from any Person, or engage in any
      discussions or negotiations relating thereto, or accept any Alternative
      Proposal, or make or authorize any statement, recommendation or solicitation
      in
      support of any Alternative Proposal, or provide any confidential information
      or
      data to any Person with respect to any Alternative Proposal, or otherwise
      facilitate, attempt to seek or continue any of the foregoing. Seller or such
      Shareholder who receives any of the foregoing shall notify Buyer orally and
      in
      writing of the receipt of any such inquiries, offers or proposals (including
      term and conditions of any such offer or proposal, the identity of the Person
      making it and a copy of any written Alternative Proposal), as promptly as
      practicable and in any event within forty-eight (48) hours after the receipt
      thereof, and shall keep Buyer informed of the status and details of any such
      inquiry, offer or proposal.




8.10  Risk
      of Loss .
      Seller
      hereby assumes all risk of loss, damage and destruction to all or any part
      of
      the Purchased Assets until the Effective Time from any cause whatsoever, whether
      or not Seller is insured therefor, including, but not limited to, fire, flood,
      accident, acts of God, earthquake, insurrection, riot, or other causes commonly
      referred to as force majeure events. Seller further assumes all risk until
      the
      Effective Time of any Seller Material Adverse Effect from any cause
      whatsoever.




8.11  Transition
      Assistance . Seller
      will use reasonable efforts (without incurring costs) to assist Buyer in
      transitioning third party provided services such as internet access, utilities,
      phone service, etc. and in transitionary licensees.




43


8.12  Assistance
      in Transfer of Records and Data . Seller
      will fully cooperate with Buyer and make such advance preparations (including
      making copies in advance, collecting paperwork, coordinating information about
      computer systems and configurations) as are necessary so that Seller can
      deliver, and Seller shall deliver, the data, records and other Intellectual
      Property to Buyer on the Closing Date.




8.13  Change
      of Record Title .
      To the
      extent that record title to any of the Purchased Assets continues to be held
      by
      Seller in the name of Omphalos Recovery Systems, Inc., Seller shall, prior
      to
      the Closing Date, cause record title in such Purchased Assets to be changed
      to
      its current corporate name and provide Buyer with confirmation of such change
      in
      record title in form satisfactory to Buyer and its counsel.




8.14  Meeting
      of Seller’s Shareholders .
      Within
      one (1) Business Day of the execution of this Agreement by all parties, the
      Shareholders shall cause Seller to provide notice of a meeting of all
      shareholders of Seller upon 21 days’ notice in accordance with its by-laws and
      to provide such 21 days’ notice to all shareholders of Seller of the execution
      of this Agreement and the desire to complete the transaction which will be
      voted
      on such meeting. Seller has provided to Buyer a true and correct copy of the
      notice that it shall provide to its shareholders in accordance with the
      preceding sentence. Seller shall hold such meeting of all shareholders of Seller
      on the day specified in the notice and shall not adjourn or postpone the meeting
      without conducting a vote on the approval of this transaction.




8.15  Bulk
      Sales .
      If
      Seller does not obtain an order under Section 3 of the Bulk Sales Act (Ontario)
      exempting the sale of the Purchased Assets from the application of such Act
      at
      least three (3) Business Days prior to the Closing Date, then Seller shall
      comply with the provisions of such Act and, in particular, Seller shall provide
      to Buyer duplicate originals of a statement of its secured and unsecured trade
      creditors in accordance with Section 4 of such Act at Closing and Buyer shall
      deduct from the Purchase Price and pay directly, or cause to be paid through
      Escrow by the Escrow Agent, to such creditors the amount of Seller’s
      indebtedness to them (other than any Assumed Liabilities) by certified cheques,
      provided that Buyer shall be under no obligation to pay any creditors if the
      aggregate amount and such indebtedness is more than the Purchase
      Price.




8.16  GST
      Registration .
      Prior
      to the Closing, Buyer shall duly register under subdivision (d) of Division
      I of
      Part IX of the *Excise
      Tax Act* (Canada)
      with respect to GST.




8.17  [Intentionally
      omitted.]




8.18  SIL .
      Upon
      Closing, and the payment by Buyer to Scientific Instrumentation, Ltd. of the
      amounts set forth in the Disbursement Schedule, Seller shall cause Scientific
      Instrumentation, Ltd. to deliver to Buyer all drawings, designs, sketches and
      other tangible and intangible assets relating to the manufacture of Seller’s ISi
      and other equipment, together with 14 completed ISi units, and all parts and
      supplies relating thereto.




8.19  Class
      B Stock .
      Seller
      shall use its best efforts to enter into an agreement prior to Closing with
      the
      holder of all of the issued and outstanding “Class B Stock” as to the amount
      payable to such holder in respect of such stock or other claims. Such agreement
      shall also contain a waiver from both Seller and the holder of the “Class B
      Stock” waiving the requirement in Seller’s articles of incorporation (as amended
      and supplemented) that the “Class B Stock” can only be redeemed sixty (60) days
      after Seller receives a redemption notice from the holder of the “Class B
      Stock”. In any event, Seller shall cause to be paid to such holder from the
      Purchase Price such amounts.




44


ARTICLE
      IX




CONDITIONS
      PRECEDENT TO THE OBLIGATION




OF
      EACH PARTY TO CLOSE




The
      obligations of Seller, the Shareholders and Buyer to consummate the transactions
      contemplated herein shall be subject to the fulfillment, at or prior to the
      Closing of all of the conditions set forth below in this ARTICLE
      IX .




9.1  No
      Action or Proceeding . The
      consummation of the transactions contemplated herein shall not violate any
      Applicable Law. Further, no temporary restraining Order, preliminary or
      permanent injunction, cease and desist Order or other legal restraint preventing
      the consummation of the transactions contemplated herein, or imposing material
      damages in respect thereof, shall be in effect, nor shall there be any action
      or
      proceeding pending or threatened by any Person which seeks any of the foregoing
      or seeks to impose conditions which would be materially burdensome upon the
      Business, and which presents a substantial risk that the relief sought will
      be
      granted.




9.2  Governmental
      and Other Approvals . Other
      than with respect to Deferred Consents, all Required Governmental Approvals
      and
      all Required Contractual Consents shall have been obtained without the
      imposition of any conditions that are or would be materially burdensome upon
      the
      Business. Other than with respect to Deferred Consents, all Required
      Governmental Approvals and Required Contractual Consents shall be in effect
      and
      all conditions and requirements prescribed by any of the same to be satisfied
      on
      or prior to the Closing Date shall have been satisfied.




9.3  Shareholder
      Approval .
      The
      transactions contemplated by the Agreement shall have been approved by the
      shareholders of Seller at a meeting duly called for that purpose upon 21 days’
notice to such shareholders.




ARTICLE
      X




CONDITIONS
      PRECEDENT TO THE OBLIGATION




OF
      BUYER TO CLOSE




The
      obligation of Buyer to consummate the transactions contemplated herein shall
      be
      subject to the fulfillment, at or before the Closing Date, of all of the
      conditions set forth below in this ARTICLE
      X .




10.1  Representations
      and Warranties .
      The
      representations and warranties of Seller and the Shareholders contained in
      this
      Agreement and in each other Seller Document shall have been true and correct
      when made and shall be true and correct in all material respects on and as
      of
      the Closing Date with the same force and effect as though made on and as of
      the
      Closing Date, other than such representations and warranties as are made as
      of
      another specified date, which shall be true and correct as of such date;
      provided, however, that if any portion of any representation or warranty is
      already qualified by materiality, then for purposes of determining whether
      this Section 10.1 has been
      satisfied, that portion of such representation or warranty as so qualified
      must
      be true and correct in all respects. At the Closing Seller and the Shareholders
      shall have delivered to Buyer certificates to such effect signed by the
      President and the Chief Financial Officer of Seller and each Shareholder, and
      addressed to Buyer .


45




10.2  Performance
      of Covenants .
      Each
      obligation of Seller or a Shareholder to be performed by it on or before the
      Closing Date pursuant to the terms of this Agreement and each other Seller
      Document shall have been duly performed on or before the Closing
      Date and such
      party shall have delivered to Buyer a certificate to such effect signed by
      its
      President and Chief Financial Officer and addressed to Buyer.




10.3  No
      Adverse Change .
      There
      shall not have occurred between the date hereof and the Closing Date any Seller
      Material Adverse Effect, nor shall there have occurred any event, development
      or
      state of facts or circumstances (other than a change in general economic
      conditions) which could reasonably be expected to result in any of the
      foregoing, either alone or together with other such occurrences. At the Closing
      Seller shall have delivered to Buyer a certificate to such effect signed by
      the
      President and Chief Financial Officer of Seller and addressed to Buyer and
      its
      lenders.




10.4  Opinion
      of Counsel to Seller . Buyer
      shall have received the favorable opinion of McCarter Grespan Robson Beynon
      Thompson LLP, counsel to Seller, dated as of the Closing Date, addressed to
      Buyer ,
      in the
      form of Exhibit
      D .




10.5  Litigation .
      No
      action, suit or proceeding shall have been instituted before any court or
      governmental body or instituted or threatened by any governmental agency or
      body
      which has or could reasonably be expected to have, in the good faith opinion
      of
      Buyer, an adverse effect on the Intellectual Property or other Purchased Assets
      or a Seller Material Adverse Effect.




10.6  Pay-Off
      Letters . Seller
      or the Escrow Agent shall have received from each Shareholder and each Person
      who holds a Lien (other than a Permitted Lien) against any of the Purchased
      Assets a written commitment, in form satisfactory to Buyer and its counsel,
      to
      the effect that upon receipt by such party of payment in full of the obligations
      owed to such party as set forth in such commitment (which in the case of the
      Shareholders shall be subject to reduction by converting all or a portion of
      such obligation into equity of Seller as described in Section 4.5 )
      such
      Party will release all liens and security interests in its favor encumbering
      the
      Purchased Assets. In this regard, Seller or the Escrow Agent shall also have
      received UCC termination statements, signed verification statements discharging
      the personal property security interests from each Shareholder and Person who
      holds a Lien (other than a Permitted Lien) against the Purchased Assets, as
      well
      as such other documents sufficient to release all other types of Liens and
      security interests registered against the Purchased Assets, with authority
      to
      file and/or record the same in the appropriate governmental offices upon payment
      of the amount set forth in such pay-off letter and shall have transmitted the
      same for filing and/or recordation.




46


10.7  Non-Competition
      Agreements . Seller
      and each Shareholder shall have executed and delivered to Buyer the
      Non-Competition Agreements contemplated in Section 8.7 .




10.8  [Intentionally
      omitted.]




ARTICLE
      XI




CONDITIONS
      PRECEDENT TO THE OBLIGATION




OF
      SELLER TO CLOSE




The
      obligation of Seller to consummate the transactions contemplated herein shall
      be
      subject to the fulfillment, at or before the Closing Date, of all the conditions
      set forth below in this ARTICLE
      XI .




11.1  Representations
      and Warranties .
      The
      representations and warranties of Buyer contained in this Agreement and in
      each
      other Buyer Document shall have been true and correct when made and shall be
      true and correct in all material respects on and as of the Closing Date with
      the
      same force and effect as though made on and as of the Closing Date, other than
      such representations and warranties as are made as of another specified date,
      which shall be true and correct as of such date; provided, however, that if
      any
      portion of any representation or warranty is already qualified by materiality,
      for purposes of determining whether this Section 11.1 has been
      satisfied, that portion of such representation or warranty as so qualified
      must
      be true and correct in all respects; and provided, further, that no breach
      of
      Buyer’s representations or warranties shall constitute a failure of this
      condition precedent unless that breach, either alone or together with all other
      such breaches, is material to Seller. At the Closing Buyer shall have delivered
      to Seller a certificate to such effect signed by the President and Chief
      Financial Officer of Buyer and addressed to Seller.




11.2  Performance
      of Covenants . Each of
      the obligations of Buyer to be performed by it on or before the Closing Date
      pursuant to the terms of this Agreement and each other Buyer Document shall
      have
      been duly performed in all material respects on or before the Closing Date;
      provided, however, that no breach of any such obligation or covenant shall
      constitute a failure of this condition precedent unless that breach, either
      alone or together with all other such breaches, is material to Seller. At the
      Closing Buyer shall have delivered to Seller a certificate to such effect signed
      by the President and Chief Financial Officer of Buyer and addressed to
      Seller.




ARTICLE
      XII




COVENANTS
      AND AGREEMENTS OF THE PARTIES




AFTER
      CLOSING




12.1  Continuation
      of Existence . Seller
      shall maintain its corporate existence, powers and authority until at least
      the
      second anniversary of the Closing Date and during such period shall also
      maintain a net worth, determined in accordance with GAAP, of at least
      $1,000,000.




12.2  Change
      Seller’s Name .
      Upon
      the Closing, Seller shall discontinue further use of the name “Gemprint”, or any
      other name or logo which is part of the Intellectual Property either alone
      or in
      combination with other words and all marks, trade dress, logos, monograms,
      domain names and other source identifiers similar to any of the foregoing or
      embodying any of the foregoing alone or in combination with other words
      (collectively the “ Publication
      Names and Marks ”).
      Immediately upon the Closing, the Company, the Shareholders and their Affiliates
      shall cease all use of the Publication Names and Marks on or in connection
      with
      all stationary, business cards, purchase orders, invoices and other similar
      correspondence and other documents of a contractual nature; provided, however,
      that where Seller is legally required to identify itself until its name has
      been
      changed, it may continue to use its corporate name. The Company and the
      Shareholders agree that, upon the Closing, neither the Company, the Shareholders
      nor any of their respective Affiliates shall have any rights in the Publication
      Names and Marks and neither the Company, the Shareholders nor any of their
      respective Affiliates shall contest the ownership or validity of any rights
      being assigned to Buyer hereunder in or to the Publication Names and Marks.
      Not
      later then one (1) Business Day after the Closing Date, Seller shall file
      articles of amendment with Industry Canada and otherwise take such corporate
      action as may be necessary to change its name to another name not including
      the
      word “Gemprint” or any other Publication Names and Marks. Seller shall provide
      Buyer, following the Closing, with a copy of the articles of amendment filed
      with Industry Canada.




47


12.3  NWT
      Receivable .
      If the
      NWT Receivable to be assigned to Buyer as part of the Purchased Assets has
      not
      been paid in full within six (6) months of the Closing Date, Seller shall,
      upon
      demand of Buyer, pay to Buyer the then outstanding balance of the NWT
      Receivable. Upon receipt of such payment, Buyer shall assign to Seller the
      right
      to collect such outstanding NWT Receivable (which shall not include any right
      to
      collect any receivable generated after the Closing Date).




12.4  Refunds
      and Remittances .
      After
      the Closing Date, if Seller or any of its Affiliates receives any refund or
      other amount which is a Purchased Asset, relates to an Assumed Liability or
      is
      otherwise properly due and owing to Buyer in accordance with the terms of this
      Agreement, Seller promptly shall remit, or shall cause to be remitted, such
      amount to Buyer.




ARTICLE
      XIII




INDEMNIFICATION




13.1  Indemnification
      by Seller, CVF and Heptagon . Seller,
      CVF and Heptagon shall, subject to Section 13.8 ,
      jointly
      and severally, indemnify, defend and hold harmless (i) Buyer,
      (ii) each of Buyer’s Affiliates, assigns and successors in interest to the
      Purchased Assets, and (iii) each of their respective shareholders, members,
      directors, officers, managers, employees, agents, attorneys and representatives,
      from and against any and all Losses which may be incurred or suffered by any
      such party and which may arise out of or result from :




(a)  provided
      Buyer’s claim therefor is instituted by written notice within the time period
      specified in Section 13.6 ,
      any
      breach of any representation, warranty, covenant or agreement of Seller or
      the
      Shareholders contained in this Agreement or in any other Seller Document and
      any
      breach of any such representation or warranty as if such representation and
      warranty were made on and as of the Closing Date, including, without limitation,
      any attempt (whether or not successful) by any Person to cause or require Buyer
      to pay, perform or discharge any debt, obligation, deficiency, liability or
      commitment the existence of which constitutes a breach of any such
      representation, warranty, covenant or agreement;




48


(b)  any
      litigation, arbitration, governmental investigation, suit, action or other
      proceeding referred to at Section
      6.8 ;




(c)  any
      severance obligation of Buyer to any of Seller’s employees that Buyer employs in
      the Business following the Closing in excess of the obligation being assumed
      by
      Buyer pursuant to Section
      3.1(c) ;




(d)  any
      Tax
      Liability of Seller, any liability not disclosed in Schedule
      6.5(e) or in
      the Disbursement Schedule or disclosed but in excess of $150,000 in the
      aggregate, and any other Excluded Liability;




(e)  any
      other
      debt, liability or obligation of Seller, direct or indirect, fixed, contingent
      or otherwise, now or as of the Effective Time known or unknown, and whether
      or
      not then due or payable, which exists at or as of the Effective Time or which
      arises after the Effective Time but which is based upon or arises from any
      act,
      omission, transaction, circumstance, sale of goods or services, state of facts
      or other condition which occurred or existed on or before the Effective Time,
      except to the extent the same is expressly assumed by Buyer pursuant to Section 3.1 ;




(f)  any
      claim
      that any of the patents, software or other Intellectual Property owned by Seller
      and used by it infringes the rights of any other Person;




(g)  any
      claim
      by any holder of “Class B Stock” of Seller with respect to any notice of
      redemption, the redemption or attempted redemption of such stock, the payment
      of
      amounts due such holder or to which such holder is entitled, the approval of
      Seller’s shareholders to the transactions contemplated herein, any other matter
      which may relate to this Agreement or any other claim made by such holders;
      and




(h)  any
      and
      all actions, suits, proceedings, claims, demands, assessments, judgments, costs
      and expenses, including, without limitation, legal fees and expenses, incurred
      in enforcing this indemnity.




13.2   Indemnification
      by Buyer .
      Provided Seller’s claim therefor is instituted by written notice within the time
      period specified in Section 13.7 ,
      Buyer
      shall indemnify, defend and hold harmless Seller from and against any Losses
      arising out of or due to (i) a breach of any representation, warranty,
      covenant or agreement of Buyer contained in this Agreement or in any Buyer
      Document and any breach of any such representation or warranty as if such
      representation and warranty were made on and as of the Closing Date; and
      (ii) any liability or obligation assumed by Buyer pursuant to Section 3.1 .




13.3  Computation
      of Losses . **** For
      purposes of calculating any Losses suffered by an indemnified party pursuant
      to Sections 13.1 , (h) ,
      or
      under any other specific indemnification covenant contained in this Agreement,
      the amount of the Losses suffered by the indemnified party shall be the net
      amount of Losses so suffered after giving effect to (i) any insurance proceeds
      recoverable with respect to such matter and (ii) any Tax Benefits attributable
      to such Losses. **** Each
      Loss
      shall bear interest at 5% per annum from the date incurred to the date the
      indemnification payment with respect thereto is made.




49


13.4  Notice
      to Indemnifying Party . Any
      party (the “ Indemnified
      Party ”)
      seeking indemnification pursuant to Sections 13.1 or 1.1(h) ,
      or
      pursuant to any other indemnification covenant contained in this Agreement,
      shall promptly give the party from whom such indemnification is sought (the
      “ Indemnifying
      Party ”)
      written notice of the matter with respect to which such indemnification is
      sought, which notice shall specify in reasonable detail, if known, the amount
      or
      an estimate of the amount of the liability arising therefrom and the basis
      of
      the claim. Such notice shall be a condition precedent to any liability of the
      Indemnifying Party for indemnification hereunder, but the failure of the
      Indemnified Party to give prompt notice of a claim shall not adversely affect
      the Indemnified Party’s right to indemnification hereunder except
      to
      the extent that (but only to the extent that) the Indemnifying Party
      conclusively demonstrates that (i) but for such failure, the Indemnifying Party
      could have avoided all or a portion of the Losses in question through contest,
      compromise, settlement or otherwise or (ii) the Indemnifying Party has suffered
      a Loss it would not have suffered absent such failure.




13.5  Third
      Party Claims .




(a)  Defense
      by Indemnifying Party .
      In
      connection with any claim giving rise to indemnity hereunder resulting from
      or
      arising out of any claim or legal proceeding by a Person who is not a party
      to
      this Agreement (a “ Third
      Party Claim ”),
      the
      Indemnifying Party at its sole cost and expense may, upon written notice to
      the
      Indemnified Party, assume the defense of any such
      Third Party Claim (i) if it acknowledges to the Indemnified Party in writing
      its
      obligations to indemnify the Indemnified Party with respect to all elements
      of
      such Third Party Claim (subject to any limitations on such liability contained
      in this Agreement) and (ii) if it provides assurances, reasonably satisfactory
      to the Indemnified Party, that it will be financially able to satisfy such
      Third
      Party Claim in full if the same is decided adversely. If the Indemnifying Party
      assumes the defense of any Third Party Claim, it may use counsel of its choice
      to prosecute such defense, subject to the approval of such counsel by the
      Indemnified Party, which approval shall not be unreasonably withheld or delayed.
      The Indemnified Party shall be entitled to participate in (but not control)
      the
      defense of any such Third Party Claim, with its counsel and at its own expense;
      provided, however, that if the Indemnified Party, in its sole discretion,
      determines that there exists a conflict of interest between the Indemnifying
      Party (or any constituent party thereof) and the Indemnified Party (it being
      understood that the mere fact that the Indemnifying Party is required to
      indemnify the Indemnified Party hereunder shall not, absent any other conflict
      of interest, constitute a conflict of interest for this purpose), then the
      Indemnified Party (or any constituent party thereof) shall have the right to
      engage separate counsel, the reasonable costs and expenses of which shall be
      paid by the Indemnifying Party, but in no event shall the Indemnified Party
      be
      liable for the costs and expenses of more than one such separate
      counsel. **** If
      the
      Indemnifying Party assumes the defense of any such Third Party Claim, the
      Indemnifying Party shall take all steps necessary to pursue the resolution
      thereof in a prompt and diligent manner. In the event that the Indemnifying
      Party exercises the right to undertake any such defense against any such Third
      Party Claim as provided above, the Indemnified Party shall cooperate with the
      Indemnifying Party in such defense and make available to the Indemnifying Party
      all witnesses, pertinent records, materials and information in the Indemnified
      Party’s possession or under the Indemnified Party’s control relating thereto as
      are reasonably required by the Indemnifying Party without cost to the
      Indemnifying Party. The Indemnifying Party shall be entitled to consent to
      a
      settlement of, or the stipulation of any judgment arising from, any such Third
      Party Claim, with the consent of the Indemnified Party, which consent shall
      not
      be unreasonably withheld or delayed; provided, however, that no such consent
      shall be required from the Indemnified Party if (i) the Indemnifying Party
      pays
      or causes to be paid all Losses arising out of such settlement or judgment
      concurrently with the effectiveness thereof (as well as all other Losses
      theretofore incurred by the Indemnified Party which then remain unpaid or
      unreimbursed), (ii) in the case of a settlement, the settlement is conditioned
      upon a complete release by the claimant of the Indemnified Party and (iii)
      such
      settlement or judgment does not require the encumbrance of any asset of the
      Indemnified Party, invalidate, subordinate or result in a license of any
      Intellectual Property which is part of the Purchased Assets or impose any
      restriction upon its conduct of business. Notwithstanding the foregoing,
      however, Buyer, if it is the Indemnified Party, shall in all cases be entitled
      to control of the defense of any such Third Party Claim if it (a) may result
      in
      liabilities which, taken with other then existing claims by Buyer under this ARTICLE
      XIII ,
      would
      not be fully indemnified hereunder, (b) may have an adverse impact on the
      operations or the financial condition of Buyer or the Business (including an
      effect on the Tax liabilities, earnings or ongoing business relationships of
      Buyer or the Business thereafter) even if the Indemnifying Party pays all
      indemnification amounts in full, (c) relates to any Intellectual Property
      which is part of the Purchased Assets, (d) seeks non-monetary relief
      (including, but not limited to, an order or injunction) which could adversely
      affect the Business, or (d) seeks criminal penalties, fines or sanctions against
      Buyer.




50


(b)  Defense
      by Indemnified Party . If the
      Indemnifying Party does not assume the defense of any such Third Party Claim,
      the Indemnified Party may defend against such Third Party Claim and settle
      or
      compromise the same, after giving notice thereof to the Indemnifying Party,
      on
      such terms as the Indemnified Party may deem appropriate, and the Indemnifying
      Party shall be entitled to participate in (but not control) such defense with
      its own counsel and at its own expense. The Indemnifying Party shall cooperate
      with the Indemnified Party in such defense and make available to the Indemnified
      Party, at the Indemnifying Party’s expense, all such witnesses, records,
      materials and information in the Indemnifying Party’s possession or under the
      Indemnifying Party’s control relating thereto as are reasonably required by the
      Indemnified Party. If the Indemnifying Party thereafter seeks to question the
      manner in which the Indemnified Party defended such Third Party Claim or the
      amount or nature of any such settlement, the Indemnifying Party shall have
      the
      burden to prove by a preponderance of the evidence that the Indemnified Party
      did not defend or settle such third-party claim in a reasonably prudent manner.
      The Indemnified Party shall not settle or compromise any Third Party Claim
      for
      which it is entitled to indemnification hereunder, unless suit shall have been
      instituted against it and the Indemnifying Party shall not have assumed the
      defense of such suit after notification as provided in Section 13.4 .




13.6  Survival
      of Representations and Covenants of Seller and the Shareholders .
      Notwithstanding any right of Buyer fully to investigate the affairs of Seller
      and notwithstanding any actual knowledge of facts determined or determinable
      by
      Buyer pursuant to such investigation or right of investigation, Buyer shall
      have
      the right to rely fully upon the representations, warranties, covenants and
      agreements of Seller and the Shareholders contained in this Agreement or in
      any
      agreement, instrument or other document delivered to Buyer by Seller, the
      Shareholders or any of their representatives in connection with the transactions
      contemplated by this Agreement. With the sole exception of those covenants
      which
      are to be performed by Seller after the Closing (which shall survive until
      a
      claim thereon is barred by the applicable statute of limitations (including
      extensions and waivers thereof)), each representation, warranty, covenant and
      agreement of Seller and the Shareholders contained herein shall survive the
      execution and delivery of this Agreement and the Closing and shall thereafter
      terminate and expire on the second anniversary of the Closing Date, **** unless,
      on or before such date, Buyer has delivered to Seller and the Shareholders
      a
      written notice of a claim with respect to such representation, warranty,
      covenant or agreement; provided, however, that (i) the representations and
      warranties contained in Section
      6.4 shall
      continue indefinitely and shall not terminate or expire, and (ii) the
      representations and warranties contained in Sections
      6.6 , 6.7(b) and 6.16 shall
      terminate and expire ninety (90) days after the expiration of the statute of
      limitations (including extensions and waivers thereof) applicable to claims
      by
      third parties against Buyer in respect of the matter or matters which are the
      subject of such representations and warranties unless, on or before such date,
      Buyer has delivered to Seller a written notice of a claim with respect to such
      representation or warranty; and provided, further, that nothing contained herein
      shall terminate or limit in any manner whatsoever any rights Buyer has or may
      have in respect of any knowing or intentional misrepresentation by Seller or
      the
      Shareholders.




51


13.7  Survival
      of Representations and Covenants of Buyer .
      With
      the sole exception of those covenants which are to be performed by Buyer after
      the Closing (which shall survive until a claim thereon is barred by the
      applicable statute of limitations), each representation, warranty, covenant
      and
      agreement of Buyer contained herein shall survive the execution and delivery
      of
      this Agreement and the Closing and shall thereafter terminate and expire on
      the
      second anniversary of the Closing Date, unless, on or before such date, Seller
      has delivered to Buyer a written notice of a claim with respect to such
      representation, warranty, covenant or agreement.




13.8  Determination
      of Indemnification Amounts; Limitations .




(a)  Indemnity
      Cap Amount .
      Except
      as otherwise provided herein, the aggregate liability of Seller, CVF and
      Heptagon for indemnification with respect to Section 13.1(f) or any
      breach of a representation or warranty shall not exceed the Indemnity Cap Amount
      and the individual liability of each Shareholder for such indemnification shall
      not exceed an amount equal to the Indemnity Cap Amount multiplied by the
      Indemnity Percentage set forth in Annex
      I for each
      Shareholder.




(b)  Liability
      of Each Shareholder .
      The
      maximum liability of CVF or Heptagon with respect to any claim for Losses under Section 6.7(c) or with
      respect to Section 13.1 (f) or any
      breach of a representation or warranty shall be such Shareholder’s Indemnity
      Percentage of the Indemnity Cap Amount; provided, that the representation’s and
      warranties contained in ARTICLE
      VI(A) ,
      and any
      indemnification with respect to the Non-Competition Agreement, are made
      severally by each Shareholder as to himself or itself only and any Shareholder
      who has breached such Non-Competition Agreement or any such representation
      or
      warranty as to himself or itself (but only such Shareholder) shall be liable
      with respect to all Losses arising from the breach thereof without being limited
      by Section 13.8(a).




(c)  Order
      of Payment .
      Buyer
      shall seek payment for any amounts due with respect to all claims for
      indemnification under Section 6.7(c) or ARTICLE
      XIII solely
      as follows: (i) first, out of the Escrow in accordance with the provisions
      of
      the Escrow Agreement, and (ii) second, to the extent that amounts owing by
      the Seller and the Shareholders exceed the amount of the remaining funds in
      the
      Escrow then due to Seller, Buyer shall be entitled to seek payment from Seller
      and from each Shareholder directly for such Shareholder’s Indemnity Percentage
      of the amount of such excess, subject to the limitation in Section
      13.8(a) .




52


13.9  No
      Waiver Relating to Claims for Fraud .
      The
      liability of any party under this ARTICLE
      XIII shall be
      in addition to, and not exclusive of, any other liability that such party may
      have at law or equity solely with respect to such party’s fraudulent acts or
      omissions, if any. None of the provisions set forth in Section 13.8 shall be
      deemed a waiver by any party to this Agreement of any right or remedy which
      such
      party may have at law or equity solely with respect to any other party’s
      fraudulent acts or omissions, nor shall any such provisions limit, or be deemed
      to limit (i) the amounts of recovery sought or awarded in any such claims for
      fraud, (ii) the time period during which a claim for fraud may be brought or
      (iii) the recourse which any such party may seek against another party with
      respect to a claim for fraud.




13.10  Disbursements .
      Twelve
      (12) months from the Closing Date, Escrow Agent shall release from Escrow to
      Seller an amount equal to the difference between (a) $212,500 and
      (b) the sum of (i) the disbursements made from Escrow prior to such
      date, and (ii) the sum of all Losses subject to then-pending
      indemnification claims made under this Agreement.




ARTICLE
      XIV




TERMINATION;
      REMEDIES




14.1  Termination
      Without Default .
      Anything herein to the contrary notwithstanding, this Agreement and the
      transaction contemplated by this Agreement shall terminate at the close of
      business on February 28, 2006, unless extended by the mutual consent in
      writing of the parties, and, except as specified in Section 14.2 ,
      may
      otherwise be terminated before the Closing only as follows (and in no other
      manner):




(a)  Mutual
      Consent .
      By the
      mutual consent in writing of the parties.




(b)  Conditions
      to Buyer’s Performance Impossible .
      By
      Buyer upon written notice to Seller if any event occurs which would render
      impossible the satisfaction of one or more conditions to the obligations of
      Buyer set forth in ARTICLE IX or Sections  10.3 , 10.4 or 10.5 .




(c)  Conditions
      to Seller’s Performance Impossible .
      By
      Seller upon written notice to Buyer if any event occurs which would render
      impossible the satisfaction of one or more conditions to the obligations of
      Seller set forth in ARTICLE IX .




(d)  Alternative
      Proposal .
      By
      Buyer upon written notice to Seller and the Shareholders of a default under Section 8.9 ,
      or any
      of Seller, CVF or Heptagon accepts an Alternative Proposal or publicly announces
      that any of them are considering whether to accept an Alternative
      Proposal.




53


(e)  Buyer
      Option . By
      Buyer
      upon written notice to Seller, given at any time after December 31, 2005,
      if the Closing has not occurred by December 31, 2005 other than as a result
      of a default by Buyer in the performance of its obligations
      hereunder.




14.2  Termination
      Upon Default .
      Either
      party may terminate this Agreement by giving notice to the other on or prior
      to
      the Closing Date, without prejudice to any rights or obligations it may have,
      if
      (i) after written notice of the default and the passage of (A **)** ten
      (10)
      Business Days, in the case of a default which is by its nature incapable of
      being cured, or (B) thirty (30) Business Days, or such shorter period as may
      end
      upon the scheduled Closing Date, in the case of a default which by its nature
      is
      capable of being cured, the other party has failed in the due and timely
      performance of any of its covenants or agreements herein contained (other than
      those contained in Section 8.9 or there
      shall have been a breach of the other’s warranties or representations herein
      contained, and (ii) such failure or breach could reasonably be expected to give
      the
      non-defaulting party grounds not to close pursuant to Sections 10.1 , 10.2 , 11.1 or 11.2 ,
      as the
      case may be. In any such event the party who is not guilty of the breach may,
      in
      addition to all of its other rights and remedies, recover all Losses incurred
      by
      it from the party responsible for the breach.




14.3  Specific
      Performance . The
      parties acknowledge that the Purchased Assets are unique and cannot be obtained
      by Buyer except from Seller and for that reason, among others, Buyer will be
      irreparably damaged in the absence of the consummation of this Agreement.
      Therefore, in the event of any breach by Seller or the Shareholders of this
      Agreement, Buyer shall have the right, at its election, to obtain an order
      for
      specific performance of this Agreement, without the need to post a bond or
      other
      security, to prove any actual damage or to prove that money damages would not
      provide an adequate remedy.




14.4  Attorneys’
      Fees .
      If
      Seller or Buyer shall bring an action against the other by reason of any alleged
      breach of any covenant, provision or condition hereof, or otherwise arising
      out
      of this Agreement (including, without limitation, in connection with an
      arbitration proceeding brought pursuant to Section
      4.2 )
      , the
      unsuccessful party shall pay to the prevailing party all attorneys’ fees and
      costs actually incurred by the prevailing party, in addition to any other relief
      to which it may be entitled. As used in this Section 14.4 and
      elsewhere in this Agreement, “actual attorneys’ fees” or “attorneys’ fees
      actually incurred” means the full and actual cost of any legal services actually
      performed in connection with the matter for which such fees are sought
      calculated on the basis of the usual fees charged by the attorneys performing
      such services, and shall not be limited to “reasonable attorneys’ fees” as that
      term may be defined in statutory or decisional authority.




14.5  Waiver
      of Immunity . To
      the
      extent that Seller may be entitled, in any jurisdiction in which judicial
      proceedings may at any time be commenced with respect to this Agreement or
      any
      other Seller Document, to claim for itself or its revenues, assets or properties
      immunity (whether on grounds of sovereignty or otherwise) from suit, from the
      jurisdiction of any court from attachment prior to judgment, from attachment
      in
      aid of execution of judgment or from execution of judgment and to the extent
      that in any jurisdictions there may be attributed such an immunity (whether
      or
      not claimed), Seller hereby irrevocably agrees not to claim and hereby
      irrevocably waives such immunity in respect of suit, jurisdiction of any court,
      attachment prior to judgment, attachment in aid of execution of judgment and
      execution of judgment, and consents to the giving of any relief in any legal
      action, suit or proceeding by execution or any other form of process for the
      enforcement of any judgment against Seller or its properties or assets. The
      foregoing waiver and consent are intended to be effective to the fullest extent
      now or hereafter permitted by applicable law in any jurisdiction in which any
      suit, action or proceeding may be commenced with respect to this Agreement
      or
      any other Seller Document. Nothing expressed or implied in this Section
      14.5 is
      intended, nor shall be construed, to constitute an agreement respecting or
      an
      expressed or implied waiver by, Seller of any such claim of immunity (i) with
      respect to a claim or action brought by Buyer which is not with respect to
      any
      of (A) this Agreement, (B) any other Seller Document or (C) the transactions
      contemplated by this Agreement, regardless of what forum such claim or action
      is
      asserted, or (ii) with respect to any claim or action brought by a party who
      is
      not a party to this Agreement, regardless of what forum such
      claim or action is asserted. The parties do not intend to grant, either
      expressly or by implication, nor shall this Section
      14.5 be
      construed to confer, any rights on any parties not a party hereto.




54


ARTICLE
      XV




EXPENSES;
      CONFIDENTIALITY




15.1  Expenses . Except
      as otherwise expressly set forth herein, each party shall bear their own direct
      and indirect expenses incurred in connection with the negotiation and
      preparation of this Agreement, the other Seller Documents and Buyer Documents
      and the consummation and performance of the transactions contemplated herein
      and
      therein. Seller
      and Buyer shall each be responsible for one-half of the Escrow
      costs.




15.2  Confidentiality .
      Except
      in connection with any dispute between the parties and subject to any obligation
      to comply with (i) any Law, (ii) any rule or regulation of any
      Authority or securities exchange or (iii) any subpoena or other legal
      process to make information available to the Persons entitled thereto, whether
      or not the transactions contemplated herein shall be concluded, all information
      obtained by Seller or any Shareholder, on the one hand, or Buyer, on the other
      hand, about the other, and all of the terms and conditions of this Agreement,
      shall, for a period of five (5) years after the date of this Agreement, be
      kept
      in confidence by each party, and each party shall cause its shareholders,
      members, partners, directors, officers, managers, employees, agents and
      attorneys to hold such information confidential. Such confidentiality shall
      be
      maintained to the same degree as such party maintains its own confidential
      information and shall be maintained until such time, if any, as any such data
      or
      information either is, or becomes, published or a matter of public knowledge;
      provided, however, that the foregoing shall not apply to any information
      obtained by Buyer through its own independent investigations of Seller or
      received by Buyer from a source not known by Buyer to be bound by a
      confidentiality agreement with, or other contractual, legal or fiduciary
      obligation of confidentiality to, Seller nor to any information obtained by
      Buyer which is generally known to others engaged in the trade or business of
      Seller; and provided, further, that from and after the Closing, Buyer shall
      be
      under no obligation to maintain confidential any such information concerning
      Seller. In the event either party becomes legally compelled to disclose any
      such
      information, it shall promptly provide the other with written notice of such
      requirement so that the other may seek a protective order or other remedy.
      If
      this Agreement shall be terminated for any reason, each party shall return
      or
      cause to be returned to the other all written data, information, files, records
      and copies of documents, worksheets and other materials obtained by such party
      in connection with this Agreement.  The
      provisions of this Section
      15.2 shall
      survive the Closing and continue indefinitely thereafter.




55


15.3  Publicity . Up to
      (and including) the Closing Date, no publicity release or announcement
      concerning this Agreement or the transactions contemplated herein shall be
      issued without advance written approval of the form and substance thereof by
      Buyer and Seller; provided, however, that such restrictions shall not apply
      to
      any disclosure required by Authorities, Applicable Law or the rules of any
      securities exchange which may be applicable (except
      that each of Buyer and CVF shall provide to the other draft of any release
      or
      announcement at least one (1) calendar day prior to making such release or
      announcement). For a period of ten (10) days after the Closing Date, the parties
      shall consult with each other before issuing any press release or public
      statement with respect to this Agreement or the transactions contemplated
      herein, and, except as may be required by Applicable Law or the rules of any
      securities exchange which may be applicable (except that each of Buyer and
      CVF
      shall provide to the other draft of any release or announcement at least one
      (1)
      calendar day prior to making such release or announcement), will not issue
      any
      such press release or public statement prior to such consultation. Neither
      Seller nor any officer, employee, director, stockholder or other representative
      thereof shall, at any time from and after the Closing, issue any press release
      or make any public statement that is critical, disparaging or otherwise could
      reasonably be interpreted as being negative with respect to Buyer or any of
      its
      Affiliates or their respective businesses, financial condition, directors,
      officers, managers or employees.




ARTICLE
      XVI




NOTICES




16.1  Notices . All
      notices, requests and other communications hereunder shall be in writing and
      shall be delivered by courier or other means of personal service (including
      by
      means of a nationally recognized courier service or a professional messenger
      service), or sent by or telecopy or mailed first class, postage prepaid, by
      overnight mail by a nationally recognized service, in all cases, addressed
      to:




If
      to
      Buyer, to:  Collectors
      Universe, Inc.




P.O.
      Box
      6280


Newport
      Beach, California 92658


Facsimile:
      (949) 567-1140




Attention:  Chief
      Executive Officer




with
      a
      copy to:  Loeb
      & Loeb LLP


10100
      Santa Monica Blvd., Suite 2200


Los
      Angeles, California 90067


Facsimile:
      (310) 282-2200




Attention:
      Christopher J. Kelly, Esq.






56


If
      to
      Seller, to:  Gemprint
      Corporation




c/o
      CVF
      Technologies Corporation


8604
      Main
      Street, Suite I


Williamsville,
      NY 14221


Facsimile:
      (716) 565-4717


Attention:
      Jeff Dreben


with
      a
      copy to:  McCarter
      Grespan Robson Beynon Thompson LLP


675
      Riverbend Drive


Kitchener,
      Ontario,


Canada
      N2K 353


Facsimile:  (519)
      742-1841


Attention:
      Paul E. Grespan, Esq.




If
      to
      CVF:  CVF
      Technologies Corporation


8604
      Main
      Street, Suite I


Williamsville,
      NY 14221


Facsimile:
      (716) 565-4717


Attention:
      Jeff Dreben




If
      to
      Heptagon:  Heptagon
      Investments Ltd.


c/o
      MC-Patrimoine SA


5
      Rue
      Cesar Soulie, 1260 Nyon


Switzerland


Facsimile:
      (41) 22-362-6782




If
      to the
      Shepherd Group:  1456733
      Ontario, Inc.


144
      Front
      Street West, Suite 400


Toronto,
      Ontario, Canada M5J 2L7


Facsimile:
      (416) 599-7800


Attention:
      John Shepherd




All
      notices, requests and other communications shall be deemed given on the date
      of
      actual receipt or delivery as evidenced by written receipt, acknowledgement
      or
      other evidence of actual receipt or delivery to the address specified above.
      In
      case of service by telecopy, a copy of such notice shall be personally delivered
      or sent by overnight mail, in the manner set forth above, within three
      (3) Business Days thereafter. Either party hereto may from time to time by
      notice in writing served as set forth above designate a different address or
      a
      different or additional person to which all such notices or communications
      thereafter are to be given.




ARTICLE
      XVII




MISCELLANEOUS




17.1  Further
      Assurances . Each of
      the parties shall use its reasonable and diligent best efforts to proceed
      promptly with the transactions contemplated herein, to fulfill the conditions
      precedent for such party’s benefit or to cause the same to be fulfilled and to
      execute such further documents and other papers and perform such further acts
      as
      may be reasonably required or desirable to carry out the provisions hereof
      and
      the transactions contemplated herein.




57


17.2  Modifications
      and Amendments; Waivers and Consents . At any
      time prior to the Closing Date or termination of this Agreement, Buyer, on
      the
      one hand, and Seller, on the other hand, may, by written agreement:




(a)  extend
      the time for the performance of any of the obligations or other acts of the
      other party hereto;




(b)  waive
      any
      inaccuracies in the representations and warranties made by the other party
      contained in this Agreement or any other agreement or document delivered
      pursuant to this Agreement; and




(c)  waive
      compliance with any of the covenants or agreements of the other party contained
      in this Agreement. However, no such waiver shall operate as a waiver of, or
      estoppel with respect to, any subsequent or other failure. Whenever this
      Agreement requires or permits a waiver or consent by or on behalf of any party
      hereto, such waiver or consent shall be given in writing.




17.3  Entire
      Agreement . This
      Agreement (including the Exhibits hereto and Schedules) and the agreements,
      documents and instruments to be executed and delivered pursuant hereto or
      referred to herein are intended to embody the final, complete and exclusive
      agreement among the parties with respect to the purchase of the Purchased Assets
      and related transactions; are intended to supersede all prior agreements,
      understandings and representations written or oral, with respect thereto; and
      may not be contradicted by evidence of any such prior or contemporaneous
      agreement, understanding or representation, whether written or
      oral.




17.4  Governing
      Law and Venue .
      This
      Agreement is to be governed by and construed in accordance with the laws of
      the
      State of Delaware applicable to contracts made and to be performed wholly within
      such State, and without regard to the conflicts of laws principles thereof.
      Any
      suit brought hereon, whether in contract, tort, equity or otherwise, shall
      be
      brought in the state or federal courts sitting in New York County, New York,
      the
      parties hereto hereby waiving any claim or defense that such forum is not
      convenient or proper. Each party hereby agrees that any such court shall have
      in
      personam jurisdiction over it, consents to service of process in any manner
      prescribed in ARTICLE
      XVI or in
      any other manner authorized by New York law, and agrees that a final judgment
      in
      any such action or proceeding shall be conclusive and may be enforced in other
      jurisdictions by suit on the judgment or in any other manner specified by
      law.




17.5  Binding
      Effect . This
      Agreement and the rights, covenants, conditions and obligations of the
      respective parties hereto and any instrument or agreement executed pursuant
      hereto shall be binding upon the parties and their respective successors,
      assigns and legal representatives. Neither this Agreement, nor any rights or
      obligations of any party hereunder, may be assigned by a party without the
      prior
      written consent of the other party; provided, however, that prior to or
      following the Closing, this Agreement and any rights and obligations of Buyer
      hereunder, and under any Buyer Documents may, without the prior written consent
      of Seller, be assigned and delegated by Buyer to any Person affiliated with
      Buyer or pledged or hypothecated
      to any lender(s) of Buyer or any such Affiliate, and following the Closing,
      this
      Agreement and any rights and obligations of Buyer hereunder and under any Buyer
      Documents may also be assigned and delegated by Buyer, without the prior written
      consent of Seller, to any successor-in-interest of Buyer to the Business or
      the
      Purchased Assets or to a substantial portion thereof; provided, however, that
      no
      delegation by Buyer of any such obligation shall relieve Buyer of liability
      therefor.




58


17.6  Counterparts/Facsimile
      Signatures . This
      Agreement may be executed simultaneously in any number of counterparts and
      by
      facsimile signatures, each of which shall be deemed an original but all of
      which
      together shall constitute one and the same instrument. In making proof of this
      Agreement it shall not be necessary to produce or account for more than one
      counterpart.




17.7  Section
      Headings . The
      section headings of this Agreement are for convenience of reference only and
      shall not be deemed to alter or affect any provision hereof.




17.8  Currency . All
      payments required to be made pursuant to this Agreement, including, without
      limitation, all amounts which in the aggregate comprise the Purchase Price
      and
      adjustments thereto made subsequent to the Closing, and amounts required to
      be
      paid in accordance with any indemnity provisions of this Agreement, shall be
      made in United States dollars.




17.9  Severability . In the
      event that any provision or any part of any provision of this Agreement shall
      be
      void or unenforceable for any reason whatsoever, then such provision shall
      be
      stricken and of no force and effect. However, unless such stricken provision
      goes to the essence of the consideration bargained for by a party, the remaining
      provisions of this Agreement shall continue in full force and effect, and to
      the
      extent required, shall be modified to preserve their validity.




17.10  No
      Third Party Rights . Nothing
      in this Agreement, whether express or implied, is intended to confer any rights
      or remedies under or by reason of this Agreement on any Persons other than
      the
      parties to it and their respective successors and assigns, nor is anything
      in
      this Agreement intended to relieve or discharge the obligation or liability
      of
      any third Persons to any party to this Agreement, nor shall any provision give
      any third Persons any right of subrogation or action over against any party
      to
      this Agreement.




17.11  Construction . The
      language in all parts of this Agreement shall in all cases be construed simply,
      according to its fair meaning, and not strictly for or against any of the
      parties hereto. Without limitation, there shall be no presumption against any
      party on the ground that such party was responsible for drafting this Agreement
      or any part thereof.




17.12  Time .
      Time
      shall be of the essence hereof.




59


17.13  No
      Contra Proferentem .
      The
      parties acknowledge and agree that they have each had ample time and opportunity
      to obtain legal and other professional advice which may deem necessary or
      desirable with respect to this Agreement and the transactions contemplated
      hereunder and that in continuing any provision in this Agreement or any document
      contemplated hereby, the legal principle of “contra proferentem” shall not apply
      or be applied.




**[signatures
      on following page]**







60


IN
      WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
      the
      day and year first above written.




COLLECTORS
      UNIVERSE, INC.




a
      Delaware corporation




By:


Its:




GEMPRINT
      CORPORATION




a
      Canadian corporation




By:


Its:









CVF
      TECHNOLOGIES CORPORATION




a
      Nevada
      corporation




By:


Its:









HEPTAGON
      INVESTMENTS LTD.




a
      British
      Virgin Islands corporation




By:


Its:









1456733
      ONTARIO, INC.




an
      Ontario, Canada corporation




By:


Its:












S-1




ANNEX
      I







Shareholder
            Shares
                of Capital Stock
            Indemnity
                PercentageCVF
            31,536,066
                shares of “Class A Stock”
            93.6%Heptagon
            2,162,974
                shares of “Class A Stock”
            6.4%Shepherd
                Group
            5,614,743
                shares of “Class A Stock”
            0
                %
















A-1