Document:

PURCHASE
AGREEMENT

     

    This
Purchase Agreement is dated as of January 14, 2009, by and among Maiden Capital
Financing Trust, a Delaware statutory trust (the “Trust”), Maiden Holdings North
America, Ltd., a Delaware corporation (“Maiden NA”), Maiden Holdings, Ltd., a
company organized under the laws of Bermuda (“Maiden BDA”) and each purchaser
identified on the signature pages hereto (each, including its successors and
assigns, a “Purchaser” and collectively the “Purchasers”).

     

    WHEREAS,
subject to the terms and conditions set forth in this Agreement and pursuant to
Section 4(2) of the Securities Act of 1933, as amended (the “Securities
Act”), and Rule 506 promulgated thereunder, the Trust and Maiden BDA
(collectively, the “Issuers”, and, each individually an Issuer”) desire to issue
and sell to each Purchaser, and each Purchaser, severally and not jointly,
desires to purchase from the Issuers, securities of the Issuers as more fully
described in this Agreement.

     

    WHEREAS,
(a) the Purchasers desire to purchase and the Trust desires to sell, upon the
terms and conditions stated in this Agreement, 260,000 Capital Securities (as
defined below), and (b) the Purchasers desire to purchase and Maiden BDA desires
to sell 11,700,000 common shares, par value $0.01 per share, of Maiden BDA (the
“Common Shares”).

     

    WHEREAS,
the Placement Agent is expected to act as placement agent with respect to the
Investment Units on behalf of the Issuers other than with respect to sales of
Investment Units to the Founders.

     

    WHEREAS,
concurrent with the execution of this Agreement, the Placement Agent is entering
into a Subscription Escrow Agreement (the “Escrow Agreement”) with Wilmington
Trust Company (the “Escrow Agent”), pursuant to which the Escrow Agent will
receive, deposit and hold in a segregated account all funds wired into the
escrow account from the Purchasers (other than the Founders) received in
connection with the sale of the Investment Units until such time as such funds
are to be released to the Issuers or returned to such Purchasers, in accordance
with the terms and conditions of the Escrow Agreement.

     

    NOW,
THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement,
and for other good and valuable consideration the receipt and adequacy of which
are hereby acknowledged, Maiden BDA, Maiden NA, the Trust and each Purchaser
agree as follows:

     

    ARTICLE
I.

     

    DEFINITIONS

     

    1.1           Definitions.  In
addition to the terms defined elsewhere in this Agreement, for all purposes of
this Agreement, the following terms have the meanings set forth in this
Section 1.1:

     

    “Administrators”
means Arturo M. Raschbaum, John M. Marshaleck and Karen L. Schmitt.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    “Affiliate”
means any Person that, directly or indirectly through one or more
intermediaries, controls or is controlled by or is under common control with a
Person as such terms are used in and construed under Rule 144 under the
Securities Act.  With respect to a Purchaser, any investment fund or
managed account that is managed on a discretionary basis by the same investment
manager as such Purchaser will be deemed to be an Affiliate of such
Purchaser.

     

    “Agreement”
means this Purchase Agreement among the parties hereto (including any exhibits
and schedules hereto and the Disclosure Schedules) and all amendments hereto
made in accordance with the provisions of Section 5.5.

     

    “Capital
Securities” shall mean the Fixed Rate Capital Securities of the Trust issued
pursuant to the Declaration of Trust.

     

    “Closing”
shall have the meaning ascribed to such term in
Section 2.1(b).

     

    “Closing
Date” shall have the meaning ascribed to such term in
Section 2.1(b).

     

    “Commission”
means the Securities and Exchange Commission.

     

    “Common
Shares” shall have the meaning ascribed to such term in the
Recitals.

     

    “Company
Counsel” means Edwards Angell Palmer & Dodge LLP with offices located at 750
Lexington Avenue, New York, New York 10022.

     

    “Declaration
of Trust” means that certain Amended and Restated Declaration of Trust dated as
of January 20, 2009 by and among Wilmington Trust Company, as Institutional
Trustee and Delaware Trustee, Maiden NA, as Sponsor and the Administrators, as
Administrators.

     

    “Disclosure
Materials” means materials posted by Maiden BDA or its counsel to the Intralinks
datasite in connection with the offering of the Investment Units.

     

    “Disclosure
Schedules” means the Disclosure Schedules of Maiden BDA and Maiden NA delivered
concurrently herewith.

     

    "DTC"
shall have the meaning ascribed to such term in Section
2.2(a)(iii).

     

    “End of
Suspension Notice” shall have the meaning ascribed to such term in
Section 4.9(b).

     

    “Escrow
Agent” shall have the meaning ascribed to such term in the
Recitals.

     

    “Escrow
Agreement” shall have the meaning ascribed to such term in the
Recitals.

     

    “Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder.

     

    “Founders”
means George Karfunkel, Michael Karfunkel, any of their respective Affiliates
and any of their charitable or family trusts.

     

    
      
         

      

      
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    “GAAP”
means United States generally accepted accounting principles applied on a
consistent basis during the periods involved.

     

    “Governmental
Authority” shall have the meaning ascribed to such term in
Section 3.1(c).

     

    “Holders’
Counsel” shall have the meaning ascribed to such term in
Section 4.6(c)

     

    “Indenture”
means that certain Indenture dated as of January 20, 2009 between Maiden NA, as
Issuer, and Wilmington Trust Company , as Trustee.

     

    “Investment
Unit” means one Capital Security and 45 Common Shares.

     

    “Issuer(s)”
shall have the meaning ascribed to such term in the Recitals.

     

    “Law”
shall have the meaning ascribed to such term in
Section 3.1(c).

     

    “Lien” or
Liens” means a lien, charge, security interest, encumbrance, right of first
refusal, preemptive right or other restriction.

     

    “Losses”
shall have the meaning ascribed to such term in Section 4.5.

     

    “Maiden
BDA” shall have the meaning ascribed to such term in the Preamble.

     

    “Maiden
Company(ies)” shall have the meaning ascribed to such term in Section
3.1(a).

     

    “Maiden
Insurance” means Maiden Insurance Company, Ltd., a company organized under the
laws of Bermuda.

     

    “Maiden
NA” shall have the meaning ascribed to such term in the Preamble.

     

    “Material
Adverse Effect” means any circumstance, event, occurrence or development that,
individually or in the aggregate, would have or would reasonably be expected to
result in (i) a material adverse effect on the legality, validity or
enforceability of any Transaction Document, (ii) a material adverse effect
on the results of operations, assets, business or condition (financial or
otherwise) of Maiden BDA and its Subsidiaries, taken as a whole, or (iii) a
material adverse effect on the ability of Maiden BDA, Maiden NA or the Trust to
perform in any material respect on a timely basis its obligations under any
Transaction Document.

     

    “Parent
Guarantee” means that certain Guarantee Agreement dated as of January 20, 2009
by and between Maiden BDA and Wilmington Trust Company.

     

    “Person”
means an individual or corporation, partnership, trust, incorporated or
unincorporated association, joint venture, limited liability company, joint
stock company, government (or an agency or subdivision thereof) or other entity
of any kind.

     

    “Placement
Agent” means Friedman, Billings, Ramsey & Co., Inc.

     

    
      
         

      

      
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    “Proceeding”
means an action, claim, suit, investigation or proceeding (including, without
limitation, an investigation or partial proceeding, such as a deposition),
whether commenced or threatened.

     

    “Purchaser”
shall have the meaning ascribed to such term in the Preamble.

     

    “Purchaser
Party” shall have the meaning ascribed to such term in
Section 4.5.

     

    “Registrable
Securities” means all Common Shares issued pursuant hereto and any securities
which may be issued or issued or issuable in respect of Common Shares issued
pursuant hereto by way of share dividend or share split or in connection with a
combination of shares, recapitalization, reclassification, merger, amalgamation,
arrangement, consolidation or other reorganization of Maiden BDA.  As
to any particular securities constituting Registrable Securities, such
securities will cease to be Registrable Securities when (i) a registration
statement with respect to the sale by the holder thereof shall have been
declared effective under the Securities Act and such securities shall have been
disposed of in accordance with such registration statement, (ii) they have been
sold to the public pursuant to Rule 144 or Rule 145 or other exemption
from registration under the Securities Act, (iii) they have been acquired by
Maiden BDA or (iv) they are able to be sold by the Purchaser or transferee
holding such Registrable Securities without restriction as to volume or manner
of sale pursuant to Rule 144 under the Securities Act.

     

    “Registration
Expenses” shall have the meaning ascribed to such term in
Section 4.6(c)

     

    “Registration
Statement” means a registration statement meeting the requirements set forth in
Section 4.6 hereof and covering the resale by the Purchasers of all or part of
the Shares.

     

    “Rule 144”
means Rule 144 promulgated by the Commission pursuant to the Securities
Act, as such rule may be amended from time to time, or any similar rule or
regulation hereafter adopted by the Commission having substantially the same
effect as such rule.

     

    “Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder.

     

    “Shares”
means the Common Shares issued or issuable to each Purchaser pursuant to this
Agreement.

     

    “Short
Sales” means all “short sales” as defined in Rule 200 of
Regulation SHO under the Exchange Act (but shall not be deemed to include
the location and/or reservation of borrowable Common Shares).

     

    “Subscription
Amount” means, as to each Purchaser, the aggregate amount to be paid for Shares
purchased hereunder set forth opposite such Purchaser’s name on Exhibit A under
the heading “Subscription Amount,” in United States dollars and in immediately
available funds.

     

    “Subsidiary”
and collectively, “Subsidiaries” means a subsidiary of Maiden BDA.

     

    “Suspension
Event” shall have the meaning ascribed to such term in
Section 4.9(b).

     

    
      
         

      

      
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    “Suspension
Notice” shall have the meaning ascribed to such term in
Section 4.9(b).

     

    “Trading
Day” means a day on which the Common Shares are traded on a Trading
Market.

     

    “Trading
Market” means the following markets or exchanges on which the Common Shares are
listed or quoted for trading on the date in question:  the Nasdaq
Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, or
the New York Stock Exchange, and on the date hereof and the Closing Date shall
mean the Nasdaq Global Select Market.

     

    “Transaction
Document” and collectively, the “Transaction Documents” means this Agreement,
the Declaration of Trust, the Indenture, the Capital Securities Guarantee (as
defined in the Indenture) and the Parent Guarantee and any other documents or
agreements executed in connection with the transactions contemplated
hereunder.

     

    “Transfer
Agent” means American Stock Transfer & Trust Company and any successor
transfer agent of Maiden BDA.

     

    “Trust”
shall have the meaning ascribed to such term in the Preamble.

     

    “Trustee”
means Wilmington Trust Company.

     

    “U.S.”
means the United States of America.

     

    ARTICLE
II.

     

    PURCHASE
AND SALE

     

    2.1          Purchase and Sale of
Investment Units; Closings.

     

    (a)           Upon
the terms and subject to the conditions set forth herein, the Maiden BDA agrees
to sell the Common Shares included in each Investment Unit and the Trust agrees
to sell the Capital Securities included in each Investment Unit, and each
Purchaser, severally and not jointly, agrees to purchase, at a price of
$1,000.45 per Investment Unit, the Investment Units set forth opposite such
Purchaser’s name on Exhibit A.

     

    (b)           The
purchase and sale of the Investment Units shall take place at a closing (the
“Closing”) at the offices of counsel to Maiden BDA or such other location as
Maiden NA, Maiden BDA and the Placement Agent shall mutually agree at 10:00 a.m.
(Eastern time) on January 20, 2009 or such later date as shall be mutually
agreed to by Maiden NA, Maiden BDA and the Placement Agent (the “Closing
Date”).  At the Closing, each Issuer and each Purchaser shall deliver
the items set forth in Section 2.2.

     

    2.2          Deliveries.

     

    (a)           On
or prior to the Closing Date, the Issuers shall deliver or cause to be delivered
to each Purchaser the following:

     

    
      
         

      

      
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    (i)           
this Agreement duly executed by each Issuer and Maiden NA;

     

    (ii)           a
copy of the irrevocable instructions to the Transfer Agent instructing the
Transfer Agent to deliver, on an expedited basis, a certificate evidencing the
number of its Common Shares included in the Investment Units as set forth
opposite such Purchaser’s name on Exhibit A
hereto, registered in the name of such Purchaser; and

     

    (iii)           the
Capital Securities included in the Investment Units being purchased in the form
of one or more permanent global securities in definitive form by means of
deposit with the Trustee as custodian for the Depository Trust Company ("DTC"),
registered in the name of Cede & Co., as nominee for DTC, and bearing the
legends set forth in the Declaration of Trust and to be credited to the
Purchasers' accounts.

     

    (b)           On
or prior to the Closing Date, each Purchaser shall deliver or cause to be
delivered to the Issuers and Maiden NA this Agreement duly executed by such
Purchaser.

     

    (c)           On
or prior to the Closing Date, each Founder shall deliver or cause to be
delivered to the Trust such Founder’s Subscription Amount for the Investment
Units to be purchased as set forth on Exhibit A by
wire transfer to the Trust of $1,000 per Investment Unit to the Trust’s account
as specified in writing by the Trust and to Maiden BDA of $.45 per Investment
Unit to the Maiden
BDA’s account as specified in writing by Maiden BDA.  On or prior to
the Closing Date, each Purchaser who is not a Founder shall deliver or cause to
be delivered to the Escrow Agent (on behalf of the Issuers) such Purchaser’s
Subscription Amount for the Investment Units to be purchased as set forth on
Exhibit A by
wire transfer to the Escrow Agent of $1,000 per Investment Unit and $.45 per
Investment Unit to the escrow account specified in the Escrow
Agreement.

     

    2.3          Closing
Conditions.

     

    (a)           The
obligations of the Issuers hereunder with respect to the Closing as to a given
Purchaser are subject to the following conditions being met:

     

    (i)            
the representations and warranties of such Purchaser that are contained herein
and (A) that are qualified by materiality or Material Adverse Effect shall
be true when made and on the Closing Date, respectively, (except for
representations and warranties that speak as of a specific date which shall be
accurate as of such date), and (B) that are not qualified by materiality or
Material Adverse Effect shall be accurate in all material respects when made and
on the Closing Date, respectively, (except for representations and warranties
that speak as of a specific date which shall be accurate in all material
respects as of such date);

     

    (ii)           
all obligations, covenants and agreements of such Purchaser required to be
performed at or prior to the Closing Date shall have been
performed;

     

    (iii)           the
delivery by such Purchaser of the items set forth in Sections 2.2(b) and
(c) of this Agreement;

     

    (iv)           no
Law shall prohibit the consummation of the Closing;

     

    
      
         

      

      
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    (v)         
  the Declaration of Trust and the Indenture shall be in full force
and effect; and

     

    (vi)           contemporaneously
with the Closing the Trust shall purchase Debentures from Maiden NA with the
proceeds of the Subscription Amount received as of the Closing from such
Purchaser.

     

    (b)           The
respective obligations of each Purchaser hereunder with respect to the Closing
are subject to the following conditions being met:

     

    (i)            
the representations and warranties of Maiden BDA, Maiden NA and the Trust that
are contained herein and (A) that are qualified by materiality or Material
Adverse Effect shall be true when made and on the Closing Date, respectively
(except for representations and warranties that speak as of a specific date
which shall be accurate as of such date), and (B) that are not qualified by
materiality or Material Adverse Effect shall be accurate in all material
respects when made and on the Closing Date, respectively, (except for
representations and warranties that speak as of a specific date which shall be
accurate in all material respects as of such date);

     

    (ii)           
all obligations, covenants and agreements of Maiden BDA and Maiden NA required
to be performed at or prior to the Closing Date shall have been
performed;

     

    (iii)           the
Placement Agent and the Purchasers shall have received from each of Maiden BDA
and Maiden NA a certificate, dated as of the Closing Date and signed by its
Chief Executive Officer or its Chief Financial Officer, and from the Trust a
certificate, dated as of the Closing Date signed by an Administrator, certifying
to the fulfillment of the conditions specified in Sections 2.3(b)(i) and
(ii).

     

    (iv)           the
delivery by the Issuers of the items set forth in Section 2.2(a) of this
Agreement;

     

    (v)           
on or before the Closing Date, the Placement Agent and each Purchaser shall have
received (A) an opinion of Edwards Angell Palmer & Dodge LLP, counsel to
Maiden BDA, Maiden NA and the Trust, addressed to such Purchaser and the
Placement Agent in form and substance reasonably satisfactory to the Placement
Agent addressed to the Placement Agent as to United States federal, New York and
Delaware law, (B) an opinion of Conyers Dill & Pearman, counsel to Maiden
BDA, addressed to such Purchaser and the Placement Agent in form and substance
reasonably satisfactory to the Placement Agent as to Bermuda law, and (C) an
opinion of Richards Layton & Finger, P.A., counsel to Wilmington Trust
Company, addressed to such Purchaser and the Placement Agent in form and
substance reasonably satisfactory to the Placement Agent as to Delaware law, in
each case dated as of the Closing Date;

     

    (vi)           there
shall have been no Material Adverse Effect since the date hereof;

     

    (vii)          from
the date hereof through the Closing, (i) no suspension of the qualification of
the Common Shares for offering or sale in any jurisdiction, or of the initiation
or threatening of any Proceedings for any of such purposes, shall have occurred
and (ii) none of the Disclosure Materials shall contain an untrue statement of
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they are made, not misleading;

     

    
      
         

      

      
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    (viii)         no
Law shall prohibit the consummation of the Closing; and

     

    (ix)           On
or before the Closing, the Placement Agent shall have received the Transaction
Documents executed by each Issuer, Maiden NA, the Trustee, and the
Administrators, as applicable, and such agreements shall be in full force and
effect.

     

    For
purposes of Section 2.2 and this Section 2.3(b), a Purchaser shall be deemed to
have received any instrument or document (other than certificates evidencing the
Common Shares or the Capital Securities), if such instrument or document shall
have been sent via email in pdf format to such Purchaser to the email address
set forth on the signature page hereof.

     

    ARTICLE
III.

     

    REPRESENTATIONS
AND WARRANTIES

     

    3.1          Representations and
Warranties of the Maiden Companies.  Except as set forth in the
Disclosure Schedules, which Disclosure Schedules shall be deemed a part hereof
and shall qualify any representation otherwise made herein that it expressly
claims to qualify and any other representation or warranty to the extent that
the relevance of the disclosed matter to that representation or warranty is
readily apparent, Maiden BDA, Maiden NA and the Trust, jointly and severally,
hereby make the following representations and warranties to each Purchaser on
the date hereof and on the Closing Date:

     

    (a)           Organization and
Qualification.  Maiden BDA, Maiden NA, Maiden Insurance and the
Trust (each a “Maiden Company” and, collectively, the “Maiden Companies”) are
entities duly incorporated or otherwise organized, validly existing and in good
standing under the laws of the jurisdictions of their incorporation or
organization (as applicable), with the requisite powers and authority, including
all necessary governmental licenses, authorizations and permits, to own and use
their properties and assets and to carry on business as currently
conducted.  No Maiden Company is in violation or default of any of the
provisions of its respective certificate or articles of incorporation, bylaws,
declaration of trust or other organizational or charter
documents.  Each Maiden Company is duly qualified to conduct its
business and is in good standing as a foreign corporation or other entity in
each jurisdiction in which the nature of the business conducted or property
owned by it makes such qualification necessary, except where the failure to be
so qualified or in good standing, as the case may be, would not have or
reasonably be expected to result in a Material Adverse Effect and no Proceeding
has been instituted or, to the knowledge of Maiden
BDA or Maiden NA, has been threatened by any Governmental Authority, in
any such jurisdiction revoking, limiting or curtailing or seeking to revoke,
limit or curtail such power and authority or qualification.

     

    
      
         

      

      
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    (b)           Authorization;
Enforcement.  Each of Maiden BDA, Maiden NA and the Trust has
the requisite corporate or other power and authority to enter into and to
consummate the transactions contemplated by each of the Transaction Documents to
which it is a party and otherwise to carry out its obligations hereunder and
thereunder.  The execution and delivery of each of the Transaction
Documents by each of Maiden BDA, Maiden NA and the Trust to the extent it is a
party thereto and the consummation by it of the transactions contemplated hereby
and thereby have been duly authorized by all necessary action on the part of
Maiden BDA, Maiden NA and the Trust, as applicable, and no further action is
required by Maiden BDA, Maiden NA and the Trust, as applicable , its Board of
Directors, its stockholders, the Trustee or the Administrators in connection
therewith.  Each Transaction Document has been (or upon delivery will
have been) duly executed by each of Maiden BDA, Maiden NA and the Trust that is
a party thereto and, when executed and delivered in accordance with the terms
hereof and thereof, will constitute the valid and binding obligation of Maiden
BDA, Maiden NA and the Trust, as applicable, enforceable against Maiden BDA,
Maiden NA and the Trust, as applicable, in accordance with its terms except
(i) as limited by general equitable principles and applicable bankruptcy,
insolvency, reorganization, moratorium and other laws of general application
affecting enforcement of creditors’ rights generally, (ii) as limited by
laws relating to the availability of specific performance, injunctive relief or
other equitable remedies and (iii) insofar as indemnification and
contribution provisions may be limited by applicable law.

     

    (c)           No
Conflicts.  The execution, delivery and performance of the
Transaction Documents by each of Maiden BDA, Maiden NA and the Trust, the
issuance and sale of the Investment Units and the consummation by Maiden BDA,
Maiden NA and the Trust of the other transactions contemplated hereby and
thereby do not and will not (i) conflict with or violate any provision of
any Maiden Company’s certificate or articles of incorporation, bylaws,
declaration of trust or other organizational or charter documents, or
(ii) require any consent or other action by any Person under, conflict
with, or constitute a default (or an event that with notice or lapse of time or
both would become a default) under, result in the creation of any Lien upon any
of the properties or assets of any Maiden Company, or give to others any rights
of termination, amendment, acceleration or cancellation (with or without notice,
lapse of time or both) of, any agreement, credit facility, debt or other
instrument or other understanding to which any Maiden Company is a party or by
which any property or asset of any Maiden Company is bound or affected, or
(iii)  conflict with or result in a violation of any law, rule, regulation,
permit, license, order, judgment, injunction, decree or other restriction (a
“Law”) of any
court or governmental, administrative, regulatory or Trading Market authority to
which any Maiden Company is subject (each a “Governmental
Authority”) (including federal and state securities laws and
regulations), or by which any property or asset of any Maiden Company is bound
or affected; except in the case of each of clauses (ii) and (iii), such as
would not have or reasonably be expected to result in a Material Adverse
Effect.

     

    (d)           Filings, Consents and
Approvals.  Assuming the accuracy of the Purchasers’
representations and warranties set forth in Section 3.2, neither Issuer not
required to obtain any consent, waiver, authorization or order of, give any
notice to, or make any filing or registration with, any Governmental Authority
or other Person in connection with the execution, delivery and performance by
any of Maiden BDA, Maiden NA and the Trust of the Transaction Documents to which
it is a party, other than (i) the filing of a Form D with the Commission or
state securities (including insurance securities) or “Blue Sky” authorities and
(ii) the filings contemplated by Section 4.6 or 4.7.

     

    
      
         

      

      
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    (e)           Issuance of the Investment
Units.

     

    (i)           The
Common Shares included in the Investment Units have been duly authorized for
issuance, sale and delivery pursuant to this Agreement and, when issued and
delivered by Maiden BDA against payment therefor in accordance with the terms of
this Agreement, will be duly and validly issued and fully paid and
nonassessable, free and clear of any pledge, Lien, encumbrance, security
interest or other claim except for any such pledge, Lien, encumbrance, security
interest or other claim resulting solely from the actions of the Placement Agent
or the Purchasers, and the issuance, sale and delivery of such Common Shares by
Maiden BDA are not subject to any preemptive right, co-sale right, registration
right, right of first refusal or other similar right of shareholders arising by
operation of law, under the charter or bye-laws of Maiden BDA, under any
agreement to which Maiden BDA is a party or otherwise.

     

    (ii)           The
Capital Securities included in the Investment Units have been duly authorized
for issuance, sale and delivery pursuant to this Agreement and the Declaration
of Trust and, when issued and delivered by the Trust against payment therefor in
accordance with the terms of this Agreement, will be duly and validly issued and
fully paid and nonassessable, free and clear of any pledge, Lien, encumbrance,
security interest or other claim except for any such pledge, Lien, encumbrance,
security interest or other claim resulting solely from the actions of the
Placement Agent or the Purchasers, and the issuance, sale and delivery of such
Capital Securities by the Trust are not subject to any preemptive right, co-sale
right, registration right, right of first refusal or other similar right of
shareholders arising by operation of law, under the Declaration of Trust, under
any agreement to which the Trust is a party or otherwise.

     

    (f)           Qualifications.  Each
Maiden Company is duly qualified or licensed by, and is in good standing in,
each jurisdiction in which it conducts its business, or in which it owns or
leases property or maintains an office and in which such qualification or
licensing is necessary and in which the failure, individually or in the
aggregate, to be so qualified or licensed would reasonably be expected to have a
Material Adverse Effect.

     

    (g)           Capitalization of Maiden
BDA.  The authorized capital stock of Maiden BDA consists of
100,000,000 Common Shares and, as of the date of this Agreement, there were
58,587,664 Common Shares outstanding, 4,050,000 Common Shares reserved for
issuance on the exercise of outstanding warrants, 1,519,834 Common Shares
reserved for issuance on exercise of outstanding options and 1,280,166 Common
Shares reserved for issuance under employee stock or other equity
plans.  All of the issued and outstanding Common Shares have been, and
all Common Shares that may be issued pursuant to outstanding warrants and stock
options will be, when issued in accordance with the respective terms thereof,
duly authorized and validly issued and are fully paid and nonassessable, and
have not been, or will not be, issued in violation of or subject to any
preemptive right or other similar right of shareholders arising by operation of
law, under the certificate of incorporation or bye-laws of Maiden BDA, under any
agreement to which Maiden BDA is a party or otherwise.  Except as set
forth in this Section 3.1(g), there are no outstanding (i) securities or
obligations of Maiden BDA convertible into or exchangeable for any capital stock
of Maiden BDA, (ii) warrants, rights or options to subscribe for or purchase
from Maiden BDA any such capital stock or any such convertible or exchangeable
securities or obligations or (iii) obligations of Maiden BDA to issue or sell
any shares of capital stock, any such convertible or exchangeable securities or
obligation, or any such warrants, rights or options.

     

    
      
         

      

      
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    (h)          Permits.  Each
Maiden Company has all necessary licenses, permits, certificates,
authorizations, consents and approvals and has made all necessary filings
required under any federal, state, local or foreign Law, regulation or rule, and
has obtained all necessary licenses, permits, certificates, authorizations,
consents and approvals from other persons required in order to conduct its
respective business, except to the extent that any failure to have any such
licenses, permits, certificates, authorizations, consents or approvals, to make
any such filings or to obtain any such licenses, permits, certificates,
authorizations, consents or approvals would not, individually and in the
aggregate, have a Material Adverse Effect; no Maiden Company is in violation of,
or in default under, any such license, permit, certificate, authorization,
consent or approval or any federal, state, local or foreign law, regulation or
rule or any decree, order or judgment applicable to such Maiden Company, the
effect of which would reasonably be expected to have a Material Adverse
Effect.

     

    (i)           Proceedings.  There
are no material actions, suits, proceedings, inquiries or investigations pending
or, to the knowledge of any of Maiden BDA, Maiden NA and the Trust, threatened
against any Maiden Company, or any of their respective properties at Law or in
equity, or before or by any Governmental Authority.

     

    (j)           Material
Events.  Except as disclosed by Maiden BDA in filings and
reports pursuant to the Exchange Act and Securities Act, since September 30,
2008, there has not been any event, circumstance or change that has, or would
reasonably be expected to have, a Material Adverse Effect.

     

    (k)          Finder’s
Fees.  Except for a placement fee owed to the Placement Agent,
none of the Maiden Companies has incurred any liability for any finder’s fees or
similar payments in connection with the transactions contemplated
hereby.

     

    (l)           Private
Placement.  Assuming the accuracy of the Purchasers’
representations and warranties set forth in Section 3.2, the Investment
Units will be issued and sold pursuant to the registration exemption provided by
Rule 506 of Regulation D and Section 4(2) of the Securities Act as a transaction
not involving a public offering and the requirements of any other applicable
state securities (including insurance securities) or “Blue Sky”
laws.  The issuance and sale of the Shares hereunder do not contravene
the rules and regulations of the Trading Market.

     

    (m)         Investment
Company.  Neither Issuer is, and immediately after receipt of
payment for the Investment Units, will not be, an “investment company” or an
entity “controlled” by an “investment company” within the meaning of the
Investment Company Act of 1940, as amended.

     

    (n)         Disclosure
Materials.  The Disclosure Materials are true and correct and
do not contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements made therein, in light
of the circumstances under which they were made, not misleading.

     

    
      
         

      

      
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    (o)          Tax
Status.  Except for matters that would not, individually or in
the aggregate, have or reasonably be expected to result in a Material Adverse
Effect, (i) each Maiden Company has accurately and timely filed all
federal, state and foreign income and franchise tax returns, reports and
declarations required by any jurisdiction to which it is subject, (ii) each
Maiden Company has paid or accrued all taxes shown as due thereon, or, where
payment is not due yet, has established in accordance with GAAP an adequate
accrual for all material taxes through the end of the last period for which such
Maiden Company ordinarily records items in its books and (iii) there is no
tax deficiency in any material amount which has been asserted or threatened
against any Maiden Company.

     

    (p)          Regulation M
Compliance.  Maiden BDA has not, and to its knowledge no one
acting on its behalf has, (i) taken, directly or indirectly, any action
designed to cause or to result in the stabilization or manipulation of the price
of any security of Maiden BDA to facilitate the sale or resale of any of the
Common Shares, (ii) sold, bid for, purchased, or, paid any compensation for
soliciting purchases of, any of the Common Shares, or (iii) paid or agreed
to pay to any Person any compensation for soliciting another to purchase any
other securities of Maiden BDA, other than, in the case of clauses (ii) and
(iii), compensation paid to the Placement Agent in connection with the placement
of the Common Shares.

     

    (q)          Registration of Common
Shares.  The Common Shares are registered pursuant to Section
12(b) of the Exchange Act and listed for trading on the Trading Market, and
Maiden BDA has taken no action designed to, or which to its knowledge is likely
to have the effect of, terminating the registration of the Common Shares under
the Exchange Act or the listing of the Common Shares on the Trading Market, nor
has the Company received any notification that the Commission or the Trading
Market is contemplating terminating any such registration or
listing.

     

    (r)          Treatment of
Purchasers.  Each Purchaser will purchase Investment Units on
the same terms and conditions.  No Issuer has paid, or agreed to pay,
to any Affiliate of such Issuer any fee or has entered into any agreement with
any such Affiliate that has not been entered into with each Purchaser, in any
case in connection with the offering of Investment Units contemplated
hereby.

     

    3.2          Representations and
Warranties of the Purchasers.  Each Purchaser, for itself and
for no other Purchaser, hereby represents and warrants as of the date hereof and
as of the Closing Date to Maiden BDA, Maiden NA and the Trust as
follows:

     

    (a)          Organization;
Authority.  Such Purchaser is an entity duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization with full right, corporate or partnership power and authority to
enter into and to consummate the transactions contemplated by the Transaction
Documents and otherwise to carry out its obligations hereunder and
thereunder.  The execution, delivery and performance by such Purchaser
of the transactions contemplated by this Agreement have been duly authorized by
all necessary corporate or similar action on the part of such
Purchaser.  Each Transaction Document to which it is a party has been
duly executed by such Purchaser, and when delivered by such Purchaser in
accordance with the terms hereof, will constitute the valid and legally binding
obligation of such Purchaser, enforceable against it in accordance with its
terms, except in relation to enforceability (i) as limited by general
equitable principles and applicable bankruptcy, insolvency, reorganization,
moratorium and other laws of general application affecting enforcement of
creditors’ rights generally, (ii) as limited by laws relating to the
availability of specific performance, injunctive relief or other equitable
remedies and (iii) insofar as indemnification and contribution provisions
may be limited by applicable law.

     

    
      
         

      

      
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    (b)          Own
Account.  Such Purchaser understands that the Investment Units
are “restricted securities” and have not been registered under the Securities
Act or any applicable state or other securities law and is acquiring the
Investment Units as principal for its own account and not with a view to or for
distributing or reselling such Investment Units or any part thereof in violation
of the Securities Act or any applicable state or other securities law, has no
present intention of distributing any of such Investment Units in violation of
the Securities Act or any applicable state or other securities law and has no
direct or indirect arrangement or understandings with any other persons to
distribute or regarding the distribution of such Investment Units in violation
of the Securities Act or any applicable state or other securities
law.  Such Purchaser is acquiring the Investment Units hereunder in
the ordinary course of its business.

     

    (c)          Purchaser
Status.  At the time such Purchaser was offered the Investment
Units, it was, and at the date hereof it is, either:  (i) an
“accredited investor” as defined in Rule 501(a) under the Securities Act or
(ii) a “qualified institutional buyer” as defined in Rule 144A(a)
under the Securities Act.  No Purchaser is required to be registered
as a broker-dealer under Section 15 of the Exchange Act.

     

    (d)          Experience of Such
Purchaser.  Such Purchaser, either alone or together with its
representatives, has such knowledge, sophistication and experience in business
and financial matters so as to be capable of evaluating the merits and risks of
the prospective investment in the Investment Units, and has so evaluated the
merits and risks of such investment.  Such Purchaser is able to bear
the economic risk of an investment in the Investment Units and, at the present
time, is able to afford a complete loss of such investment.

     

    (e)          General
Solicitation.  Such Purchaser is not purchasing the Investment
Units as a result of any advertisement, article, notice or other communication
regarding the Investment Units published in any newspaper, magazine or similar
media or broadcast over television or radio or presented at any seminar or any
other general solicitation or general advertisement.

     

    (f)           Short Sales and
Confidentiality Prior to the Date Hereof.  Other than the
transaction contemplated hereunder, such Purchaser has not, nor has any Person
acting on behalf of or pursuant to any understanding with such Purchaser,
directly or indirectly executed any transaction, including Short Sales, in the
securities of Maiden BDA during the period commencing from the time that such
Purchaser first received a term sheet (written or oral) from Maiden NA, Maiden
BDA or any other Person setting forth the material terms of the transactions
contemplated hereunder until the date hereof.  Other than to other
Persons party to this Agreement, such Purchaser has maintained the
confidentiality of all disclosures made to it in connection with this
transaction (including the existence and terms of this
transaction).

     

    
      
         

      

      
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    (g)         Filings, Consents and
Approvals.  The Purchaser is not required to obtain any
consent, waiver, authorization or order of, give any notice to, or make any
filing or registration with, any court or other Governmental Authority or other
Person in connection with the execution, delivery and performance by the
Purchaser of the Transaction Documents, other than any filings required pursuant
to Section 13 or Section 16 of the Exchange Act.

     

    (h)         Provision of
Information.  Such Purchaser has been afforded (i) the
opportunity to ask such questions as it has deemed necessary of, and to receive
answers from, representatives of Maiden BDA and Maiden NA concerning the terms
and conditions of the Investment Units and the finances, operations and business
of Maiden BDA and Maiden NA; and (ii) the opportunity to request such
additional information which Maiden BDA or Maiden NA possesses or can acquire
without unreasonable effort or expense.

     

    (i)           No Public
Market.  Such Purchaser understands that no public market
exists for the Capital Securities and that it is unlikely that a public market
will ever exist for the Capital Securities.

     

    (j)           Certain
Fees.  No brokerage or finder’s fees or commissions are or will
be payable by such Purchaser to any broker, financial advisor or consultant,
finder, placement agent, investment banker, bank or other Person with respect to
the transactions contemplated by the Transaction Documents.

     

    (k)          Acknowledgement.  Each
Purchaser acknowledges that the Issuers have relied upon the representations and
warranties of the Purchasers set forth in Section 3.2 in its determination
that no registration under the Securities Act is required for the offer and sale
of the Investment Units by the Issuers to the Purchasers as contemplated by this
Agreement.

     

    ARTICLE
IV.

     

    OTHER
AGREEMENTS OF THE PARTIES

     

    4.1          Transfer
Restrictions.

     

    (a)        
 Each of the Purchasers agrees that its Investment Units may only be
disposed of in compliance with state and federal securities laws.  In
connection with any transfer of Capital Securities or Common Shares, other than
pursuant to an effective registration statement or Rule 144, to the
applicable Issuer or to an Affiliate of a Purchaser, the applicable Issuer may
require the transferor thereof to provide to the applicable Issuer an opinion of
counsel selected by the transferor and reasonably acceptable to such Issuer, the
form and substance of which opinion shall be reasonably satisfactory to such
Issuer, to the effect that such transfer does not require registration of such
transferred Capital Securities or Common Shares under the Securities
Act.  As a condition of transfer, other than pursuant to an effective
Registration Statement or Rule 144, any such transferee shall agree in
writing to be bound by the terms of this Agreement and shall have the rights of
a Purchaser under this Agreement.

     

    (b)         Each
Purchaser agrees to the imprinting, so long as is required by this
Section 4.1, of a legend on any of its Common Shares in the following
form:

     

    
      
         

      

      
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    THESE
SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION
OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO
SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO MAIDEN
HOLDINGS, LTD.

     

    (c)      
   Certificates evidencing the Common Shares shall not contain
any legend (including the legend set forth in Section 4.1(b)),
(i) following any sale of such Common Shares pursuant to Rule 144,
(ii) if such Common Shares are eligible for sale under
Rule 144(b)(1)(i), or (iii) if such legend is not required under
applicable requirements of the Securities Act (including judicial
interpretations and pronouncements issued by the staff of the
Commission).  Maiden BDA agrees that at such time as such legend is no
longer required under this Section 4.1(c), it will promptly following the
delivery by a Purchaser to Maiden BDA or the Transfer Agent of a certificate
representing Common Shares issued with a restrictive legend, deliver or cause to
be delivered to such Purchaser a certificate representing such Common Shares
that is free from all restrictive and other legends.  Notwithstanding
the foregoing, Maiden BDA shall not be required to remove any legends until all
Common Shares represented by a single certificate are no longer subject to
restrictions.  If only a portion of the Common Shares represented by
any single certificate is subject to restrictions, the holder of the certificate
may request, or Maiden BDA may require, that such certificate be cancelled and
two new certificates be issued.  One certificate shall represent, and
be in the amount of, Common Shares not subject to restrictions and shall bear no
legend and the second certificate shall represent, and be in the amount of,
Common Shares subject to restrictions and shall bear an appropriate
legend.  Certificates for Common Shares subject to legend removal
hereunder shall be transmitted by the Transfer Agent to the Purchasers by
crediting the account of the Purchaser’s prime broker or custodian bank with the
Depository Trust Company system.

     

    (d)          Each
Purchaser, severally and not jointly with the other Purchasers, agrees that the
removal of the restrictive legend from certificates representing Common Shares
as set forth in this Section 4.1 is predicated upon Maiden BDA’s reliance
that such Purchaser will sell any Common Shares pursuant to either the
registration requirements of the Securities Act, including any applicable
prospectus delivery requirements, or an exemption therefrom, and that if Shares
are sold pursuant to a registration statement, they will be sold in compliance
with the plan of distribution set forth therein.

     

    4.2          Furnishing of
Information.  As long as any Purchaser owns Common Shares and
Maiden BDA remains subject to the requirements of the Exchange Act, Maiden BDA
covenants to timely file (or obtain extensions in respect thereof and file
within the applicable grace period) all reports required to be filed by Maiden
BDA after the date hereof pursuant to the Exchange Act.  As long as
any Purchaser owns Common Shares, if Maiden BDA is not required to file reports
pursuant to the Exchange Act, it will prepare and furnish to the Purchasers and
make publicly available in accordance with Rule 144(c) such information as is
required for the Purchasers to sell the Common Shares under
Rule 144.  Maiden BDA further covenants that it will take such
further action as any holder of Common Shares may reasonably request, to the
extent required from time to time to enable such Person to sell such Shares
without registration under the Securities Act within the requirements of the
exemption provided by Rule 144.

     

    
      
         

      

      
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    4.3          Integration.  Maiden
BDA shall not sell, offer for sale or solicit offers to buy or otherwise
negotiate in respect of any security (as defined in Section 2 of the
Securities Act) that would be integrated with the offer or sale of the Shares in
a manner that would require the registration under the Securities Act of the
sale of the Shares to the Purchasers or that would be integrated with the offer
or sale of the Shares for purposes of the rules and regulations of any Trading
Market such that it would require shareholder approval prior to the closing of
such other transaction unless shareholder approval is obtained before the
closing of such subsequent transaction.

     

    4.4          Use of
Proceeds.  The Trust shall use the net proceeds received by it
from the sale of the Investment Units hereunder to purchase Debentures pursuant
to the Indenture.

     

    4.5          Indemnification of
Purchasers.  Subject to the provisions of this
Section 4.5, Maiden BDA, Maiden NA and the Trust will, jointly and
severally, indemnify and hold each Purchaser and its directors, officers,
shareholders, members, partners, employees and agents, each Person who controls
such Purchaser (within the meaning of Section 15 of the Securities Act and
Section 20 of the Exchange Act), and the directors, officers, shareholders,
agents, members, partners or employees of such controlling persons (each, a
“Purchaser Party”) harmless from any and all losses, liabilities, obligations,
claims, contingencies, damages, costs and expenses, including all judgments,
amounts paid in settlements, court costs and reasonable attorneys’ fees and
costs of investigation that any such Purchaser Party may suffer or incur, it
being understood and agreed that such losses and damages are not limited to
out-of-pocket expenses (collectively “Losses”) as a result of or relating to any
breach of any of the representations, warranties, covenants or agreements made
by any of Maiden BDA, Maiden NA and the Trust in this Agreement or in the other
Transaction Documents.  If any action shall be brought against any
Purchaser Party in respect of which indemnity may be sought pursuant to this
Agreement, such Purchaser Party shall promptly notify each of Maiden BDA, Maiden
NA and the Trust in writing (provided, that the
failure of any Purchaser Party to give such notice shall not relieve Maiden BDA,
Maiden NA and the Trust of their obligations or liabilities pursuant to this
Agreement, except (and only) to the extent that such failure shall have
prejudiced Maiden BDA, Maiden NA or the Trust), and Maiden BDA, Maiden NA or the
Trust shall have the right to assume the defense thereof with counsel of its own
choosing reasonably acceptable to the Purchaser Party if Maiden BDA, Maiden NA
or the Trust acknowledges in writing its obligation to indemnify such Purchaser
Party hereunder for any Losses that may result from such action.  Any
Purchaser Party shall have the right to employ separate counsel in any such
action and participate in the defense thereof, but the fees and expenses of such
counsel shall be at the expense of such Purchaser Party except to the extent
that (i) the employment thereof has been specifically authorized by Maiden
BDA, Maiden NA or the Trust in writing, (ii) each of Maiden BDA, Maiden NA
and the Trust has failed after a reasonable period of time to acknowledge in
writing their obligation to indemnify such Purchaser Party hereunder or to
assume such defense and to employ counsel or (iii) in such action there is,
in the reasonable opinion of such separate counsel, a material conflict on any
material issue between the position of any of Maiden BDA, Maiden NA or the Trust
and the position of such Purchaser Party, in which case Maiden BDA, Maiden NA
and the Trust shall be, jointly and severally, responsible for the reasonable
fees and expenses of no more than one such separate counsel.  None of
Maiden BDA, Maiden NA or the Trust will be liable to any Purchaser Party under
this Agreement (i) for any settlement by a Purchaser Party effected without
the prior written consent of Maiden BDA, Maiden NA and the Trust, which shall
not be unreasonably withheld or delayed, if any of Maiden BDA, Maiden NA or the
Trust has previously acknowledged in writing its obligations to indemnify such
Purchaser Party hereunder against Losses that may result from such action; or
(ii) to the extent, but only to the extent that any Losses are proximately
caused by (A) any Purchaser Party’s breach of any of the representations,
warranties, covenants or agreements made by such Purchaser Party in this
Agreement or in the other Transaction Documents, (B) any violations by a
Purchaser of state or federal securities laws or (C) any conduct by such
Purchaser that has been finally determined by a court of competent jurisdiction
to have constituted fraud, gross negligence or willful
misconduct.  Maiden BDA, Maiden NA and the Trust shall obtain the
prior written consent of the relevant Purchaser Party(ies) before entering into
any settlement of any third party claim if the settlement does not release the
relevant Purchaser Party(ies) from all liabilities and obligations with respect
to such claim or the settlement imposes injunctive or other equitable relief
against the relevant Purchaser Party(ies).

     

    
      
         

      

      
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    4.6          Registration Rights; Rule
144, Etc.

     

    (a)           Mandatory Shelf
Registration.  Maiden BDA will use its commercially reasonable
efforts to qualify for registration on, and will promptly file on or prior to
April 15, 2009, a registration statement on, Form S-1, and such Registration
Statement will be a “shelf” registration statement providing for the
registration, and the sale on a continuous or delayed basis, of the Registrable
Securities pursuant to Rule 415.  Upon filing the Registration
Statement, Maiden BDA will, if applicable, use its commercially reasonable
efforts to cause such Registration Statement to be declared effective, will keep
such Registration Statement effective with the Commission at all times and the
Registration Statement shall be re-filed upon its expiration, and shall
cooperate in any shelf take-down by amending or supplementing the prospectus
related to such Registration Statement as may be requested by the Purchasers or
any transferees or as otherwise required, until the Purchasers or any
transferees who would require such registration to effect a sale of the
Registrable Securities no longer hold the Registrable Securities. Maiden BDA
will pay all Registration Expenses incurred in connection with the shelf
registration contemplated by this Section 4.6.

     

    (b)           Registration
Procedures.  In connection with the obligations of Maiden BDA
with respect to any registration pursuant to this Agreement, Maiden BDA shall
use its commercially reasonable efforts to effect or cause to be effected the
registration of the Registrable Securities under the Securities Act to permit
the sale of such Registrable Securities, and Maiden BDA shall:

     

    
      
         

      

      
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    (i)       
    prepare and file with the Commission a Registration
Statement with respect to such Registrable Securities, make all required filings
with the National Association of Securities Dealers and the Financial Industry
Regulatory Authority and thereafter use its commercially reasonable efforts to
cause such Registration Statement to become effective as soon as reasonably
practicable and to remain effective as provided herein, provided that before
filing a Registration Statement or any amendments or supplements thereto, Maiden
BDA will, at Maiden BDA’s expense, furnish or otherwise make available to the
Holders’ Counsel and the Placement Agent copies of all such documents proposed
to be filed and such other documents reasonably requested by such counsel and
the Placement Agent, which documents will be subject to review and comment of
such counsel at Maiden BDA’s expense, including any comment letter from the
Commission with respect to such filing or the documents incorporated by
reference therein, and if requested by such counsel or the Placement Agent,
provide such counsel and the Placement Agent reasonable opportunity to
participate in the preparation of such Registration Statement and such other
opportunities to conduct a reasonable investigation within the meaning of the
Securities Act, including reasonable access to Maiden BDA’s financial books and
records, officers, accountants and other advisors;

     

    (ii)      
     prepare and file with the Commission such
amendments and supplements to such Registration Statement as may be necessary to
keep such Registration Statement effective continuously and such Registration
Statement shall be re-filed upon its expiration until all of the securities
covered by such Registration Statement have been disposed of in accordance with
the intended methods of disposition by the seller or sellers thereof set forth
in such Registration Statement (but in any event not before the expiration of
any longer period required under the Securities Act) (or such shorter period
ending on the date that the securities covered by such Registration Statement
cease to constitute Registrable Securities), and comply with the provisions of
the Securities Act with respect to the disposition of all securities covered by
such Registration Statement until such time as all of such securities have been
disposed of in accordance with the intended methods of disposition by the seller
or sellers thereof set forth in such Registration Statement (or such shorter
period ending on the date that the securities covered by such Registration
Statement cease to constitute Registrable Securities), and cause the related
prospectus to be supplemented by any prospectus supplement as may be necessary
to comply with the provisions of the Securities Act with respect to the
disposition of the securities covered by such Registration Statement, and as so
supplemented to be filed pursuant to Rule 424 (or any similar provisions then in
force) under the Securities Act;

     

    (iii)           furnish
to each seller of Registrable Securities such number of copies, without charge,
of such Registration Statement, each amendment and supplement thereto, including
each preliminary prospectus, final prospectus, any other prospectus (including
any prospectus filed under Rule 424, Rule 430A or Rule 430B under the Securities
Act and any “issuer free writing prospectus” as such term is defined under Rule
433 promulgated under the Securities Act), all exhibits and other documents
filed therewith and such other documents as such seller may reasonably request
including in order to facilitate the disposition of the Registrable Securities
owned by such seller, and upon request a copy of any and all transmittal letters
or other correspondence to or received from, the Commission or any other
Governmental Authority relating to such offer;

     

    (iv)           register
or qualify (or exempt from registration or qualification) such Registrable
Securities, and keep such registration or qualification (or exemption therefrom)
effective, under such other securities (including insurance securities) or blue
sky laws of such jurisdictions as any seller reasonably requests and do any and
all other acts and things that may be reasonably necessary or reasonably
advisable to enable such seller to consummate the disposition in such
jurisdictions of the Registrable Securities owned by such seller (provided that
Maiden BDA will not be required to (A) qualify generally to do business in any
jurisdiction where it would not otherwise be required to qualify but for this
subsection, (B) subject itself to taxation in any such jurisdiction or (C)
consent to general service of process in any such jurisdiction);

     

    
      
         

      

      
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    (v)         
  notify each seller of such Registrable Securities and the Holders’
Counsel at any time when a prospectus relating thereto is required to be
delivered under the Securities Act, upon discovery that, or upon the discovery
of the happening of any event that makes any statement made in the Registration
Statement or related prospectus or any document incorporated or deemed to be
incorporated therein by reference untrue in any material respect or that
requires the making of any changes in such Registration Statement, prospectus or
documents and, as soon as reasonably practicable, subject to Section 4.9,
prepare and furnish to such seller a reasonable number of copies of a supplement
or amendment to such prospectus so that, in the case of the Registration
Statement, it will not contain any untrue statement of material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein, not misleading, and that in the case of any prospectus, it
will not contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statement therein, in light of the
circumstances in which they were made, not misleading;

     

    (vi)           notify
each seller of any Registrable Securities covered by such Registration Statement
and the Holders’ Counsel (A) when such Registration Statement or the prospectus
or any prospectus supplement or post-effective amendment has been filed and,
with respect to such Registration Statement or any post-effective amendment,
when the same has become effective, (B) of any request by the Commission for
amendments or supplements to such Registration Statement or to amend or to
supplement such prospectus or for additional information, (C) of the issuance by
the Commission of any stop order suspending the effectiveness of such
Registration Statement or the initiation of any Proceedings for any of such
purposes, and (D) of the receipt by Maiden BDA of any notification with respect
to the suspension of the qualification or exemption from qualification of any of
the Registrable Securities for sale in any jurisdiction, or the initiation or
threatening of any Proceeding for such purpose;

     

    (vii)          upon
the occurrence of an event contemplated in Section 4.6(b)(v) or in Section
4.6(b)(vi)(B), (b)(vi)(C) or (b)(vi)(D) (but subject to Section 4.9), prepare a
supplement or amendment to the Registration Statement or supplement to the
related prospectus or any document incorporated or deemed to be incorporated
therein by reference, or file any other required document so that such
prospectus as thereafter delivered to the sellers of such Registrable Securities
will not contain an untrue statement of a material fact or omit to state any
fact necessary to make the statements therein not misleading in the light of the
circumstances under which they were made;

     

    (viii)         cause
all such Registrable Securities to be listed on each securities exchange on
which similar securities issued by Maiden BDA are then listed or, if no similar
securities issued by Maiden BDA are then listed on any securities exchange, use
its commercially reasonable efforts to cause all such Registrable Securities to
be listed on the New York Stock Exchange or the Nasdaq Global Select Market, as
determined by Maiden BDA;

     

    
      
         

      

      
        19

        
          

        

      

      
         

      

    

    (ix)           provide
a transfer agent and registrar for all such Registrable Securities not later
than the effective date of such Registration Statement;

     

    (x)           
if requested by any seller of Registrable Securities, promptly include in a
prospectus supplement or amendment such information as the seller may reasonably
request in order to permit the intended method of distribution of such
securities and make all required filings of such prospectus supplement or such
amendment as soon as practicable after Maiden BDA has received such
request;

     

    (xi)           make
available for inspection by any seller of Registrable Securities and the
Holders’ Counsel, and any attorney, accountant or other agent retained by any
such seller, all financial and other records, pertinent corporate documents and
documents relating to the business of Maiden BDA, and cause Maiden BDA’s
officers, directors, employees and independent accountants to supply all
information reasonably requested by any such seller, attorney, accountant or
agent in connection with such Registration Statement, provided that it shall be
a condition to such inspection and receipt of such information that the
inspecting person (A) enter into a confidentiality agreement in form and
substance reasonably satisfactory to Maiden BDA and (B) agree to minimize the
disruption to Maiden BDA’s business in connection with the
foregoing;

     

    (xii)          otherwise
use its commercially reasonable efforts to comply with all applicable rules and
regulations of the Commission and any applicable national securities
exchange;

     

    (xiii)         timely
provide to its security holders earning statements satisfying the provisions of
Section 11(a) of the Securities Act and Rule 158 thereunder;

     

    (xiv)         use
commercially reasonable efforts to avoid the issuance of, and in the event of
the issuance of any stop order suspending the effectiveness of a Registration
Statement, or of any order suspending or preventing the use of any related
prospectus or ceasing trading of any securities included in such Registration
Statement for sale in any jurisdiction, use commercially reasonable efforts to
promptly obtain the withdrawal of such order;

     

    (xv)          obtain
any required regulatory or shareholder approval necessary for the Purchaser or
any transferee to sell its Registrable Securities in an offering;
and

     

    (xvi)         as
a condition to registering Registrable Securities, Maiden BDA may require each
Purchaser and transferee holding Registrable Securities as to which any
registration is being effected to furnish Maiden BDA with such information
regarding such person and pertinent to the disclosure requirements relating to
the registration and the distribution of such securities as Maiden BDA may from
time to time reasonably request in writing.

     

    
      
         

      

      
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    (c)           Registration
Expenses.  Except as otherwise provided in this Agreement, all
expenses incidental to Maiden BDA’s performance of or compliance with this
Agreement, including all registration and filing fees, fees and expenses of
compliance with securities (including insurance securities) or blue sky laws,
word processing, duplicating and printing expenses, messenger, telephone and
delivery expenses, expenses incurred in connection with any road show, and fees
and disbursements of counsel for Maiden BDA and all independent certified public
accountants and other persons retained by Maiden BDA, as well as reasonable fees
and out-of-pocket expenses of one counsel (“Holders’ Counsel”) selected by
Purchasers holding the majority of the Registrable Securities, who shall be
reasonably acceptable to a majority of the holders of Registrable Securities
that are not Founders; provided that, if such counsel shall not have been
selected by a majority of the holders of Registrable Securities, a majority of
the holders of Registrable Securities that are not Founders may select a counsel
to be Holders’ Counsel that is experienced in public offerings, it being
acknowledged that Sidley Austin LLP is so experienced (all such expenses,
“Registration Expenses”), will be borne by Maiden BDA. Maiden BDA will, in any
event, pay its internal expenses (including all salaries and expenses of its
officers and employees performing legal or accounting duties), the expenses of
any annual audit or quarterly review, the expenses of any liability insurance
and the expenses and fees for listing the securities to be registered on each
securities exchange on which similar securities issued by Maiden BDA are then
listed or on the New York Stock Exchange or the Nasdaq Global Select Market. The
holders of the securities so registered shall pay all underwriting discounts,
selling commissions and transfer taxes applicable to the sale of Registrable
Securities hereunder.

     

    (d)           Suspension of
Use.  In addition to and without limiting the provisions of
Section 4.9, each person that is participating in any registration hereunder
agrees that, upon receipt of any notice from Maiden BDA of the happening of any
event of the kind described in Section 4.6(b)(v) and (b)(vi), such person will
forthwith discontinue the disposition of its Registrable Securities pursuant to
the Registration Statement until such person receives copies of a supplemented
or amended prospectus as contemplated by such Section 4.6(b)(v), (b)(vi) and
(b)(vii).

     

    4.7          Form D; Blue Sky
Filings.  The Issuers agree to timely file a Form D with
respect to the Investment Units as required under Regulation D and to
provide a copy thereof, promptly upon request of any Purchaser.  The
Issuers shall take such action as the Issuers shall reasonably determine is
necessary in order to obtain an exemption for, or to qualify the Investment
Units for, sale to the Purchasers at the applicable Closing under applicable
securities (including insurance securities) or “Blue Sky” laws of the states of
the United States, and shall provide evidence of such actions promptly upon
request of any Purchaser.  Each Purchaser shall take all commercially
reasonable actions that are reasonably requested by the Issuers related to, or
to effectuate, the filing of a Form D or any filing required pursuant to
the “Blue Sky” laws of the states of the United States which, for purposes of
clarity, shall not include the payment of any fees by such
Purchaser.

     

    4.8          Rule
144A.  For so long as the Capital Securities are not eligible
for resale without restriction under Rule 144 under the Securities Act, Maiden
BDA, Maiden NA and the Trust will, during any period in which such information
is not available through the periodic filings of Maiden BDA with the Commission,
upon written request of a Purchaser provide to such Purchaser and to each
prospective purchaser (as designated by such Purchaser), any information
required to be provided by Rule 144A(d)(4) under the Securities
Act.

     

    
      
         

      

      
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    4.9         Black-Out
Period.

     

    (a)           Subject
to the provisions of this Section 4.9 and a good faith determination by a
majority of the independent members of the Board of Directors of Maiden BDA that
it is in the best interests of Maiden BDA to suspend the use of the Registration
Statement contemplated by Section 4.6, following the effectiveness of the
Registration Statement (and the filings with any international, federal or state
securities commissions), Maiden BDA, by written notice to the Placement Agent
and the Purchasers, may direct the Purchasers to suspend sales of the
Registrable Securities pursuant to the Registration Statement for such times as
Maiden BDA reasonably may determine is necessary and advisable (but in no event
for more than an aggregate of ninety (90) days in any rolling twelve (12)-month
period commencing or more than sixty (60) days in any rolling 90-day period), if
any of the following events shall occur: (i) the representative of the
underwriters of an underwritten offering of Common Shares by Maiden BDA has
advised Maiden BDA that the sale of Registrable Securities pursuant to the
Registration Statement would have a material adverse effect on Maiden BDA’s
primary offering; (ii) the majority of the independent members of the Board of
Directors of Maiden BDA shall have determined in good faith that (A) the offer
or sale of any Registrable Securities would materially impede, delay or
interfere with any proposed financing, offer or sale of securities, acquisition,
corporate reorganization or other significant transaction involving Maiden BDA,
(B) after the advice of counsel, the sale of Registrable Securities pursuant to
the Registration Statement would require disclosure of non-public material
information not otherwise required to be disclosed under applicable law, and (C)
(x) Maiden BDA has a bona fide business purpose for preserving the
confidentiality of such transaction, (y) disclosure would have a material
adverse effect on Maiden BDA or Maiden BDA’s ability to consummate such
transaction, or (z) the proposed transaction renders Maiden BDA unable to comply
with Commission requirements, in each case under circumstances that would make
it impractical or inadvisable to cause the Registration Statement (or such
filings) to become effective or to promptly amend or supplement the Registration
Statement on a post-effective basis, as applicable; or (iii) the majority of the
independent members of the Board of Directors of Maiden BDA shall have
determined in good faith, after the advice of counsel, that it is required by
law, rule or regulation or that it is in the best interests of Maiden BDA to
supplement the Registration Statement or file a post-effective amendment to the
Registration Statement in order to incorporate information into the Registration
Statement for the purpose of (1) including in the Registration Statement any
prospectus required under Section 10(a)(3) of the Securities Act; (2) reflecting
in the prospectus included in the Registration Statement any facts or events
arising after the effective date of the Registration Statement (or of the
most-recent post-effective amendment) that, individually or in the aggregate,
represents a fundamental change in the information set forth therein; or (3)
including in the prospectus included in the Registration Statement any material
information with respect to the plan of distribution not disclosed in the
Registration Statement or any material change to such information. Upon the
occurrence of any such suspension, Maiden BDA shall use all reasonable efforts
to cause the Registration Statement to become effective or to promptly amend or
supplement the Registration Statement on a post-effective basis or to take such
action as is necessary to make resumed use of the Registration Statement
compatible with Maiden BDA’s best interests, as applicable, so as to permit the
Purchaser’s to resume sales of the Registrable Securities as soon as
possible.

     

    
      
         

      

      
        22

        
          

        

      

      
         

      

    

    (b)           In
the case of an event that causes Maiden BDA to suspend the use of the
Registration Statement (a “Suspension Event”), Maiden BDA shall give written
notice (a “Suspension Notice”) to the Placement Agent and the Purchasers to
suspend sales of the Registrable Securities and such notice shall state
generally the basis for the notice and that such suspension shall continue only
for so long as the Suspension Event or its effect is continuing and Maiden BDA
is using all reasonable efforts and taking all reasonable steps to terminate
suspension of the use of the Registration Statement as promptly as possible. The
Purchasers shall not effect any sales of the Registrable Securities pursuant to
the Registration Statement (or such filings) at any time after it has received a
Suspension Notice from Maiden BDA and prior to receipt of an End of Suspension
Notice (as defined below). If so directed by Maiden BDA, each Purchaser will
deliver to Maiden BDA (at the expense of Maiden BDA) all copies other than
permanent file copies then in such Purchaser’s possession of the prospectus
covering the Registrable Securities at the time of receipt of the Suspension
Notice. The Purchasers may recommence effecting sales of the Registrable
Securities pursuant to the Registration Statement (or such filings) following
further notice to such effect (an “End of Suspension Notice”) from Maiden BDA,
which End of Suspension Notice shall be given by Maiden BDA to the Purchasers
and the Placement Agent in the manner described above promptly following the
conclusion of any Suspension Event and its effect.

     

    (c)           Notwithstanding
any provision herein to the contrary, if Maiden BDA shall give a Suspension
Notice pursuant to this Section 4.9, Maiden BDA agrees that it shall extend the
period of time during which the Registration Statement shall be maintained
effective pursuant to this Agreement by the number of days during the period
from the date of receipt by the Purchaser of the Suspension Notice to and
including the date of receipt by the Purchasers of the End of Suspension Notice
and copies of the supplemented or amended prospectus necessary to resume
sales.

     

    ARTICLE
V.

     

    MISCELLANEOUS

     

    5.1          Termination.

     

    (a)           This
Agreement may be terminated by any Purchaser, as to such Purchaser’s obligations
hereunder only and without any effect whatsoever on the obligations between
Maiden BDA and the other Purchasers, by written notice to the other parties, if
the Closing with respect to the Investment Units to be purchased by such
Purchaser has not occurred on or before January 23, 2009; provided, however, that the
right to terminate this Agreement under this Section 5.1 shall not be available
to any Person whose failure to comply with its obligations under this Agreement
has been the cause of or resulted in the failure of the Closing to occur on or
before such time.  Nothing in this Section 5.1 shall affect the right
of any party to sue for any breach by the other party (or parties).

     

    
      
         

      

      
        23

        
          

        

      

      
         

      

    

    (b)           Sections
5.2, 5.3, 5.6, 5.8 and 5.9 shall survive any termination hereof pursuant to this
Section 5.1.

     

    5.2          Fees and
Expenses.  Except as set forth in this Section 5.2, each party
shall pay the fees and expenses of its advisers, counsel, accountants and other
experts, if any, and all other expenses incurred by such party incident to the
negotiation, preparation, execution, delivery and performance of this
Agreement.

     

    5.3          Entire
Agreement.  The Transaction Documents, together with the
exhibits and schedules thereto, contain the entire understanding of the parties
with respect to the subject matter hereof and thereof and supersede all prior
agreements and understandings, oral or written, with respect to such matters,
which the parties acknowledge have been merged into such documents, exhibits and
schedules.

     

    5.4          Notices.  Any
and all notices or other communications or deliveries required or permitted to
be provided hereunder shall be in writing and shall be deemed given and
effective on the earliest of (a) the date of transmission, if such notice
or communication is delivered via facsimile at the facsimile number set forth on
the signature pages attached hereto prior to 5:30 p.m. (New York City time) on a
Trading Day, (b) the next Trading Day after the date of transmission, if
such notice or communication is delivered via facsimile at the facsimile number
set forth on the signature pages attached hereto on a day that is not a Trading
Day or later than 5:30 p.m. (New York City time) on any Trading Day,
(c) the second Trading Day following the date of mailing, if sent by U.S.
nationally recognized overnight courier service, or (d) upon actual receipt
by the party to whom such notice is required to be given.  The address
for such notices and communications shall be as set forth on the signature pages
attached hereto.

     

    5.5          Amendments;
Waivers.  No provision of this Agreement may be waived or
amended except in a written instrument signed, in the case of an amendment, by
Maiden BDA and Purchasers holding at least a majority of the Capital Securities
then held by the Purchasers or, in the case of a waiver, by the party against
whom enforcement of any such waived provision is sought; provided that (i) any
amendment of any of Sections 2.2, 2.3, 3.1, 3.2, 4.1, 4.2, 4.3, 4.4, 4.5, 5.1,
this Section 5.5 or the amount payable by any Purchaser for its Shares can only
be effected by a written instrument signed by Maiden BDA and each Purchaser,
(ii) no amendment to this Agreement that treats any Purchaser disparately
by its terms (as opposed to its effect) from the other Purchasers may be
effected without the consent of the disparately affected Purchaser, and (iii)
any amendment to Section 4.6, 4.7, 4.8 or 4.9 can only be effected if it is
approved by holders of a majority of the Common Shares issued pursuant hereto
and a majority of the holders of such Common Shares that are not
Founders.  No waiver of any default with respect to any provision,
condition or requirement of this Agreement shall be deemed to be a continuing
waiver in the future or a waiver of any subsequent default or a waiver of any
other provision, condition or requirement hereof, nor shall any delay or
omission of any party to exercise any right hereunder in any manner impair the
exercise of any such right.

     

    5.6          Headings.  The
headings herein are for convenience only, do not constitute a part of this
Agreement and shall not be deemed to limit or affect any of the provisions
hereof.

     

    
      
         

      

      
        24

        
          

        

      

      
         

      

    

    5.7          Successors and
Assigns.  This Agreement shall be binding upon and inure to the
benefit of the parties and their successors and permitted assigns.  No
Issuer may assign this Agreement or any rights or obligations hereunder without
the prior written consent of the Purchasers holding a majority of the Capital
Securities.  Any Purchaser may assign any or all of its rights under
this Agreement to any Person to whom such Purchaser assigns or transfers any
Capital Securities or Common Shares, provided such transferee agrees in writing
to be bound, with respect to the transferred Capital Securities or Common Shares
and in all other respects bound to the terms of this Agreement, by the
provisions of the Transaction Documents that apply to the
“Purchasers.”

     

    5.8          No Third-Party
Beneficiaries.  This Agreement is intended for the benefit of
the parties hereto and their respective successors and permitted assigns and is
not for the benefit of, nor may any provision hereof be enforced by, any other
Person, except (i) as otherwise set forth in Section 4.5 and (ii) the Placement
Agent is an intended third party beneficiary of Article III and Sections 4.5,
4.6 and 4.7.

     

    5.9          Governing
Law.  All questions concerning the construction, validity,
enforcement and interpretation of the Transaction Documents shall be governed by
and construed and enforced in accordance with the internal laws of the State of
New York, without regard to the principles of conflicts of law
thereof.  Each party agrees that all legal Proceedings concerning the
interpretations, enforcement and defense of the transactions contemplated by
this Agreement and any other Transaction Documents (whether brought against a
party hereto or its respective affiliates, directors, officers, shareholders,
employees or agents) shall be commenced exclusively in the state and federal
courts sitting in the City of New York.  Each party hereby irrevocably
submits to the exclusive jurisdiction of the state and federal courts sitting in
the City of New York, borough of Manhattan for the adjudication of any dispute
hereunder or in connection herewith or with any transaction contemplated hereby
or discussed herein (including with respect to the enforcement of any of the
Transaction Documents), and hereby irrevocably waives, and agrees not to assert
in any suit, action or Proceeding, any claim that it is not personally subject
to the jurisdiction of any such court, that such suit, action or Proceeding is
improper or is an inconvenient venue for such Proceeding.  Each party
hereby irrevocably waives personal service of process and consents to process
being served in any such suit, action or Proceeding by mailing a copy thereof
via registered or certified mail or overnight delivery (with evidence of
delivery) to such party at the address in effect for notices to it under this
Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof.  Nothing contained herein shall
be deemed to limit in any way any right to serve process in any other manner
permitted by law.  The parties hereby waive all rights to a trial by
jury.  If any party shall commence an action or proceeding to enforce
any provisions of the Transaction Documents, then the substantially prevailing
party in such action or Proceeding shall be reimbursed by the other party for
its reasonable attorneys’ fees and other costs and expenses incurred with the
investigation, preparation and prosecution of such action or
proceeding.

     

    5.10          Survival.  The
representations and warranties contained herein shall survive the Closing Date
and the delivery of the Investment Units until the two-year anniversary of the
Closing Date.  Notwithstanding the preceding sentence, any breach of
representation or warranty in respect of which indemnity may be sought under
this Agreement shall survive the time at which it would otherwise terminate
pursuant to the preceding sentence if notice of the inaccuracy or breach thereof
shall have been given in writing to the party against whom indemnity may be
sought prior to such time.

     

    
      
         

      

      
        25

        
          

        

      

      
         

      

    

    5.11          Execution.  This
Agreement may be executed in two or more counterparts, all of which when taken
together shall be considered one and the same agreement and shall become
effective when counterparts have been signed by each party and delivered to the
other party, it being understood that both parties need not sign the same
counterpart.  In the event that any signature is delivered by
facsimile transmission or by e-mail delivery of a “.pdf” format data file, such
signature shall create a valid and binding obligation of the party executing (or
on whose behalf such signature is executed) with the same force and effect as if
such facsimile or “.pdf” signature page were an original thereof.

     

    5.12          Severability.  If
any term, provision, covenant or restriction of this Agreement is held by a
court of competent jurisdiction to be invalid, illegal, void or unenforceable,
the remainder of the terms, provisions, covenants and restrictions set forth
herein shall remain in full force and effect and shall in no way be affected,
impaired or invalidated, and the parties hereto shall use their commercially
reasonable efforts to find and employ an alternative means to achieve the same
or substantially the same result as that contemplated by such term, provision,
covenant or restriction.  It is hereby stipulated and declared to be
the intention of the parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of such that may be
hereafter declared invalid, illegal, void or unenforceable.

     

    5.13          Rescission and Withdrawal
Right.  Notwithstanding anything to the contrary contained in
(and without limiting any similar provisions of) any of the other Transaction
Documents, whenever any Purchaser exercises a right, election, demand or option
under a Transaction Document and any of Maiden BDA, Maiden NA and the Trust does
not timely perform its related obligations within the periods therein provided,
then such Purchaser may rescind or withdraw, in its sole discretion from time to
time upon written notice to any of Maiden BDA, Maiden NA and the Trust, any
relevant notice, demand or election in whole or in part without prejudice to its
future actions and rights.

     

    5.14          Replacement of Common
Shares.  If any certificate or instrument evidencing any Common
Shares is mutilated, lost, stolen or destroyed, Maiden BDA shall issue or cause
to be issued in exchange and substitution for and upon cancellation thereof (in
the case of mutilation), or in lieu of and substitution therefor, a new
certificate or instrument, but only upon receipt of evidence reasonably
satisfactory to Maiden BDA of such loss, theft or destruction.  The
applicant for a new certificate or instrument under such circumstances shall
also pay any reasonable third-party costs (including customary indemnity)
associated with the issuance of such replacement Common Shares.

     

    5.15          Remedies.  In
addition to being entitled to exercise all rights provided herein or granted by
law, including recovery of damages, each of the parties hereto will be entitled
to specific performance under the Transaction Documents.  The parties
agree that monetary damages may not be adequate compensation for any loss
incurred by reason of any breach of obligations contained in the Transaction
Documents and hereby agrees to waive and not to assert in any action for
specific performance of any such obligation the defense that a remedy at law
would be adequate.

     

    
      
         

      

      
        26

        
          

        

      

      
         

      

    

    5.16          Independent Nature of
Purchasers’ Obligations and Rights.  The obligations of each
Purchaser under any Transaction Document are several and not joint with the
obligations of any other Purchaser, and no Purchaser shall be responsible in any
way for the performance or non-performance of the obligations of any other
Purchaser under any Transaction Document or any breach of any representation or
warranty of any other Purchaser under any Transaction
Document.  Nothing contained herein or in any other Transaction
Document, and no action taken by any Purchaser pursuant thereto, shall be deemed
to constitute the Purchasers as a partnership, an association, a joint venture
or any other kind of entity, or create a presumption that the Purchasers are in
any way acting in concert or as a group with respect to such obligations or the
transactions contemplated by the Transaction Documents.  Each
Purchaser shall be entitled to independently protect and enforce its rights,
including without limitation, the rights arising out of this Agreement or out of
the other Transaction Documents, and it shall not be necessary for any other
Purchaser to be joined as an additional party in any proceeding for such
purpose.  Each Purchaser has been represented by its own separate
legal counsel in their review and negotiation of the Transaction
Documents.

     

    5.17          Construction.  The
parties agree that each of them and/or their respective counsel has reviewed and
had an opportunity to revise the Transaction Documents and, therefore, the
normal rule of construction to the effect that any ambiguities are to be
resolved against the drafting party shall not be employed in the interpretation
of the Transaction Documents or any amendments hereto.

     

    (Signature
Pages Follow)

     

    
      
         

      

      
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                                                                SIGNATURE PAGE

                                                              	 
      	
                                                                Date
      Signed:  January ____, 2009

                                                              
	 
      	 
      	 
      
	
                                                                PURCHASER:

                                                              	 
      	 
      
	 
      	 
      	 
      
	
                                                                 

                                                              	 
      	
                                                                 

                                                              
	 	 	 
	 
      	 
      	 
      
	
                                                                By

                                                              	 
      	 
      
	
                                                                Signature

                                                              	 
      	
                                                                Second
      Signature (if purchasing jointly)

                                                              
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                                                                Printed
      Name and Title, if applicable

                                                              	 
      	
                                                                Printed
      Second Name and Title, if applicable

                                                              
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                                                                Entity
      Name

                                                              	 
      	
                                                                Entity
      Name

                                                              
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                                                                Address

                                                              	 
      	
                                                                Address

                                                              
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                                                                City,
      State and Zip Code

                                                              	 
      	
                                                                City,
      State and Zip Code

                                                              
	 
      	 
      	 
      
	
                                                                Physical
      Delivery Address for Certificates

                                                              	 
      	
                                                                Physical
      Delivery Address for Certificates

                                                              
	
                                                                (if
      different than above address)

                                                              	 
      	
                                                                (if
      different than above address)

                                                              
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                                                                City,
      State and Zip Code

                                                              	 
      	
                                                                City,
      State and Zip Code

                                                              
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                                                                Telephone-Business

                                                              	 
      	
                                                                Telephone—Business

                                                              
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                                                                Facsimile-Business

                                                              	 
      	
                                                                Facsimile—Business

                                                              
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                                                                Email
      Address

                                                              	 
      	
                                                                Email
      Address

                                                              
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                                                                Tax
      ID # or Social Security #

                                                              	 
      	
                                                                Tax
      ID # or Social Security
#

                                                              

                                                      

                                                    

                                                  

                                                

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    

    Name in
which Investment Units should be
issued: _______________________________________

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
       

      
        
          	
                    

                

        

      

       

    

    This
Securities Purchase Agreement is agreed to and accepted as of January 14,
2009.

    

    
      
        
          	 
      	
                  MAIDEN
      HOLDINGS, LTD

                
	 
      	 
      
	 
      	
                  By:

                	
                    /s/  Michael
      Tait

                
	 
      	
                  Name:  Michael
      Tait

                
	 
      	
                  Title:  Chief
      Financial Officer

                
	 
      	 
      
	 
      	
                  MAIDEN
      HOLDINGS NORTH AMERICA, LTD.

                
	 
      	 
      
	 
      	
                  By:

                	
                    /s/  Arturo M.
      Raschbaum

                
	 
      	
                  Name:  Arturo
      M. Raschbaum

                
	 
      	
                  Title:  Chief
      Executive Officer

                

        

      

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    
      
        	 
      	
                MAIDEN
      CAPITAL FINANCING TRUST

              
	 
      	 
      	 
      
	 
      	
                By:

              	
                     /s/  Arturo M.
      Raschbaum

              
	 
      	 
      	
                    
      Arturo M. Raschbaum

              
	 
      	 
      	
                     
      Administratorex10-1.htm

     

    EXHIBIT
10.1

    
      
         

        

         

        

         

        ARRANGEMENT
AGREEMENT

         

        among

         

        TAILWIND
FINANCIAL INC.

         

        and

         

         

        AV
ACQUISITION CORP.

         

        and

         

        ALLEN-VANGUARD
CORPORATION

         

        Dated
as of January 23, 2009

      

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

       

      TABLE OF
CONTENTS

       

       

      
        
          
            	
                    ARTICLE I DEFINITIONS AND
      SCHEDULES

                  	
                    1

                  

          

        

        

        
          
            
              
                	 	
                        Section 1.01

                      	
                        Definitions.

                      	
                        1

                      
	 	
                        Section 1.02

                      	
                        Schedules

                      	
                        12

                      

              

            

          

        

         

        
          
            	
                    ARTICLE II ARRANGEMENT

                  	
                    13

                  

          

        

        

        
          
            
              
                	 	
                        Section 2.01

                      	
                        Implementation Steps by the
      Company.

                      	
                        13

                      
	 	
                        Section 2.02

                      	
                        Interim Order.

                      	
                        13

                      
	 	
                        Section 2.03

                      	
                        Articles of Arrangement.

                      	
                        14

                      
	 	
                        Section 2.04

                      	
                        Company’s Circular

                      	
                        14

                      
	 	
                        Section 2.05

                      	
                        Parent’s Stockholder
Meeting

                      	
                        15

                      
	 	
                        Section 2.06

                      	
                        Parent Proxy Statement.

                      	
                        16

                      
	 	
                        Section 2.07

                      	
                        Preparation of Filings.

                      	
                        17

                      
	 	
                        Section 2.08

                      	
                        Company Action

                      	
                        19

                      
	 	
                        Section 2.09

                      	
                        Consideration.

                      	
                        19

                      
	 	
                        Section 2.10

                      	
                        Company Stock Options and Company
      RSUs.

                      	
                        20

                      
	 	
                        Section 2.11

                      	
                        Company Warrants.

                      	
                        21

                      
	 	
                        Section 2.12

                      	
                        Adjustments to Consideration to Company Common
      Shareholders.

                      	
                        21

                      

              

            

          

        

         

        
          
            	
                    ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE
      COMPANY

                  	
                    22

                  

          

        

        

        
          
            
              
                
                  
                    
                      
                        	 	
                                Section 3.01

                              	
                                Organization and Qualification;
      Subsidiaries.

                              	
                                22

                              
	 	
                                Section 3.02

                              	
                                Certificate of Incorporation and
      By-Laws.

                              	
                                22

                              
	 	
                                Section 3.03

                              	
                                Authority.

                              	
                                23

                              
	 	
                                Section 3.04

                              	
                                No Conflict; Required Filings and
      Consents.

                              	
                                23

                              
	 	
                                Section 3.05

                              	
                                Capitalization.

                              	
                                24

                              
	 	
                                Section 3.06

                              	
                                Securities Law Matters; Financial
      Statements.

                              	
                                24

                              

                      

                    

                  

                

              

            

          

        

         

         

        
          
            
            

          

          
            i

            
              

            

          

          
            
            

          

        

         

        
          
            
              
                
                  	 	
                          Section 3.07

                        	
                          Information to be Supplied.

                        	
                          26

                        
	 	
                          Section 3.08

                        	
                          Permits; Compliance.

                        	
                          26

                        
	 	
                          Section 3.09

                        	
                          Absence of Certain Changes or
      Events.

                        	
                          27

                        
	 	
                          Section 3.10

                        	
                          Absence of Litigation.

                        	
                          28

                        
	 	
                          Section 3.11

                        	
                          Contracts.

                        	
                          28

                        
	 	
                          Section 3.12

                        	
                          Employee Matters.

                        	
                          30

                        
	 	
                          Section 3.13

                        	
                          Customers.

                        	
                          33

                        
	 	
                          Section 3.14

                        	
                          Property and Leases.

                        	
                          33

                        
	 	
                          Section 3.15

                        	
                          Intellectual Property.

                        	
                          35

                        
	 	
                          Section 3.16

                        	
                          Taxes.

                        	
                          36

                        
	 	
                          Section 3.17

                        	
                          Environmental Matters.

                        	
                          39

                        
	 	
                          Section 3.18

                        	
                          Insurance.

                        	
                          40

                        
	 	
                          Section 3.19

                        	
                          Brokers.

                        	
                          41

                        
	 	
                          Section 3.20

                        	
                          Related Party Transactions; Collateral
      Benefit.

                        	
                          41

                        
	 	
                          Section 3.21

                        	
                          Disclosure.

                        	
                          42

                        
	 	
                          Section 3.22

                        	
                          No Other Purchase
    Agreements.

                        	
                          43

                        
	 	
                          Section 3.23

                        	
                          Privacy Laws.

                        	
                          43

                        
	 	
                          Section 3.24

                        	
                          Product Warranty; Product
      Liability.

                        	
                          43

                        

                

              

            

          

        

         

        
          
            	
                    ARTICLE IV REPRESENTATIONS AND WARRANTIES OF
      PARENT AND PURCHASER

                  	
                    44

                  

          

        

        

        
          
            
              
                
                  
                    
                      
                        	 	
                                Section 4.01

                              	
                                Due Incorporation, Assets and
      Liabilities.

                              	
                                44

                              
	 	
                                Section 4.02

                              	
                                Corporate Authorization.

                              	
                                44

                              
	 	
                                Section 4.03

                              	
                                Governmental Authorization.

                              	
                                45

                              
	 	
                                Section 4.04

                              	
                                No Violation.

                              	
                                45

                              

                      

                    

                  

                

              

               

               

              
                
                  
                  

                

                
                  ii

                  
                    

                  

                

                
                  
                  

                

              

            

          

        

         

        
          
            
              
                
                  	 	
                          Section 4.05

                        	
                          Consents.

                        	
                          45

                        
	 	
                          Section 4.06

                        	
                          Litigation.

                        	
                          45

                        
	 	
                          Section 4.07

                        	
                          Issuance of Parent Common
      Stock.

                        	
                          46

                        
	 	
                          Section 4.08

                        	
                          Fees.

                        	
                          46

                        
	 	
                          Section 4.09

                        	
                          Charter Documents;
Legality.

                        	
                          46

                        
	 	
                          Section 4.10

                        	
                          Capitalization and Ownership of the Parent, Trust
      Fund.

                        	
                          47

                        
	 	
                          Section 4.11

                        	
                          Financial Statements.

                        	
                          47

                        
	 	
                          Section 4.12

                        	
                          Contracts, Payments on Change of
      Control

                        	
                          48

                        
	 	
                          Section 4.13

                        	
                          Absence of Certain Changes or
      Events.

                        	
                          48

                        
	 	
                          Section 4.14

                        	
                          Compliance with Laws.

                        	
                          49

                        
	 	
                          Section 4.15

                        	
                          Ownership of Parent
    Securities.

                        	
                          49

                        
	 	
                          Section 4.16

                        	
                          Restrictions on Business
      Activities.

                        	
                          49

                        
	 	
                          Section 4.17

                        	
                          The Purchaser.

                        	
                          49

                        
	 	
                          Section 4.18

                        	
                          Securities Law Matters.

                        	
                          49

                        
	 	
                          Section 4.19

                        	
                          Other Agreements

                        	
                          50

                        
	 	
                          Section 4.20

                        	
                          Parent SEC Documents.

                        	
                          50

                        

                

              

            

          

        

         

        
          
            	
                    ARTICLE V COVENANTS OF THE
      COMPANY

                  	
                    52

                  

          

        

        

        
          
            
              
                
                  
                    
                      	 	
                              Section 5.01

                            	
                              Conduct of the Business.

                            	
                              52

                            
	 	
                              Section 5.02

                            	
                              Access to Information.

                            	
                              53

                            
	 	
                              Section 5.03

                            	
                              Notices of Certain Events.

                            	
                              54

                            
	 	
                              Section 5.04

                            	
                              Reporting and Compliance With
      Law.

                            	
                              54

                            

                    

                  

                

              

            

          

        

         

        
          
            	
                    ARTICLE VI COVENANTS OF ALL
      PARTIES

                  	
                    54

                  

          

        

        

        
          
            
              
                
                  
                    
                      
                        	 	
                                Section 6.01

                              	
                                Provisions Relating to
      Exclusivity.

                              	
                                54

                              
	 	
                                Section 6.02

                              	
                                Superior
      Proposal.

                              	
                                58

                              
	 	
                                Section 6.03

                              	
                                Best Efforts; Further
      Assurances.

                              	
                                59

                              

                      

                    

                  

                

              

               

               

              
                
                  
                  

                

                
                  iii

                  
                    

                  

                

                
                  
                  

                

              

            

          

        

         

        
          
            
              
                
                  	 	
                          Section 6.04

                        	
                          Publicity; Securities Law
      Filings.

                        	
                          60

                        
	 	
                          Section 6.05

                        	
                          Confidentiality.

                        	
                          61

                        
	 	
                          Section 6.06

                        	
                          Current Information.

                        	
                          61

                        
	 	
                          Section 6.07

                        	
                          Tax Matters.

                        	
                          61

                        
	 	
                          Section 6.08

                        	
                          Indemnification.

                        	
                          62

                        
	 	
                          Section 6.09

                        	
                          Company Meeting.

                        	
                          63

                        
	 	
                          Section 6.10

                        	
                          Purchaser.

                        	
                          63

                        
	 	
                          Section 6.11

                        	
                          Resignation of Directors and
      Officers.

                        	
                          64

                        

                

              

            

          

        

         

        
          
            	
                    ARTICLE VII CONDITIONS

                  	
                    64

                  

          

        

        

        
          
            
              
                	 	
                        Section 7.01

                      	
                        Condition to the Obligations of the Company,
      Parent and the Purchaser

                      	
                        64

                      
	 	
                        Section 7.02

                      	
                        Conditions to Obligations of Parent and the
      Purchaser.

                      	
                        65

                      
	 	
                        Section 7.03

                      	
                        Conditions to Obligations of the
      Company.

                      	
                        67

                      

              

            

          

        

         

         

        
          
            	
                    ARTICLE VIII TERMINATION, AMENDMENT AND
      WAIVER

                  	
                    69

                  

          

        

        

        
          
            
              
                	 	
                        Section 8.01

                      	
                        Termination by Mutual
    Consent.

                      	
                        69

                      
	 	
                        Section 8.02

                      	
                        Termination by Parent or the
      Company.

                      	
                        69

                      
	 	
                        Section 8.03

                      	
                        Termination for Breach of Representations and
      Warranties.

                      	
                        70

                      
	 	
                        Section 8.04

                      	
                        Termination by Company in Connection with
      Potential Transaction or Superior
      Proposal

                      	
                        71

                      
	 	
                        Section 8.05

                      	
                        Termination by Parent in Certain
      Circumstances

                      	
                        71

                      
	 	
                        Section 8.06

                      	
                        Effect of Termination and
      Abandonment.

                      	
                        71

                      

              

            

          

        

         

        
          
            	
                    ARTICLE IX GENERAL
    PROVISIONS

                  	
                    71

                  

          

        

        

        
          
            
              
                
                  
                    
                      
                        	 	
                                Section 9.01

                              	
                                Waiver.

                              	
                                71

                              
	 	
                                Section 9.02

                              	
                                Survival of Representations and
      Warranties.

                              	
                                72

                              
	 	
                                Section 9.03

                              	
                                Amendments, Modification and
      Waiver.

                              	
                                72

                              
	 	
                                Section 9.04

                              	
                                Notices.

                              	
                                72

                              

                      

                    

                  

                

              

            

          

        

      

       

      
 

      
        
          
          

        

        
          iv

          
            

          

        

        
          
          

        

      

      
         

        
          
            
              
                
                  	 	
                          Section 9.05

                        	
                          Expenses

                        	
                          74

                        
	 	
                          Section 9.06

                        	
                          Severability.

                        	
                          74

                        
	 	
                          Section 9.07

                        	
                          Entire Agreement;
    Assignment.

                        	
                          75

                        
	 	
                          Section 9.08

                        	
                          Parties in Interest.

                        	
                          75

                        
	 	
                          Section 9.09

                        	
                          Interpretation.

                        	
                          75

                        
	 	
                          Section 9.10

                        	
                          Specific Performance.

                        	
                          75

                        
	 	
                          Section 9.11

                        	
                          Governing Law.

                        	
                          75

                        
	 	
                          Section 9.12

                        	
                          Waiver of Jury Trial.

                        	
                          76

                        
	 	
                          Section 9.13

                        	
                          Headings.

                        	
                          76

                        
	 	
                          Section 9.14

                        	
                          Ambiguities.

                        	
                          76

                        
	 	
                          Section 9.15

                        	
                          Counterparts.

                        	
                          76

                        
	 	
                          Section 9.16

                        	
                          Adjustment.

                        	
                          76

                        
	 	
                          Section 9.17

                        	
                          Currency.

                        	
                          77

                        

                

              

            

          

        

         

         

         

        
          
            
            

          

          
            v

            
              

            

          

          
            
            

          

        

         

      

       

      January
23, 2009

       

      ARRANGEMENT
AGREEMENT

       

      
        THIS
ARRANGEMENT AGREEMENT (this “Agreement”) is made as of January 23, 2009 by and
among Tailwind Financial Inc., a Delaware corporation (“Parent”), AV Acquisition
Corp., a corporation incorporated under the Business Corporations Act
(Ontario) and a wholly-owned subsidiary of Parent (“Purchaser”) and
Allen-Vanguard Corporation, a corporation incorporated under the Business Corporations Act
(Ontario) (the “Company”).

      

       

      WHEREAS,
the Boards of Directors of Parent, the Purchaser and the Company have each
approved the terms and conditions of a business combination of the Company and
the Purchaser, upon the terms and subject to the conditions set forth
herein;

       

      WHEREAS,
the business combination of the Company and the Purchaser shall be effected by
the terms of this Agreement through a plan of arrangement, pursuant to section
182 of the OBCA (as defined below), of the Company and the
Purchaser;

       

      WHEREAS,
the Arrangement (as defined below) is intended, among other things, to provide
the Company Shareholders (as defined below) with the opportunity to dispose of
their shares of Company Common Stock (as defined below) in exchange for shares
of Parent Common Stock (as defined below) on the terms and subject to the
conditions set out herein;

       

      WHEREAS,
the Board of Directors of the Company (the “Company Board”) has unanimously (i)
determined that the Arrangement is fair to the Company Shareholders and in the
best interests of the Company, approved this Agreement and declared its
advisability and approved the Arrangement and the other transactions
contemplated by this Agreement, and (ii) resolved to recommend acceptance of the
Arrangement and adoption of this Agreement by the Company Shareholders (as
defined below); and

       

      NOW,
THEREFORE, in consideration of the foregoing and the mutual covenants and
agreements herein contained, and intending to be legally bound hereby, Parent,
the Purchaser and the Company hereby agree as follows:

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

       

      
        

         

        ARTICLE
I

        DEFINITIONS
AND SCHEDULES

      

      
         

         

      

      Section
1.01         Definitions.

       

      
        	
                 
      

              	
                (a)

              	
                For
      purposes of this Agreement:

              

      

       

      “Action” means any
investigation, inquiry, audit, litigation, suit, claim, action, application,
complaint, grievance, or other legal, administrative or arbitration proceeding
of any nature whatsoever.

       

      “Affiliate” of a
specified Person means any other Person who, directly or indirectly through one
or more intermediaries, Controls, is controlled by, or is under common Control
with, such specified Person.

       

      “Annual Financial
Statements” means the audited consolidated financial statements of the
Company as at and for each of the fiscal years ended September 30, 2006,
September 30, 2007 and September 30, 2008, together with the notes thereto and
the auditors’ report thereon.

       

      “Arrangement” means an
arrangement under Section 182 of the OBCA on the terms and subject to the
conditions set out in the Plan of Arrangement, subject to any amendments or
variations thereto made in accordance with Section 9.03 hereof or Article 5 of
the Plan of Arrangement or made at the direction of the Court in the Interim
Order or the Final Order.

       

      “Arrangement
Resolution” means the special resolution of the Company Shareholders
approving the Arrangement.

       

      “Articles of
Arrangement” means the articles of arrangement of the Company in respect
of the Arrangement that are required to be sent to the Director after the Final
Order is made.

       

      “Books and Records”
means all books of account, share registers and other financial and corporate
records, copies of tax records, sales and purchase records, customer and
supplier lists, computer software, formulae, business reports, registers and
operating manuals, plans and projections and all other documents, files,
correspondence and other information (whether in written, printed, electronic or
computer printout form), of the Company and each Company
Subsidiary.

       

      “Business” with
respect to the Company means the business of developing and marketing
proprietary technologies, tools and training used to defeat and minimize the
effects of hazardous devices and materials, whether Chemical, Biological,
Radiological, Nuclear or Explosive (“CBRNE”) and as more fully described in the
Company’s Annual Information Form dated December 29, 2008.

       

      “Business Day” means
any day on which banks are not required or authorized to close in the City of
New York or in the City of Ottawa.

       

      “Canadian Dollars” or
“CAD$” means lawful currency of Canada.

      
        
           

        

        
          - 2
-

          
            

          

        

        
           

        

      

       

      “Canadian Securities
Laws” means all applicable securities laws in the provinces of Canada,
all as now enacted or as the same may from time to time be amended, re-enacted
or replaced, the respective regulations, rules, orders and forms under such laws
and the applicable published policy statements, national instruments, and
multilateral instruments of and any exempting orders issued by the Canadian
Securities Regulators.

       

      “Canadian Securities
Regulators” means the securities commission or other securities
regulatory authority in each of the provinces of Canada.

       

      “Certificate” means a
certificate or certificates representing shares of Company Common
Stock.

       

      “Circular” means the
notice of the Company Meeting, accompanying management proxy circular and forms
of proxy, including all appendices thereto, to be sent to Company Shareholders,
as applicable, in connection with the Company Meeting, as same may be amended
from time to time.

       

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

       

      “Company Common Stock”
means the common shares of the Company, without par value.

       

      
        “Company Financing”
means the issuance by the Company, by way of public rights offering
of  up to 350,877,193 subscription receipts  for a price of
CAD$0.285 per subscription receipt (aggregate proceeds of up to CAD$100 million)
with each subscription receipt being exercisable, without further consideration
and contingent upon completion of the Arrangement, into one share of Company
Common Stock (which will participate in the Arrangement) on the Effective Date
and prior to the Effective Time; provided that such public rights offering must
be completed by March 20, 2009, and must be on terms acceptable to Parent,
acting reasonably.

      

       

      “Company Material Adverse
Effect” means any change, circumstance, occurrence, event, fact or effect
which does not affect the Company disproportionately (a) that has given rise to,
or would reasonably be expected to give rise to, a material adverse change, or
that has had, or would reasonably be expected to have, a material adverse effect
(taken alone or in the aggregate with any other adverse change or effect) in, on
or with respect to the business, results of operations, condition (whether
financial or otherwise), capital or future prospects of the Company and the
Company Subsidiaries as a whole; or (b) that is preventing or materially
impeding, or is reasonably likely to prevent or materially impede, the Company
from performing its obligations under this Agreement; provided, however, that
the above shall not include any event, circumstance, change, occurrence, fact or
effect resulting from or relating to: (i) changes in the North American or
international financial markets in general, (ii) any change in the market price
or trading volume of the Company Common Stock, (iii) changes in general economic
conditions in any region in which the Company or the Company Subsidiaries
operate, (iv) changes in the industry in which the Company and the Company
Subsidiaries operate, (v) the public announcement of this Agreement or the
Transactions,  (vi) any natural disaster or any acts of terrorism,
sabotage, military action or war (whether or not declared) or any escalation or
worsening thereof, or (vii) changes in GAAP.

      
        
           

        

        
          - 3
-

          
            

          

        

        
           

        

      

       

      “Company Meeting”
means the annual and special meeting of the Company Shareholders, including any
adjournment thereof, to be called and held in accordance with the Interim Order,
to consider, among other things, the Arrangement, and for any other proper
purpose as may be set out in the notice for such meeting.

       

      “Company Permit” means
all franchises, grants, authorizations, licenses, certifications, permits,
easements, variances, exceptions, consents, certificates, approvals and orders
of any Governmental Authority necessary for each of the Company and the Company
Subsidiaries to own, lease and operate its properties or to carry on its
business as it is now being conducted and proposed to be conducted after the
Effective Time.

       

      “Company Reports”
means all forms, reports, statements, schedules and other documents required to
be filed by the Company and the Company Subsidiaries with the Canadian
Securities Regulators, whether filed prior to or subsequent to the date
hereof.

       

      “Company RSUs” means
the Restricted Share Units issued from time to time under the Company RSU Plan
and outstanding.

       

      “Company RSU Plan”
means the Restricted Share Unit Plan established on September 21, 2007, as
amended to date and as they may be further amended from time to time as
expressly permitted by this Agreement.

       

      “Company Shareholders”
means the holders of Company Common Stock.

       

      “Company Stock
Options” means, at any time or times, the options to purchase shares of
Company Common Stock, granted under the Company Stock Option Plans, whether or
not exercisable and whether or not vested, being outstanding and unexercised, at
such time or times.

       

      “Company Stock Option
Plans” means, collectively, the Stock Option Plan established on
September 21, 2007 and the Non-Employee Director Stock Option Plan established
on September 21, 2007, in each case as amended to date and as they may be
further amended from time to time as expressly permitted by this
Agreement.

       

      “Company Subsidiaries”
means the Subsidiaries of the Company set out on Schedule 3.01 and any other
Subsidiaries of the Company from time to time.

       

      “Company Warrants”
means the warrants issued by the Company to the Company Warrantholders, as
detailed on Schedule 3.05.

       

      “Company
Warrantholders” means the holders of Company Warrants.

       

      “Confidentiality
Agreement” means the confidentiality agreement between Parent and the
Company dated October 29, 2008.

       

      “Contamination” means
the presence of, or Release on, under, from or to the environment of any
Hazardous Substance, except the routine storage and use of Hazardous Substances
from time to time in the ordinary course of business, in compliance with
Environmental Laws.

      
        
           

        

        
          - 4
-

          
            

          

        

        
           

        

      

       

      “Control” (including
the terms “controlled
by” and “under
common control with”) means the possession, directly or indirectly, or as
trustee or executor, of the power to direct or cause the direction of the
management and policies of a Person, whether through the ownership of voting
securities, as trustee or executor, by contract or credit arrangement or
otherwise.

       

      “Court” means the
Superior Court of Justice (Ontario).

       

      “DGCL” means the
Delaware General Corporation Law.

       

      “Director” means the
Director appointed pursuant to Section 278 of the OBCA.

       

      “Dissent Rights” means
the rights of holders of Company Common Stock to dissent in respect of the
Arrangement as described in Section 3.1 of the Plan of Arrangement.

       

      “Dissenting
Shareholder” means a holder of Company Common Stock who duly exercises
Dissent Rights in respect of the shares of Company Common Stock held by such
holder.

       

      “Drop Dead Date” means
April 17, 2009 or such later date as may be mutually agreed by the parties to
this Agreement.

       

      “Effective Date” means
the date shown on the certificate of arrangement to be issued by the Director
under the OBCA giving effect to the Arrangement.

       

      “Effective Time” means
12:01 a.m. (Toronto time) on the Effective Date.

       

      “Environmental Laws”
means any Law, permit, authorization and opinion relating to: (A) the
environment, human health or safety associated with the environment, or natural
resources; (B) the handling, use, presence, disposal, release or threatened
release of any Hazardous Substance; or (C) noise, odour, wetlands, pollution,
Contamination or any injury or threat of injury to persons or
property.

       

      “Exchange Act” means
the United States Securities Exchange Act of 1934, as amended, and the rules,
regulations and related notices thereunder.

       

      “Exchange Rate” means
the rate posted by the Bank of Canada for one CAD$ expressed in U.S.$ at noon on
the Business Day immediately preceding the Effective Date.

       

      “Exchange Ratio” means
0.046492659 multiplied by the
Exchange Rate.

       

      “Exercise Date” means
the date that is two Business Days prior to the Effective Date.

      
        
           

        

        
          - 5
-

          
            

          

        

        
           

        

      

       

      “Final Order” means
the final order of the Court approving the Arrangement as such order may be
amended by the Court at any time prior to the Effective Date or, if appealed,
then, unless such appeal is withdrawn or denied, as affirmed.

       

      “Financial Statements”
means, collectively, the Annual Financial Statements and the Third Quarter
Financial Statements.

       

      “Generally Accepted
Accounting Principles” or “GAAP” means those
accounting principles which are recognized as being generally accepted in Canada
by the Canadian Institute of Chartered Accountants from time to time, as set out
in the Handbook published by the Canadian Institute of Chartered Accountants, as
amended from time to time.

       

      “Governmental
Authority” means: (i) any domestic or foreign, national, federal,
provincial, state, county, local, municipal or regional government or body; (ii)
any multinational, multilateral or international body; (iii) any subdivision,
agency, commission, board, instrumentality or authority of any of the foregoing
governments or bodies; (iv) any quasi-governmental or private body exercising
any regulatory, expropriation or taxing authority under or for the account of
any of the foregoing governments or bodies; (v) any domestic, foreign,
international, multilateral or multinational judicial, quasi-judicial,
arbitration or administrative court, tribunal, adjudicator, commission, board or
panel; or (vi) any person employed by, acting for, or on behalf of, any of the
foregoing bodies.

       

      “Hazardous Substances”
means: (A) any hazardous substance, pollutant or contaminant, as such terms are
defined under any Environmental Law; (B) any petroleum or petroleum product or
by-product, asbestos or asbestos-containing material, urea-formaldehyde,
lead-containing paint or plumbing, polychlorinated biphenyls, radioactive
materials or radon; and (C) any other substance which is the subject of
regulatory action by any Governmental Authority pursuant to or could give rise
to Liability under any Environmental Law.

       

      “Indebtedness” means,
as of a given time, (i) all indebtedness for borrowed money or for the deferred
purchase price of property or services in respect of which the Company or any of
the Company Subsidiaries is liable, contingently or otherwise, as obligor or
otherwise, and any commitment by which the Company or any of the Company
Subsidiaries assures a creditor against loss, including contingent reimbursement
obligations with respect to letters of credit; (ii) all indebtedness guaranteed
in any manner by the Company or any of the Company Subsidiaries, including a
guarantee in the form of an agreement to repurchase or reimburse; (iii) all
obligations under capitalized leases in respect of which the Company or any of
the Company Subsidiaries is liable, contingently or otherwise, as obligor,
guarantor or otherwise, or in respect of which obligations the Company or any of
the Company Subsidiaries assures a creditor against loss; and (iv) all interest,
prepayment penalties, premiums, fees and expenses (if any)
thereon.

      
        
           

        

        
          - 6
-

          
            

          

        

        
           

        

      

       

      “Intellectual Property
Right” means any trademark, service mark, registration thereof or
application for registration therefore, trade name, license, invention, patent,
patent application, industrial designs, trade secret, trade dress, know-how,
copyright, copyrightable materials, copyright registration, application for
copyright registration, software programs and data bases, names (including
“Allen-Vanguard”) and all derivations thereof, domain name and any other type of
proprietary intellectual property right, and all embodiments and fixations
thereof and related documentation, registrations and franchises and all
additions, improvements and accessions thereto, in each case which is owned or
licensed or filed by the Company, any Company Subsidiary or any of their
Affiliates or used or held for use in the Business, whether registered or
unregistered or domestic or foreign.

       

      “Interim Order” means
the interim order of the Court, as the same may be amended, in respect of the
Arrangement, as contemplated by 2.02.

       

      “ITA” means the Income Tax Act (Canada) and
the regulations thereunder, as amended from time to time.

       

      “Laws” means all laws,
statutes, codes, ordinances, decrees, consent decrees, rules, regulations,
by-laws, statutory rules, policies, judicial or arbitral or administrative or
ministerial or departmental or judgments, Privacy Laws, orders, decisions,
rulings, letters of finding or awards, agency requirements, including general
principles of common and civil law, and terms and conditions of any grant of
approval, permission, authority or license of any Governmental Authority,
statutory body or self-regulatory authority, and the term “applicable” with
respect to such Laws and in the context that refers to one or more Persons,
means that such Laws apply to such Person or Persons or its or their business,
undertaking, property or securities and emanate from a Governmental Authority
having jurisdiction over the Person or Persons or its or their business,
undertaking or securities.

       

      “Liabilities” means
any direct or indirect liability, indebtedness, obligation, commitment, expense,
claim, guaranty or endorsement of or by any Person of any type, whether accrued,
absolute, contingent, matured, unmatured or other, and without limiting the
foregoing, includes an obligation to respond to an Order.

       

      “Liens” means all
mortgages, pledges, liens, security interests, conditional and installment sale
agreements, encumbrances, charges, claims or rights of third parties of any
kind, including, without limitation, any option, agreement, right of first
refusal or right of first offer or limitation on voting rights.

       

      “Med-Eng Settlement
Amount” means any after-tax amounts paid by the  former
shareholders of Med-Eng Systems, Inc., an Ontario corporation acquired by the
Company, in connection with the Action described in Schedule 3.10.

       

      “Misrepresentation”
shall have the meaning attributed to such term in the OSA.

      
         

        “OBCA” means the Business Corporations Act
(Ontario) and the regulations thereunder as in effect as of the date hereof and
as may be amended from time to time prior to the Effective
Time.

      

      
        
           

        

        
          - 7
-

          
            

          

        

        
           

        

      

       

      “Order” means any
legally enforceable judgment, order, decision, writ, injunction, stipulation,
ruling or decree of, or any settlement under jurisdiction of, any Governmental
Authority.

       

      “OSA” means the Securities Act (Ontario), as
in effect as of the date hereof and as may be amended from time to time prior to
the Effective Date.

       

      
        “Parent Common Stock”
means the common stock of Parent, par value U.S. $0.001 per share, currently
listed on the NYSE Alternext US.

      

       

      “Parent Material Adverse
Effect” means any change, circumstance, occurrence, event, fact or effect
(a) that is preventing or materially impeding, or is reasonably likely to
prevent or materially impede, Parent from performing its obligations under this
Agreement; provided, however, that the above shall not include any event,
circumstance, change, occurrence, fact or effect resulting solely from or
relating solely to: (i) changes in the North American or international financial
markets in general, (ii) any change in the market price or trading volume of
Parent Common Stock, (iii) changes in general economic conditions in any region
in which Parent or its Subsidiaries operate, (iv) changes in the industry in
which Parent and its Subsidiaries operate, (v) the public announcement of this
Agreement or the Transactions, (vi) any natural disaster or any acts of
terrorism, sabotage, military action or war (whether or not declared) or any
escalation or worsening thereof, or (vii) changes in U.S. GAAP.

       

      “Permitted Liens”
means, in respect of the Company and any of the Company Subsidiaries, (A)
statutory liens for current Taxes and assessments or other governmental charges
not yet due and payable, or the amount or validity of which is being contested
in good faith, by the Company or such Company Subsidiary, as the case may be and
for which a reserve has been established by the Company or such Company
Subsidiary on its Books and Records, and (B) mechanics’, materialmen’s,
workmen’s, repairmen’s, warehousemen’s and carriers’ liens and other similar
statutory liens arising in the ordinary course of business of the Company or
such Company Subsidiary consistent with past practice, (C) zoning, entitlement,
building and other land-use regulations imposed by governmental agencies having
jurisdiction over real property which are not violated by the current use and
operation of the real property, and (D) covenants, conditions, restrictions,
easements and other similar matters of record affecting title to the real
property which do not materially impair the occupancy or use of the real
property for the purposes for which it is currently used.

       

      “Person” shall be
broadly interpreted and includes any natural person, legal person, partnership,
limited partnership, joint venture, unincorporated association or other
organization, trust, trustee, executor, administrator or liquidator, regulatory
body or agency, government or governmental agency, authority or entity, however
designated or constituted and whether or not a legal entity.

       

      “Personal Information”
means information about an identifiable individual.

      
        
           

        

        
          - 8
-

          
            

          

        

        
           

        

      

       

      “Plan of Arrangement”
means the plan of arrangement substantially in the form and content of Annex I
annexed hereto and any amendments or variations thereto made in accordance with
Section 9.03 hereof or Article 5 of the Plan of Arrangement or made at the
direction of the Court in the Final Order.

       

      “Privacy Laws” means
all laws, statutes, codes, ordinances, decrees, consent decrees, rules,
regulations, by-laws, statutory rules, letters of finding, policies, judicial or
arbitral or administrative or ministerial or departmental or judgments, orders,
decisions, rulings or awards, agency requirements relating to the protection of
privacy and the processing of Personal Information, including general principles
of common and civil law, policies and guidelines of applicable Governmental
Authorities, and terms and conditions of any grant of approval, permission,
authority or license of any Governmental Authority, statutory body or
self-regulatory authority.

       

      “Purchaser Parties”
means, collectively, Parent and the Purchaser.

       

      “Recommendation” means
the recommendation of the Company Board to the Company Shareholders that the
Company Shareholders vote in favour of the Arrangement Resolution, the
acceptance of the Arrangement, and the adoption of this Agreement.

       

      “Release” means any
presence, emission, spill, seepage, leak, escape, leaching, discharge,
injection, pumping, pouring, emptying, dumping, disposal, migration or release
of a Hazardous Substance from any source into or upon the environment, including
the air, soil, improvements, surface water, groundwater, the sewer, septic
system, storm drain, publicly-owned treatment works, or waste treatment, storage
or disposal systems.

       

      “Remediation” means
any investigation, clean-up, removal action, remedial action, restoration,
repair, response action, corrective action, monitoring, sampling, and analysis,
installation, reclamation, closure or post-closure in connection with the
suspected, threatened or actual Release of Hazardous Substances.

       

      “SEC” means the United
States Securities and Exchange Commission.

       

      “Securities Act” means
the United States Securities Act of 1933, as amended and the rules, regulations
and related notices thereunder.

       

      
        “Securities
Legislation” means the Securities Act, the Exchange Act and the Canadian
Securities Laws, all as now enacted or as the same may from time to time be
amended, re-enacted or replaced, and the applicable rules, regulations, rulings,
orders and forms made or promulgated under such statutes and the published
policies of the regulatory authorities administering such statutes, as well as
the rules, regulations, by-laws and policies of the TSX and the NYSE Alternext
US.

      

       

      “Subsidiary” or “Subsidiaries” of a
Person means any corporation, partnership, joint venture or other legal entity
of which such Person (a) owns, directly or indirectly, 50% or more of the
outstanding common stock, limited partnership or member interests or other
equity interests, or otherwise has a financial interest of 50% or more thereof,
or (b) is or Controls a general partner or other managing body of such legal
entity.

      
        
           

        

        
          - 9
-

          
            

          

        

        
           

        

      

       

      “Tax” or “Taxes” means any and
all taxes, surtaxes, fees, levies, duties, tariffs, imposts, withholdings and
other charges of any kind (together with any and all interest, fines, penalties,
additions to tax and additional amounts imposed with respect thereto) imposed by
any Governmental Authority or taxing authority, including, without limitation:
taxes or other charges on or with respect to income, franchise, windfall or
other profits, net worth, gross receipts, property, sales, use, capital stock,
payroll, employment, social security, health, Canada Pension Plan and provincial
pension plan contributions, workers’ compensation or employment insurance and
unemployment insurance premiums or compensation; taxes or other charges in the
nature of excise, withholding, ad valorem, stamp, transfer, value-added or gains
taxes; license, registration and documentation fees; and customers’ duties,
tariffs and similar charges; and including any Liability in respect of any item
described above as a transferee or successor, pursuant to U.S. Treasury
Regulation Section 1.1502-6 (or any similar provision of state, local or foreign
Law), or as an indemnitor, guarantor, surety or in a similar capacity under any
contract, arrangement, agreement, understanding or commitment (whether oral or
written).

       

      “Tax Returns” means
all returns, reports, declarations, designations, schedules, notices, forms,
elections, information statements, remittances and similar statements (including
estimated Tax returns, claims for refunds, amended returns and reports and
information returns and reports and any attachments thereto) with respect to
Taxes filed or required to be filed with any taxing authority, domestic or
foreign.

       

      “Third Quarter Financial
Statements” means the unaudited consolidated financial statements of the
Company for the nine months ended June 30, 2008, together with the notes
thereto.

       

      “Transaction
Documents” means this Agreement, and all other agreements and documents
contemplated hereunder, executed herewith or required to implement or give
effect to the Transactions.

       

      “Transactions” means
the transactions contemplated by this Agreement, the Plan of Arrangement and by
any of the Transaction Documents, and including, for greater certainty, the
Arrangement.

       

      “TSX” means the
Toronto Stock Exchange.

       

      “United States Dollars” or
“U.S.$” means lawful currency of the United States.

       

      “U.S. GAAP” means U.S.
generally accepted accounting principles, consistently applied.

       

      “U.S. Securities Laws”
means the Securities Act and the Exchange Act.

      
        
           

        

        
          - 10
-

          
            

          

        

        
           

        

      

       

      “U.S. Securities
Regulators” means the SEC or any state securities regulatory authority in
the United States.

       

      (b)           The
following additional terms have the meanings given to such terms in the
corresponding sections of this Agreement:

       

      
        
          	
                  SECTION

                	 	
                  DEFINED TERM

                
	 
      	 	 
      
	
                  Section
      6.02(d)

                	 	
                  Acquisition
      Proposal

                
	
                  Section
      2.10(b)(i)

                	 	
                  Adjusted
      RSUs

                
	
                  Section
      3.08(c)

                	 	
                  Approvals

                
	
                  Section
      6.01(g)

                	 	
                  Break
      Fee

                
	
                  Section
      4.04

                	 	
                  Charter
      Documents

                
	
                  Section
      9.01

                	 	
                  Claim

                
	
                  Section
      6.01(c)

                	 	
                  Company
      Representatives

                
	
                  Section
      3.21(a)

                	 	
                  Company
      Schedules

                
	
                  Section
      6.07

                	 	
                  Effective
      Date Period

                
	
                  Section
      3.17(c)

                	 	
                  Environmental
      Permits

                
	
                  Section
      6.01(a)

                	 	
                  Exclusivity
      Period

                
	
                  Section
      6.08(a)

                	 	
                  Indemnified
      Parties

                
	
                  Section
      3.12(a)

                	 	
                  Key
      Employees

                
	
                  Section
      3.14(d)

                	 	
                  Leases

                
	
                  Section
      3.11(a)

                	 	
                  Material
      Contracts

                
	
                  Section
      2.06(a)

                	 	
                  Other
      U.S. Filings

                
	
                  Section
      4.11

                	 	
                  Parent
      Financial Statements

                
	
                  Section
      6.01(d)

                	 	
                  Parent
      Group Representatives

                
	
                  Section
      4.20(a)

                	 	
                  Parent
      SEC Documents

                
	
                  Section
      2.05(a)

                	 	
                  Parent
      Stockholders

                
	
                  Section
      2.05(a)

                	 	
                  Parent
      Stockholders Meeting

                
	
                  Section
      2.05(a)

                	 	
                  Parent
      Stockholder Proposals

                
	
                  Section
      3.12(e)

                	 	
                  Plans

                
	
                  Section
      6.01(c)

                	 	
                  Potential
      Transaction

                
	
                  Section
      6.01(d)

                	 	
                  Potential
      Alternative Transaction

                
	
                  Section
      9.01

                	 	
                  Prospectus

                
	
                  Section
      2.06(a)

                	 	
                  Proxy
      Statement

                
	
                  Section
      6.01(h)

                	 	
                  Reimbursement
      Fee

                
	
                  Section
      3.11(a)

                	 	
                  Related
      Party Agreement

                
	
                  Section
      9.01

                	 	
                  Released
      Interest

                
	
                  Section
      3.11(a)

                	 	
                  Restrictive
      Agreement

                
	
                  Section
      6.02(e)

                	 	
                  Superior
      Proposal

                
	
                  Section
      8.02(a)

                	 	
                  Termination
      Date

                
	
                  Section
      4.10(b)

                	 	
                  Trust
      Account

                
	
                  Section
      4.10(b)

                	 	
                  Trust
      Fund

                
	
                  Section
      4.10(b)

                	 	
                  Trustee

                

        

      

      
        
           

        

        
          - 11
-

          
            

          

        

        
           

        

      

       

      Section
1.02         Schedules

      

      The
following Schedules are annexed to this Agreement and are incorporated by
reference into this Agreement and form a part hereof:

      

      
        
          
            
              	
                      SECTION

                    	 	
                      Schedule

                    
	 
      	 	 
      
	
                      Annex
      I

                    	 	
                      Plan
      of Arrangement

                    
	
                      3.01

                    	 	
                      Company
      Subsidiaries, Jurisdiction and Location

                    
	
                      3.04(a)

                    	 	
                      Required
      Contractual Consents and Notices

                    
	
                      3.05

                    	 	
                      Capitalization

                    
	
                      3.06(a)

                    	 	
                      Securities
      Laws Non-Compliance

                    
	
                      3.06(c)

                    	 	
                      Securities
      Laws Investigations

                    
	
                      3.08(b)

                    	 	
                      Permits;
      Compliance

                    
	
                      3.09

                    	 	
                      Company
      Material Adverse Changes

                    
	
                      3.10

                    	 	
                      Litigation

                    
	
                      3.11(a)(A)

                    	 	
                      Oral
      Material Contracts

                    
	
                      3.11(a)(B)

                    	 	
                      Written
      Material Contracts

                    
	
                      3.12(a)

                    	 	
                      Employee
      Matters

                    
	
                      3.12(b)

                    	 	
                      Outstanding
      Employee Claims

                    
	
                      3.12(e)

                    	 	
                      Employee
      Plans

                    
	
                      3.13

                    	 	
                      Customers

                    
	
                      3.14(d)

                    	 	
                      Real
      Property Leases

                    
	
                      3.15(a)

                    	 	
                      List
      of Intellectual Property

                    
	
                      3.15(b)

                    	 	
                      Intellectual
      Property Claims

                    
	
                      3.16(a)

                    	 	
                      Delinquent
      Tax Filings

                    
	
                      3.16(b)

                    	 	
                      Delinquent
      Tax Remittances

                    
	
                      3.16(f)

                    	 	
                      Material
      Liability for Taxes

                    
	
                      3.16(h)

                    	 	
                      Tax
      Assessments or Re-Assessments

                    
	
                      3.16(j)

                    	 	
                      Tax
      Waiver, Extension, Rulings, or Extra-Jurisdictional
    Liability

                    
	
                      3.16(l)

                    	 	
                      Transfer
      Pricing Compliance

                    
	
                      3.24

                    	 	
                      Product
      Warranty; Product Liability

                    
	
                      4.01

                    	 	
                      Due
      Incorporation, Assets and Liabilities of Purchaser
  Parties

                    
	
                      4.03

                    	 	
                      Parent
      Governmental Authorization

                    
	
                      4.08

                    	 	
                      Fees

                    
	
                      4.10

                    	 	
                      Capitalization
      and Ownership of the Parent, Trust Fund

                    
	
                      4.12

                    	 	
                      Contracts,
      Payments on Change of Control

                    
	
                      6.01(b)

                    	 	
                      List
      of Parties to Potential Transaction

                    
	
                      6.11

                    	 	
                      New
      Directors and Officers

                    
	
                      6.12

                    	 	
                      Parent’s
      Board Nominees

                    
	
                      7.02(k)(A)

                    	 	
                      Persons
      Delivering Lock-Up Agreements

                    
	
                      7.02(k)(B)

                    	 	
                      Form
      of Lock-Up
Agreements

                    

            

          

        

      

      
        
           

        

        
          - 12
-

          
            

          

        

        
           

        

      

       

      ARTICLE
II

      ARRANGEMENT

       

      Section
2.01         Implementation Steps by the
Company.

       

      Subject
to the terms of this Agreement, the Company covenants in favour of Parent and
the Purchaser that the Company shall:

       

      
        	
                 
      

              	
                (a)

              	
                As
      soon as reasonably practical after execution and delivery of this
      Agreement and the preparation of a substantially-completed Circular in
      accordance with Section 2.04, and in cooperation with Parent’s counsel,
      apply in a manner acceptable to Parent and the Purchaser, acting
      reasonably, under Section 182 of the OBCA for an order approving the
      Arrangement and the Interim Order, and thereafter proceed with and
      diligently seek to obtain the Interim Order and complete the
      Arrangement;

              

      

       

      
        	
                 
      

              	
                (b)

              	
                Convene
      and hold the Company Meeting for the purpose of considering the
      Arrangement Resolution (and for any other proper purpose as may be set out
      in the notice for such meeting with the prior approval of Parent acting
      reasonably), in accordance with the Interim
  Order;

              

      

       

      
        	
                 
      

              	
                (c)

              	
                Include
      the Recommendation in the Circular (which Recommendation, for greater
      certainty, shall be subject to the provisions of Section
      6.02);

              

      

       

      
        	
                 
      

              	
                (d)

              	
                Subject
      to obtaining the approvals as are required by the Interim Order, proceed
      with and diligently pursue the application to the Court for the Final
      Order; and

              

      

       

      
        	
                 
      

              	
                (e)

              	
                Subject
      to obtaining the Final Order and the satisfaction or waiver of the other
      conditions herein contained in favour of each party, send to the Director,
      for endorsement and filing by the Director, the Articles of Arrangement
      and such other documents as may be required in connection therewith under
      the OBCA to give effect to the
Arrangement.

              

      

       

      Section
2.02         Interim
Order.

       

      The
notice of motion for the application referred to in Section 2.01(a) shall
request that the Interim Order provide:

      
        
           

        

        
          - 13
-

          
            

          

        

        
           

        

      

       

      
        	
                 
      

              	
                (a)

              	
                For
      the class of Persons to whom notice is to be provided in respect of the
      Arrangement and the Company Meeting and for the manner in which such
      notice is to be provided;

              

      

       

      
        	
                 
      

              	
                (b)

              	
                That
      the requisite approval for the Arrangement Resolution shall be 66-2/3% of
      the votes cast on the Arrangement Resolution by the Company Shareholders,
      voting as a separate class, present in person or by proxy at the Company
      Meeting; such that each Company Shareholder is entitled to one vote for
      each share of Company Common Stock held, or such other majority as may be
      approved by the Court;

              

      

       

      
        	
                 
      

              	
                (c)

              	
                That,
      in all other respects, the terms, restrictions and conditions of the
      by-laws and articles of the Company, including quorum requirements and all
      other matters, shall apply in respect of the Company
    Meeting;

              

      

       

      
        	
                 
      

              	
                (d)

              	
                For
      the grant of the Dissent Rights;

              

      

       

      
        	
                 
      

              	
                (e)

              	
                That
      each Company Shareholder will have the right to appear before the Court at
      the hearing of the Court to approve the Final Order so long as such
      Company Shareholder enters an appearance within a reasonable time;
      and

              

      

       

      
        	
                 
      

              	
                (f)

              	
                For
      the notice requirements respecting the presentation of the application to
      the Court for a Final Order.

              

      

       

      Section
2.03         Articles of
Arrangement.

       

      The
Articles of Arrangement shall, with such other matters as are necessary to
effect the Arrangement, and all as subject to the provisions of the Plan of
Arrangement, implement the Plan of Arrangement.

      
        
           

        

        
          - 14
-

          
            

          

        

        
           

        

      

       

      Section
2.04         Company’s
Circular

       

      
        	
                 
      

              	
                (a)

              	
                As
      promptly as practicable after the execution and delivery of this
      Agreement, the Company and its legal counsel shall prepare the Circular,
      which shall include information provided by Parent regarding the
      disclosure required to be provided in respect of the Purchaser Parties in
      accordance with applicable Securities Legislation and the OBCA, which
      Parent agrees to provide promptly upon request, together with any other
      documents required by Securities Legislation and other applicable Laws or
      the Interim Order in connection with the Arrangement, and as promptly as
      practicable after the date of execution of this Agreement, the Company
      shall cause the Circular and any other documentation required in
      connection with the Company Meeting to be sent to each Company Shareholder
      and to be filed as required by the Interim Order, applicable Securities
      Legislation and the OBCA.  The Circular together with any other
      documents required by Securities Legislation and the OBCA shall be in form
      and substance satisfactory to Parent, acting reasonably. The Company will
      cause the Circular to provide adequate notice advising the Company
      Shareholders of their right to attend the hearing of the Court to give
      approval of the Arrangement and provide them with sufficient information
      necessary for them to exercise that
right.

              

      

       

      
        	
                 
      

              	
                (b)

              	
                The
      Company and Parent each shall, upon request by the other, furnish the
      other with all information concerning itself, its Subsidiaries, directors,
      executive officers and stockholders and such other matters as may be
      reasonably necessary or advisable in connection with the Circular or any
      other statement, filing, notice or application made by or on behalf of the
      Purchaser Parties, the Company or any of their respective Subsidiaries to
      any third party and/or any Governmental Authority in connection with the
      Arrangement and the Transactions.

              

      

       

      
        	
                 
      

              	
                (c)

              	
                Without
      limiting the generality of the foregoing, the Company will ensure that the
      Circular provides the Company Shareholders with information in sufficient
      detail to permit them to form a reasoned judgment concerning the matters
      to be placed before them at the Company Meeting and to allow Parent to
      rely upon the exemption from registration provided under subsection
      3(a)(10) of the Securities Act with respect to the issuance of Parent
      Common Stock in exchange for the Company Shares pursuant to the
      Transactions.

              

      

       

      Section
2.05         Parent’s Stockholder
Meeting

       

      
        	
                 
      

              	
                (a)

              	
                
                  Parent
      shall (i) take all steps necessary to duly call, give notice of, convene
      and hold a meeting of the stockholders of Parent (the “Parent Stockholders
      Meeting”) for the purpose of securing the approval of Parent’s
      stockholders (the “Parent Stockholders”) of, among other things (1) the
      issuance of the shares of Parent Common Stock to the Company Shareholders
      in connection with the Arrangement, (2) an increase in the number of
      shares of common stock that Parent is authorized to issue, if required (3)
      the approval of the change of name of Parent to “Allen-Vanguard
      Corporation”, (4) the amendment to the Certificate of Incorporation of
      Parent to remove various provisions that are specific to SPACs, and (5)
      the adoption of the Company RSU Plan and the Company Warrants
      (collectively, the “Parent Stockholder Proposals”); (ii) recommend to the
      Parent Stockholders the approval of the Parent Stockholder Proposals and
      the Transactions and use commercially reasonable efforts to obtain, as
      promptly as practicable, such approvals, and (iii) cooperate and consult
      with the Company with respect to each of the foregoing matters. Parent
      shall provide notice to the Company of the Parent Stockholders Meeting and
      allow Company’s representatives to attend the Parent Stockholders
      Meeting.

                

              

      

       

      
        
           

        

        
          - 15
-

          
            

          

        

        
           

        

      

       

      
        	
                 
      

              	
                (b)

              	
                The
      board of directors of Parent will recommend to the Parent Stockholders the
      approval of the Parent Stockholder Proposals and the Transactions and
      Parent, in its capacity as the sole stockholder of the Purchaser, has
      approved and adopted this Agreement and the Transactions by the execution
      of a written consent of sole stockholder in lieu of a meeting. Parent and
      its board of directors shall not withdraw, amend, modify or qualify the
      recommendation  of the Parent Stockholder Proposals (or announce
      its intention to do so).

              

      

       

      Section
2.06         Parent Proxy
Statement.

       

      
        	
                 
      

              	
                (a)

              	
                As
      promptly as practicable after the execution of this Agreement, Parent will
      prepare a Proxy Statement in connection with the Parent Stockholders
      Meeting (the “Proxy Statement”). Parent will consult with the Company with
      respect to the preparation of the Proxy Statement and in connection with,
      and will respond to, any comments of the SEC and will use its best efforts
      to have the Proxy Statement cleared by the SEC, and the respective rules
      and regulations promulgated thereunder, as promptly as practicable after
      its filing, and Parent will cause the Proxy Statement to be mailed to its
      stockholders at the earliest practicable time. As promptly as practicable
      after the date of this Agreement, Parent will prepare and file any other
      filings required to be filed by it under the Exchange Act, and the rules
      and regulations promulgated thereunder, the Securities Act or any other
      U.S. federal or state laws relating to the Arrangement and the
      Transactions (the “Other U.S. Filings”). Parent will notify the Company
      promptly upon the receipt of any comments from the SEC or its staff or any
      other government officials and of any request by the SEC or its staff or
      any other government officials for amendments or supplements to the Proxy
      Statement or any Other U.S. Filings or for additional information and will
      supply the Company with copies of all correspondence between Parent or any
      of its representatives, on the one hand, and the SEC, or its staff or any
      other government officials, on the other hand, with respect to the Proxy
      Statement, the Arrangement, the Transactions or any Other U.S. Filings.
      Parent will cause all documents that it is responsible for filing with the
      SEC or other regulatory authorities under this Section 2.06 to comply in
      all material respects with all applicable requirements of Law and the
      rules and regulations promulgated thereunder. Whenever any event occurs
      which is required to be set forth in an amendment or supplement to the
      Proxy Statement or any Other U.S. Filings, Parent will promptly inform the
      Company of such occurrence and cooperate in filing with the SEC or its
      staff or any other government officials, and/or mailing to the Parent
      Stockholders, such amendment or supplement. The Proxy Statement together
      with any other documents required by Securities Legislation and shall be
      in form and substance satisfactory to the Company, acting
      reasonably.

              

      

       

      
        
           

        

        
          - 16
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                (b)

              	
                The
      Company shall, upon request by Parent, furnish Parent with all information
      concerning itself, its Subsidiaries, directors, executive officers and
      stockholders and such other matters as may be reasonably necessary or
      advisable in connection with the Proxy Statement or any other statement,
      filing, notice or application made by or on behalf of the Purchaser
      Parties or any of their respective Subsidiaries to any third party and/or
      any Governmental Authority in connection with the Arrangement and the
      Transactions.

              

      

       

      
        	
                 
      

              	
                (c)

              	
                The
      Company shall indemnify and hold harmless the Purchaser and its directors
      and officers from and against all claims, damages, liabilities, actions or
      demands to which they may become subject insofar as such claims, damages,
      liabilities, actions or demands arise out of or are based upon the
      information provided by the Company and included in the Proxy Statement or
      any amendment thereto; provided however that, notwithstanding the
      foregoing, the Company shall have no liability or obligation under this
      paragraph (c) in the event that such information shall have been modified
      in any way, or reproduced in any manner other than that provided by the
      Company, without its prior written
consent.

              

      

       

      Section
2.07         Preparation of
Filings.

       

      
        	
                 
      

              	
                (a)

              	
                Each
      of Parent, Purchaser and the Company shall cooperate and use its
      reasonable commercial efforts in:

              

      

       

      
        	
                 
      

              	
                (i)

              	
                the
      preparation and filing of any application and any other documents
      reasonably deemed by Parent or the Company to be necessary to discharge
      their respective obligations under Securities Legislation, the DGCL and
      the OBCA in connection with the Arrangement and the
      Transactions;

              

      

       

      
        	
                 
      

              	
                (ii)

              	
                the
      taking of all such action as may be required under any applicable
      Securities Legislation in connection with the Arrangement;
    and

              

      

      
        
           

        

        
          - 17
-

          
            

          

        

        
           

        

      

       

      
        	
                 
      

              	
                (iii)

              	
                the
      taking of all such action as may be required under the DGCL and the OBCA
      in connection with the
Transactions.

              

      

       

      
        	
                 
      

              	
                (b)

              	
                Each
      of Parent and the Company shall furnish to the other all such information
      concerning it and its stockholders as may be required (and, in the case of
      its stockholders, available to it) for the effecting of the actions
      described in Section 2.04 and Section 2.06 and the foregoing provisions of
      this Section 2.07 and the obtaining of all regulatory approvals required
      by Section 7.01(d), and each covenants that no information furnished by it
      (to its knowledge in the case of information concerning its stockholders)
      in connection with such actions will contain any untrue statement of a
      material fact or omit to state a material fact required to be stated in
      any such document or necessary in order to make any information so
      furnished for use in any such document not misleading in light of the
      circumstances in which it is
furnished.

              

      

       

      
        	
                 
      

              	
                (c)

              	
                Each
      of Parent and the Company shall promptly notify each other if, at any time
      before or after the Effective Time, it becomes aware that the Circular or
      the Proxy Statement, as the case may be, contains any untrue statement of
      a material fact or omits to state a material fact required to be stated
      therein or necessary to make the statements contained therein not
      misleading in light of the circumstances in which they are made, or that
      otherwise requires an amendment or supplement to the Circular or the Proxy
      Statement, as the case may be.  In any such event, the Company
      or Parent, as the case may be, shall (with the cooperation and assistance
      of the other) prepare a supplement or amendment to the Circular or the
      Proxy Statement, as the case may be, or such other document, as required
      and as the case may be, and, if required, shall cause the same to be
      distributed to the Company Shareholders or the Parent Stockholders, as the
      case may be and/or filed with the relevant securities regulatory
      authorities.

              

      

       

      
        	
                 
      

              	
                (d)

              	
                The
      Purchaser Parties shall indemnify and hold harmless the Company and its
      directors and officers from and against all claims, damages, liabilities,
      actions or demands to which they may become subject insofar as such
      claims, damages, liabilities, actions or demands arise out of or are based
      upon the information provided by the Purchaser Parties and included in the
      Circular or any amendment thereto in order to comply with Securities
      Legislation and the OBCA; provided however that, notwithstanding the
      foregoing, the Purchaser Parties shall have no liability or obligation
      under this paragraph (d) in the event that such information shall have
      been modified in any way, or reproduced in any manner other than that
      provided by a Purchaser Party, without its prior written
      consent.  In no event will this paragraph be interpreted to
      permit the Company to make a claim against the Trust Account (as defined
      below) in violation of Section 9.01 of this
  Agreement.

              

      

       

      
        
           

        

        
          - 18
-

          
            

          

        

        
           

        

      

       

      Section
2.08         Company
Action

       

      The
Company hereby approves of and consents to the Arrangement and represents that
the Company Board, at a meeting duly called and held, has unanimously (i)
determined that this Agreement and the Transactions are fair to the Company
Shareholders and in the best interests of the Company, (ii) approved and
declared advisable this Agreement and the Transactions, and (iii) resolved to
make the Recommendation, and agrees and undertakes to use its reasonable
commercial efforts to obtain the necessary vote in favour of the Arrangement by
the Company Shareholders, subject to the provisions of Section
6.02.  The Company hereby consents to the inclusion in the Circular of
the Recommendation and the Company shall not withdraw, qualify, modify or amend
the Recommendation in any manner adverse to Parent or Purchaser except as and
only to the extent permitted by Section 6.02.

       

      Section
2.09         Consideration.

       

      In
connection with the Arrangement:

       

      
        	
                 
      

              	
                (a)

              	
                Holders
      of Company Common Stock at the Effective Date who do not exercise Dissent
      Rights under the Arrangement and are entitled to receive fair value for
      the Company Common Stock held by them, will be entitled to receive, in
      exchange for each share of Company Common Stock, a fraction of a share of
      Parent Common Stock equal to the Exchange Ratio. If between the date of
      this Agreement and the Effective Time the outstanding shares of Parent
      Common Stock or Company Common Stock shall have been changed into a
      different number of shares or a different class, by reason of any stock
      dividend, stock split, reclassification, recapitalization, combination or
      exchange of shares, the Exchange Ratio shall be correspondingly adjusted
      to reflect such stock dividend, stock split, reclassification,
      recapitalization, combination or exchange of
  shares.

              

      

       

      
        	
                 
      

              	
                (b)

              	
                Company
      Stock Options that are not exercised prior to the Exercise Date will be
      cancelled and terminated at the Effective
Time.

              

      

       

      
        	
                 
      

              	
                (c)

              	
                Holders
      of Company Warrants that are not exercised prior to the Exercise Date will
      be entitled to retain such Company Warrants and such
      Company  Warrants will be exercisable from and after the
      Effective Date for shares of Parent Common Stock after making adjustments
      as contemplated by Section 2.11
hereof.

              

      

       

      
        	
                 
      

              	
                (d)

              	
                
                  Holders
      of Company RSUs that are not redeemed prior to the Exercise Date will be
      entitled to retain such Company RSUs, and such Company RSUs will be
      redeemable from and after the Effective Date for cash as provided in the
      Company RSUs (adjusted to reflect the Exchange Ratio and as otherwise
      required to reflect the Arrangement), or for shares of Parent Common Stock
      after making adjustments as contemplated by Section 2.10(b)
      hereof.

                

              

      

       

      
        
           

        

        
          - 19
-

          
            

          

        

        
           

        

      

    

     

    
      	
               
      

            	
              (e)

            	
              No
      certificates or scrip evidencing fractional shares of Parent Common Stock
      shall be issued upon the surrender for exchange of Certificates (after
      taking into account all Certificates delivered by such holder) and such
      fractional share interests will not entitle the owner thereof to vote or
      to any rights of a stockholder of Parent. Company Shareholders who would
      otherwise have been entitled to receive decimal five (0.5) or more of a
      share of Parent Common Stock pursuant to the Arrangement shall receive a
      number of shares of Parent Common Stock rounded up to the next whole
      number of shares of Parent Common Stock.  Company Shareholders
      who would otherwise have been entitled to receive less than decimal five
      (0.5) of a share of Parent Common Stock pursuant to the Arrangement shall
      receive a number of shares of Parent Common Stock rounded down to the next
      whole number of shares of Parent Common Stock.  For greater
      certainty, Company Shareholders shall not be entitled to receive a cash
      payment in lieu of a fractional share of Parent Common
    Stock.

            

    

     

    Section
2.10         Company Stock Options and
Company RSUs.

     

    
      	
               
      

            	
              (a)

            	
              Before
      the Effective Date, the Company Board (or, if appropriate, any committee
      of the Company Board administering the Company Stock Option Plans) shall
      adopt such resolutions or take such other actions as may be required to
      effect the following:

            

    

     

    
      	
               
      

            	
              (i)

            	
              in
      accordance with the provisions of the Company Stock Option Plans, declare
      that all of the unvested Company Stock Options shall vest and specify a
      date prior to the Effective Date before which all Company Stock Options
      must be exercised, failing which any unexercised Company Stock Options
      shall terminate at the Effective Time;
and

            

    

     

    
      	
               
      

            	
              (ii)

            	
              make
      such other changes to the Company Stock Option Plans as Parent and the
      Company may agree are appropriate to give effect to the
      Arrangement.

            

    

     

    
      	
               
      

            	
              (b)

            	
              Before
      the Effective Date, the Company Board (or, if appropriate, any committee
      of the Company Board administering the Company RSU Plan) shall adopt such
      resolutions or take such other actions as may be required to effect the
      following:

            

    

     

    
      	
               
      

            	
              (i)

            	
              amend
      the terms of all outstanding unvested Company RSUs, as necessary and as
      permitted by the Company RSU Plan, to provide that, at the Effective Time,
      the Company RSUs outstanding immediately prior to the Effective Time (the
      “Adjusted RSUs”) shall from and after the Effective Time be redeemable in
      accordance with the terms of the Company RSU Plan for such number of
      shares of Parent Common Stock as equals (i) the number of shares of
      Company Common Stock for which the Company RSUs, if vested, would have
      been redeemable immediately prior to the Effective Time, multiplied by
      (ii) the Exchange Ratio; and

            

    

     

    
      
        
        

      

      
        - 20
-

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (ii)

            	
              make
      such other changes to the Company RSU Plan as Parent and the Company may
      agree are appropriate to give effect to the
  Arrangement.

            

    

     

    
      	
               
      

            	
              (c)

            	
              At
      the Effective Time, by virtue of the Arrangement and without the need of
      any further corporate action, Parent shall assume the Company RSU Plan,
      with the result that all obligations of the Company under the Company RSU
      Plan, including with respect to unvested Company RSUs outstanding at the
      Effective Time (adjusted pursuant to Section 2.10(b)), shall be
      obligations of Parent following the Effective
  Time.

            

    

     

    
      	
               
      

            	
              (d)

            	
              As
      soon as practicable after the Effective Time, Parent shall prepare and
      file with the SEC a registration statement on Form S-8 (or another
      appropriate form) registering a number of shares of Parent Common Stock
      equal to the number of shares of Parent Common Stock issuable in
      connection with the redemption of the Adjusted RSUs.  Such
      registration statement shall be kept effective (and the current status of
      the prospectus or prospectuses required thereby shall be maintained) at
      least for so long as any Adjusted RSUs or any unsettled awards granted
      under the Company RSU Plan after the Effective Time may remain
      outstanding.

            

    

     

    Section
2.11         Company
Warrants.

    
      
         

        
          	
                   
      

                	
                  (a)

                	
                  
                    Following
      the
      Effective Time, the Company Warrants shall be exercisable in accordance
      with the terms thereof for such number of shares of Parent Common Stock as
      equals (a) the number of shares of Company Common Stock for which the
      Company Warrants were exercisable immediately prior to the Effective Time
      multiplied by (b) the Exchange Ratio. The exercise price for the Company
      Warrants following the Effective Time shall be the exercise price for the
      Company Warrants prior to the Effective Time divided by the Exchange
      Ratio.

                  

                

        

         

        
          
            
              	
                    	
                      (b)

                    	
                      Parent shall prepare
      and file with the SEC a registration statement on Form S-1 (or another
      appropriate form) registering for public sale such shares of Parent Common
      Stock issuable upon exercise of Company Warrants dealt with under the
      Arrangement. Such registration in respect of Parent Company Stock issuable
      upon exercise of those Company Warrants covered in any existing
      registration rights agreement shall comply and be made in accordance with
      the terms of such registration rights agreement. The registration with
      respect to each other holder of Company Warrants not covered in any
      existing registration rights agreement shall be made as soon as
      practicable after the Effective Time and shall be kept effective (and the
      current status of any prospectus required thereby shall be maintained) at
      least for so long as any Company Warrants held by such other holders
      remain outstanding.

                    

            

          

           

        

      

    

    Section
2.12         Adjustments to Consideration
to Company Common Shareholders.

     

    If the
Company shall receive any Med-Eng Settlement Amount after the date of this
Agreement but before March 15, 2009, for every CAD$1,000,000 of payments
received by the Company in respect of the Med-Eng Settlement Amount (after
giving effect to taxes payable and contingent liabilities relating to which the
Med-Eng Settlement Amount has been paid) the Exchange Ratio will be increased by
a percentage equal 0.001109883 multiplied by the Exchange Rate.

    
      
         

      

      
        - 21
-

        
          

        

      

      
         

      

    

     

    ARTICLE
III

    
      REPRESENTATIONS
AND WARRANTIES OF THE COMPANY

    

    
       

       

    

    As an
inducement to Parent and Purchaser to enter into this Agreement and to implement
the Transactions, the Company hereby represents and warrants to Parent and
Purchaser as follows:

     

    Section
3.01         Organization and
Qualification; Subsidiaries.

     

    The
Company is a corporation duly formed, validly existing and in good standing
under and by virtue of the Laws of the Province of Ontario, Canada, and has all
power and authority, corporate and otherwise to own and operate its properties
and assets and to carry on its business as now conducted and as proposed to be
conducted. Each of the Company Subsidiaries is listed on Schedule 3.01. Each
Company Subsidiary is duly formed, validly existing and in good standing under
and by virtue of the Laws of their respective jurisdiction of organization, and
has all power and authority to own and operate its properties and assets and to
carry on businesses as now conducted and as proposed to be
conducted.  Except as set forth on Schedule 3.01, neither the Company
nor any Company Subsidiary is qualified to do business as a foreign corporation
in any jurisdiction, and there is no jurisdiction in which the character of the
property owned or leased by the Company or any Company Subsidiary or the nature
of its activities make qualification of the Company or any Company Subsidiary in
any such jurisdiction necessary, except where the failure to so qualify would
not have a Company Material Adverse Effect.  The only offices or
business locations of the Company and each Company Subsidiary are listed on
Schedule 3.01. Neither the Company nor any Company Subsidiary has taken any
action, adopted any plan, or made any agreement in respect of any merger,
consolidation, sale of all or substantially all of its respective assets,
reorganization, recapitalization, dissolution or liquidation, except as
explicitly set forth in this Agreement.

     

    Section
3.02         Certificate of Incorporation
and By-Laws.

     

    The
Company has heretofore made available to Parent a complete and correct copy of
the certificate of incorporation or other constating documents and the by-laws
or equivalent organizational documents, each as amended to date, of the Company
and each Company Subsidiary.  Such certificates of incorporation,
constating documents, by-laws or equivalent organizational documents, as amended
to date, are in full force and effect.  Neither the Company nor any
Company Subsidiary is in violation of any of the provisions of its certificate
of incorporation, constating document, by-laws or equivalent organizational
documents.

    
      
         

      

      
        - 22
-

        
          

        

      

      
         

      

    

     

    Section
3.03         Authority.

     

    The
Company has all necessary corporate power and authority to execute and deliver
each of the Transaction Documents, to perform its obligations hereunder and
thereunder and to consummate the Transactions.  The execution and
delivery of the Transaction Documents by the Company and the consummation by the
Company of the Transactions have been duly and validly authorized by all
necessary corporate action of the Company.  No corporate proceedings
on the part of the Company are necessary to authorize the Transaction Documents
or to consummate the Transactions, other than the approval of the Company
Shareholders and the filing of appropriate documents as required by the
OBCA.  Each of the Transaction Documents has been duly and validly
executed and delivered by the Company and, assuming the due authorization,
execution and delivery by each of the other parties hereto and subject to the
terms and conditions of this Agreement and the requisite approval of the
Arrangement Resolution by the Company Shareholders, each of the Transaction
Documents constitutes a legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, except to the
extent that its enforceability may be subject to applicable bankruptcy,
insolvency, reorganization, moratorium and similar Laws affecting the
enforcement of creditors’ rights generally and by general equitable
principles.

     

    Section
3.04         No Conflict; Required
Filings and Consents.

     

    
      	
               
      

            	
              (a)

            	
              The
      execution and delivery of the Transaction Documents by the Company do not,
      and the performance by the Company of its obligations thereunder, will
      not, (i) result in a breach of or conflict with or violate the certificate
      of incorporation or other constating documents or by-laws or any
      equivalent organizational documents, each as amended to date, of the
      Company or any Company Subsidiary, (ii) result in a breach of, constitute
      a default under, violate or conflict with any material term or provision
      of any order of any court, Governmental Authority or any Law applicable to
      the Company or any Company Subsidiary or by which any property or asset of
      the Company or any Company Subsidiary is bound or affected, (iii) result
      in any breach of or constitute a default (or an event which, with notice
      or lapse of time or both, would become a default) under, or give to others
      any right of termination, amendment, acceleration or cancellation of, or
      result in the creation of a Lien or other encumbrance on any property or
      asset of the Company or any Company Subsidiary pursuant to, or result in
      any payment under, any Material Contract (as defined in Section 3.11) or
      Company Permit or, except as set forth in Schedule 3.04(a), require the
      Company or any Company Subsidiary, under the terms of any agreement,
      contract, arrangement or understanding to which it is a party or by which
      it or any property or asset of the Company or Company Subsidiary is bound,
      to obtain the consent or approval of, or provide notice to, any other
      party to such agreement, contract, arrangement or understanding; or (iv)
      give rise to any Liability not disclosed in Schedule
    3.04(a).

            

    

    
      
         

      

      
        - 23
-

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (b)

            	
              The
      execution and delivery of the Transaction Documents by the Company do not,
      and the performance by the Company of its obligations hereunder and
      thereunder, will not, require any consent, approval, authorization or
      permit of, or filing with or notification to any Governmental Authority,
      except (A) for applicable requirements, if any, of Canadian Securities
      Laws, the Investment Canada Act and filing of appropriate documents as
      required by the OBCA, and (B) as contemplated by Section 2.01, Section
      2.02 and the Plan of Arrangement.

            

    

     

    Section
3.05         Capitalization.

     

    Schedule
3.05 sets forth, with respect to the Company and each Company Subsidiary, as at
the date hereof: (i) such company’s authorized capital, (ii) the number of such
company’s equity securities that are outstanding, (iii) each security
convertible into or exercisable or exchangeable for such company’s equity
securities, the number and type of equity securities such security is
convertible into and the exercise or conversion price of such
security.  Except as set forth on Schedule 3.05, there is no contract
that requires or under any circumstance would require the Company or any Company
Subsidiary to issue, or grant any right to acquire, any securities of the
Company or any Company  Subsidiary, or any security or instrument
exercisable or exchangeable for or convertible into, the capital stock or
membership interest of the Company or any Company Subsidiary or to merge,
consolidate, dissolve, liquidate, restructure, or recapitalize the Company or
any Company Subsidiary.  The Company Common Stock and the equity
securities of each Company Subsidiary (i) have been duly authorized and validly
issued and are fully paid and non-assessable, and (ii) were issued in compliance
with all applicable federal, provincial  and state securities
laws.

     

    Section
3.06         Securities Law Matters;
Financial Statements.

     

    
      	
               
      

            	
              (a)

            	
              The
      Company is a “reporting issuer” or has equivalent status in each of the
      provinces of Canada.  The Company Common Stock is listed on the
      TSX.  Other than as disclosed in Schedule 3.06(a), the Company
      has not been notified of any default or alleged default by the Company of
      any material requirement of the TSX or applicable Canadian Securities
      Laws.  No Canadian Securities Regulators have issued any order
      preventing or suspending trading of any securities of the Company and the
      Company is not in material default of any requirement of applicable
      Canadian Securities Laws.

            

    

     

    
      	
               
      

            	
              (b)

            	
              At
      the time that they were filed or, if amended, as of the date of such
      amendment, the Company Reports complied in all material respects, and each
      report subsequently filed by the Company with the Canadian Securities
      Regulators will, on the date filed, comply in all material respects, with
      all applicable requirements of Canadian Securities Legislation as in
      effect on the date so filed.  The Company Reports did not or
      will not, at the time they were or will be filed, or, if amended, as of
      the date of such amendment, contain any
  Misrepresentation.

            

    

     

    
      
         

      

      
        - 24
-

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (c)

            	
              Neither
      the Company nor any of the Company Subsidiaries has filed with the SEC any
      registration statement under the Securities Act or is currently
      registered, or has prior to the date hereof been registered, under the
      Exchange Act.  The Company is not currently required, and, with
      the exception of notices filed with the SEC on Form D pursuant to Rule 503
      of Regulation D under the Securities Act and similar notices filed with
      certain state securities regulatory authorities as permitted by section 18
      of the Securities Act or in connection with offerings of securities
      effected pursuant to exemptions from applicable state registration
      requirements, has not prior to the date hereof been required, to file any
      form, report or other document with the U.S. Securities
      Regulators.  No Company Subsidiary is required to file any form,
      report or other document with the Canadian Securities Regulators or the
      U.S. Securities Regulators.  Except as set out in Schedule
      3.06(c), the Company has not received any non-routine inquires or
      interrogatories, whether in writing or otherwise, from any Canadian
      Securities Regulators, the TSX or any other Governmental Authority, or, to
      the knowledge of the Company, been the subject of any investigation,
      audit, review or hearing by or in front of such Persons, in each case with
      respect to any of the Company Reports or any of the information contained
      therein.

            

    

     

    
      	
               
      

            	
              (d)

            	
              Each
      of the consolidated financial statements contained in the Company Reports,
      including, for greater certainty, the Financial Statements, and including,
      in each case, any notes thereto, have been and, as regards such financial
      statements prepared after the date hereof, will be, prepared in accordance
      with GAAP applied on a consistent basis throughout the periods indicated
      and each fairly presents or will fairly present, in all material respects,
      the consolidated financial position, results of operations and cash flows
      of the Company and its consolidated Company Subsidiaries as at the
      respective dates thereof and for the respective periods indicated therein
      (subject, in the case of unaudited statements, to normal and recurring
      year-end adjustments) and reflects appropriate and adequate reserves for
      contingent Liabilities in accordance with
GAAP.

            

    

     

    
      	
               
      

            	
              (e)

            	
              Except
      as and to the extent set forth in the Company Reports, neither the Company
      nor any Company Subsidiary has any Liability, except for (i) Liabilities
      incurred in the ordinary course of Business consistent with past practice
      since September 30, 2008, or (ii) Liabilities for fees, costs and expenses
      incurred in connection with the
Transactions.

            

    

     

    
      	
               
      

            	
              (f)

            	
              The
      Company and the Company Subsidiaries have devised and maintain a system of
      internal accounting controls and information systems sufficient to provide
      reasonable assurances that (x) transactions are executed in accordance
      with management’s general or specific authorization, and (y) transactions
      are recorded as necessary (A) to permit preparation of financial
      statements in conformity with GAAP, and (B) to maintain accountability for
      assets, in all material respects.

            

    

     

    
      
         

      

      
        - 25
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    Section
3.07         Information to be
Supplied.

     

    
      	
               
      

            	
              (a)

            	
              The
      Circular and the other documents required to be filed by the Company with
      the Canadian Securities Regulators in connection with the Transactions
      will comply as to form in all material respects with the requirements of
      the Canadian Securities Laws and the OBCA, as the case may
      be.  Each of the Circular and the other documents required to be
      filed by the Company with the Canadian Securities Regulators in connection
      with the Transactions and any of the information supplied or to be
      supplied by the Company or the Company Subsidiaries or their
      representatives for inclusion or incorporation by reference in the
      Circular will not, on the date of its filing or mailing, on the date of
      the Company Meeting or at the Effective Date, contain any untrue statement
      of a material fact or omit to state any material fact required to be
      stated therein or necessary in order to make the statements therein, in
      light of the circumstances under which they are made, not
      misleading.

            

    

     

    
      	
               
      

            	
              (b)

            	
              Notwithstanding
      the foregoing provisions of this Section 3.07, no representation or
      warranty is made by the Company with respect to statements made in the
      Circular based on information supplied by or on behalf of the Purchaser
      Parties for inclusion therein, unless such information shall have been
      modified in any way, or reproduced in any manner other than that provided
      by a Purchaser Party, without its prior written
  consent.

            

    

     

    Section
3.08         Permits;
Compliance.

     

    
      	
               
      

            	
              (a)

            	
              The
      operations of the Company and the Company Subsidiaries have been conducted
      in compliance with all Laws in each jurisdiction in which it or they carry
      on business or hold a Company Permit, except where the failure to so
      comply has not resulted in a Company Material Adverse
      Effect.  The Company holds all necessary Company Permits and all
      such Company Permits are in full force and
  effect.

            

    

     

    
      	
               
      

            	
              (b)

            	
              Except
      as set out on Schedule 3.08(b), neither the Company nor any of the Company
      Subsidiaries is in default, in any material respect, with respect to any
      Law or Company Permit or has received written notice of any possible
      violation (or of any investigation, inspection, audit, or other proceeding
      by any Governmental Authority involving allegations of any violation) of
      any Law or Company Permit, and, to the knowledge of the Company, no
      investigation, inspection, audit or other proceeding by any Governmental
      Authority involving allegations of any violation of any Law or Company
      Permit is threatened or
contemplated.

            

    

     

    
      
         

      

      
        - 26
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              (c)

            	
              Each
      of the Company and the Company Subsidiaries has, and to the knowledge of
      the Company all employees or agents of each of the Company and the Company
      Subsidiaries have, all material licenses, franchises, permits,
      authorizations, certifications, easements, variances, exceptions, consents
      and orders, including approvals from all Governmental Authorities
      (“Approvals”) required for the conduct of the business of each of the
      Company and the Company Subsidiaries and the occupancy and operation, for
      its present uses, of the real and personal property which each of the
      Company and the Company Subsidiaries owns or leases and neither the
      Company nor any of the Company Subsidiaries is in material violation of
      any such Approval or any terms or conditions
  thereof.

            

    

     

    
      	
               
      

            	
              (d)

            	
              All
      Approvals for the Company and each of the Company Subsidiaries are, in all
      material respects, in full force and effect, have been issued to and fully
      paid for by the holder thereof and, to the knowledge of the Company, no
      suspension or cancellation thereof has been
  threatened.

            

    

     

    
      	
               
      

            	
              (e)

            	
              No
      Approvals for the Company and each of the Company Subsidiaries, nor any
      Company Permits, will terminate or cease to be valid and in effect by
      reason of the Transactions.

            

    

     

    Section
3.09         Absence of Certain Changes
or Events.

     

    Except as
(a) expressly contemplated by this Agreement or in Schedule 3.09, or (b)
described in the Company Reports filed prior to the date of this Agreement,
since September 30, 2008: (i) the Company and the Company Subsidiaries have
conducted their businesses only in the ordinary course and in a manner
consistent with past practice, (ii) there has not been any Company Material
Adverse Effect, (iii) none of the Company or any Company Subsidiary has taken
any action that, if taken after the date of this Agreement, would constitute a
breach of any of the covenants set forth in Section 5.01; and (iv) other than as
disclosed in Schedule 3.05, none of the Company or any Company Subsidiary has
issued or granted any options, warrants, debentures or other rights, agreements,
arrangements or commitments of any character, relating to the issued or unissued
capital stock of the Company or any Company Subsidiary or obligating the Company
or any Company Subsidiary to issue or sell any shares of capital stock of, or
other equity interests in, the Company or any Company
Subsidiary.

    
      
         

      

      
        - 27
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    Section
3.10         Absence of
Litigation.

     

    Except as
set forth in Schedule 3.10, there are no Actions outstanding or, to the
knowledge of the Company, threatened against the Company or any Company
Subsidiary at law or in equity or before or by any court or other Governmental
Authority.  To the knowledge of the Company, there are no grounds upon
which any Action may be commenced against the Company or a Company
Subsidiary.  Neither the Company nor any Company Subsidiary nor any
property or asset of the Company or any Company Subsidiary is subject to any
continuing order of, consent decree, settlement agreement or other similar
written agreement with, or, to the knowledge of the Company, continuing
investigation, inquiry or audit by, any Governmental Authority, or any order,
writ, judgment, injunction, decree, determination or award of any Governmental
Authority.

     

    Section
3.11         Contracts.

     

    
      	
               
      

            	
              (a)

            	
              Schedule
      3.11(a)(A) contains a complete list of all oral contracts or agreements to
      which the Company or any Company Subsidiary is a party involving a
      commitment in excess of CAD$15,000. Schedule 3.11(a)(B) contains a
      complete list of all written contracts and agreements to which the Company
      or any Company Subsidiary is a party:  (i) each contract,
      agreement or account involving aggregate annual payments to the Company or
      any Company Subsidiary of more than CAD$10.0 million, or aggregate annual
      payments by the Company or any Company Subsidiary of more than CAD$5.0
      million, (ii) all material contracts and agreements with any Governmental
      Authority, (iii) all contracts and agreements that (A) limit or purport to
      limit the ability of the Company or any Company Subsidiary or, to the
      Company’s knowledge, any key executives of the Company or any Company
      Subsidiary, to compete in any line of business or with any Person or in
      any geographic area or during any period of time or otherwise restricts
      the development, manufacture, marketing, distribution or sale of any
      products or services by the Company or any Company Subsidiary, (B) require
      the Company or any Company Subsidiary to use any supplier or third party
      for all or substantially all of the requirements or needs of the Company
      or a Company Subsidiary and that provide for services of more than CAD$5.0
      million, or aggregate annual payments by the Company or any Company
      Subsidiary of more than CAD$5.0 million, (C) limit or purport to limit in
      any material respect the ability of the Company or any Company Subsidiary
      to solicit any customers or clients of the other parties thereto, (D)
      contain “non-solicitation” or “no-hire” provisions that restrict the
      Company or any Company Subsidiary in any manner, or (E) require the
      Company or any Company Subsidiary to market or co-market any services or
      products of a third party (each of (A) through (E), a “Restrictive
      Agreement”); (iv) all contracts, agreements and arrangements between the
      Company or any of the Company Subsidiaries, on the one hand, and any
      Affiliate, stockholder or officers, directors or principals of the Company
      or any Company Subsidiary on the other hand (each such contract, a
      “Related Party Agreement”); (v) all joint venture contracts, partnership
      arrangements or other agreements outside the ordinary course of business
      involving a sharing of profits, losses, costs or Liabilities by the
      Company or any Company Subsidiary with any third party; (vi) all licenses
      issued by any other Governmental Authority including, without limitation,
      the identity of the respective licensees thereunder; (vii) each material
      employment, services or consulting contract with any employee, service
      provider or consultant of the Company or any of the Company Subsidiaries;
      (viii) any standstill or similar contract currently restricting the
      ability of the Company or any Company Subsidiary to offer to purchase or
      purchase the assets or equity securities of another Person; (ix) each
      material contract providing that the Company, any Company Subsidiary or
      any of their respective employees maintain the confidentiality of any
      information, or providing for any Person to maintain the confidentiality
      of any information material to the Company, any Company Subsidiary or
      their respective businesses; (x) any contract under which the Company or
      any Company Subsidiary has directly or indirectly guaranteed Indebtedness
      of any Person; (xi) any contract under which the Company or any Company
      Subsidiary has borrowed any money from, or issued any note, bond,
      debenture or other evidence of Indebtedness to, any Person; (xii) any
      contract granting a third party any license to any Intellectual Property
      Rights involving aggregate annual payments to the Company or any Company
      Subsidiary of more than CAD$10.0 million, or pursuant to which the Company
      or any Company Subsidiary has been granted by a third party any license to
      any software or Intellectual Property Rights, or any other license, option
      or other contract relating in whole or in part to Intellectual Property
      Rights or the intellectual property of any other Person; (xiii) all
      collective bargaining agreements, letters of understanding, and all other
      agreements between the Company or a Company Subsidiary and any trade
      union, employee association or similar organization; and (xiv) all other
      material contracts and agreements, including any sole source contracts
      with suppliers and licensors, whether or not made in the ordinary course
      of business, which are material to the Company or any Company Subsidiary
      or the conduct of their respective businesses. The contracts in Schedule
      3.11(a)(A) and Schedule 3.11(a)(B), collectively, the “Material
      Contracts”.

            

    

     

    
      
         

      

      
        - 28
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              (b)

            	
              Each
      Material Contract is valid and binding on the Company or the Company
      Subsidiary that is a party thereto or bound thereby, as the case may be,
      is, in all material respects, in full force and effect against the Company
      or the relevant Company Subsidiary, except to the extent it has expired in
      accordance with its terms, and represents the entire agreement between or
      among the parties thereto with respect to the subject matter thereof; and,
      upon consummation of the Transactions, each Material Contract shall
      continue in full force and effect without penalty.  None of the
      Company or any Company Subsidiary or, to the knowledge of the Company, as
      of the date of this Agreement, any other party thereto, is in breach of,
      or default under, in any material respect, any Material
      Contract.

            

    

     

    
      	
               
      

            	
              (c)

            	
              The
      Company has made available to Parent a true, complete and correct copy of
      each Material Contract, together with all material amendments, waivers or
      other changes thereto.

            

    

     

    
      
         

      

      
        - 29
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    Section
3.12         Employee
Matters.

     

    
      	
               
      

            	
              (a)

            	
              Schedule
      3.12(a) sets forth a true and complete list of the names, titles, annual
      salaries or wage rates and other compensation, benefits and office
      location of all employees of the Company or any Subsidiary whose general
      (or annualized in the case of recent hires) compensation exceeds
      CAD$100,000 (or CAD$ equivalent if paid in another currency) (“Key
      Employees”), indicating all changes in salaries and wage rates per
      employee since September 30, 2008.  Schedule 3.12(a) also sets
      forth a true and complete list of all written agreements with Key
      Employees.

            

    

     

    
      	
               
      

            	
              (b)

            	
              The
      Company and all Company Subsidiaries have complied with all applicable
      Laws and Orders relating to employment or labor other than those Laws and
      Orders with which it could fail to comply, either individually or in the
      aggregate, without causing a Company Material Adverse
      Effect.  Except as set forth on Schedule 3.12(b), no present or
      former employee, officer or director of the Company or any Company
      Subsidiary has commenced or threatened, or will have commenced at the
      Effective Date, any Action against the Company or any Company Subsidiary
      for any matter including, but not limited to, for (i) wages, salary,
      bonus, vacation, severance, benefit plans, or sick pay except for the same
      incurred in the ordinary course of business for the last payroll period
      prior to the Effective Time, or (ii) Actions respecting employment
      conditions, standards or practices, including discrimination, harassment
      including sexual harassment, pay equity, or health and safety conditions,
      which in each case if successful would result in a Company Material
      Adverse Effect.

            

    

     

    
      	
               
      

            	
              (c)

            	
              There
      is no: (i) unfair labor practice complaint against the Company or any
      Company Subsidiary pending or ongoing before the National Labor Relations
      Board, relevant employment standards or labour relations board, tribunal
      or commission in Canada or any equivalent provincial, state or local
      agency, board or commission in any jurisdiction where the Company or any
      Company Subsidiary carries on business and has employees; (ii) pending or
      ongoing labor strike, lock-out, slow down or other material labor trouble
      affecting the Company or any Company Subsidiary; (iii) material labor
      grievance pending or ongoing against the Company or any Company
      Subsidiary; (iv) pending or ongoing representation question or
      certification application respecting the employees of the Company or any
      Company Subsidiary; or (v) pending or ongoing arbitration proceeding
      arising out of or under any collective bargaining agreement to which the
      Company or any Company Subsidiary is a party.  In addition, to
      the Company’s knowledge: (a) none of the matters specified in clauses (i)
      through (v) above is threatened against the Company or any Company
      Subsidiary; (b) no union organizing activities are in progress or have
      taken place within the last five (5) years with respect to the Company or
      any Company Subsidiary; and (c) no basis exists for which a claim may be
      made or Action may be commenced under any collective bargaining agreement
      to which the Company or any Company Subsidiary is a
  party.

            

    

     

    
      
         

      

      
        - 30
-

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (d)

            	
              Neither
      the Company nor any of the Company Subsidiaries has entered into, made any
      commitments to conduct or conducted negotiations for, nor is the Company
      or any of the Company Subsidiaries a party to, either directly or by
      operation of Law, any collective agreement, letter of understanding, or
      other agreement with any trade union, employee association or other
      similar organization, which would cover any employee or dependant
      contractor of the Company or any of the Company Subsidiaries, currently or
      in the future, except as disclosed in Schedule 3.12(a).  In the
      past five (5) years, there have not been any strikes, labour disturbances,
      work refusals, lock-outs, or slow downs by any of the employees of the
      Company or Company Subsidiaries.

            

    

     

    
      	
               
      

            	
              (e)

            	
              Schedule
      3.12(e) sets forth a true and complete list of every written pension,
      retirement, profit sharing, bonus, incentive compensation, savings,
      deferred compensation, stock option, stock purchase or stock appreciation,
      employee stock ownership, fringe benefit, vacation, health, welfare,
      medical, dental, vision, supplemental unemployment benefit, life
      insurance, disability, sick pay, severance pay, group insurance or other
      written or oral employee benefit plans, programs or arrangements currently
      or within the last one (1) year sponsored, maintained or contributed to by
      the Company or any of the Company Subsidiaries or with respect to which
      the Company or any of the Company Subsidiaries participates in or has any
      potential liability or obligations (collectively, the
      “Plans”).  Each Plan has been maintained and administered in all
      material respects in compliance with its terms and all applicable Laws and
      in accordance with all understandings, written or oral, between the
      Company and employees of the Company or any of the Company Subsidiaries
      and between any of the Company Subsidiaries and employees of the Company
      or any of the Company Subsidiaries.  All contributions to the
      Plans (including both employee and Company and/or Company Subsidiary
      contributions), including premium payments, that are required to have been
      made, whether by virtue of the terms of the particular Plan or arrangement
      or by operation of Law, have, in all material respects, been made by the
      due date thereof (including all applicable
  extensions).

            

    

     

    
      
         

      

      
        - 31
-

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (f)

            	
              (i)
      No promise to make any improvements to any Plan or to adopt any additional
      plan has been made except as required by Law and no improvements to any
      Plan will be made or promised by the Company, and no promise to adopt any
      additional plan will be made, before the Effective Date; (ii) no event has
      occurred which could subject the Company or any of the Company
      Subsidiaries to any material tax, penalty or fiduciary liability in
      connection with any Plan which has not been accrued on the Annual
      Financial Statements; (iii) there have been no withdrawals of surplus or
      contribution holidays, except as permitted by Law and the terms of the
      Plans; and (iv) no Plan provides post-employment or post-retirement
      benefits to former or retired employees or to the beneficiaries or
      dependants of former or retired employees, other than as required by
      Law.

            

    

     

    
      	
               
      

            	
              (g)

            	
              No
      insurance policy or any other contract or agreement affecting any Plan
      requires or permits a retroactive increase in premiums or payments due
      thereunder.

            

    

     

    
      	
               
      

            	
              (h)

            	
              The
      Company has furnished or made available to the Parent true, correct,
      up-to-date and complete copies of all the Plans, as amended as of the date
      hereof together with all current and past related documentation and all
      amendments thereto.

            

    

     

    
      	
               
      

            	
              (i)

            	
              Neither
      the Company nor any of the Company Subsidiaries have received notice of
      the intent of any Governmental Authority responsible for the enforcement
      or administration of labour or employment laws, to conduct an audit,
      inquiry or investigation of the Company or the Company
      Subsidiaries.

            

    

     

    
      	
               
      

            	
              (j)

            	
              There
      are no outstanding Actions, orders, charges or fines against the Company
      or any of the Company Subsidiaries under any occupational health and
      safety legislation or other Laws. All levies, assessments and penalties
      made against or premiums owed by the Company or the Company Subsidiaries
      pursuant to applicable workers’ compensation or workplace safety and
      insurance legislation have, in all material respects, been paid in full,
      and there has been no reassessment under such legislation during the past
      three years and, to the knowledge of the Company, there are no
      circumstances that would permit a
reassessment

            

    

     

    
      	
               
      

            	
              (k)

            	
              All
      obligations of the Company and the Company Subsidiaries as of the
      Effective Date for wages, salary, bonuses, commissions or incentives,
      vacation pay, holiday pay, sick pay, premiums for employment or
      unemployment insurance, employer health tax or premiums, workers’
      compensation and workplace safety and insurance payments or premiums, and
      all other accrued payroll obligations in respect of the employees of the
      Company and the Company Subsidiaries will have, in all material respects,
      been paid, or if unpaid, will be accrued and properly reflected in the
      Books and Records of the Company and the Company Subsidiaries on the
      Effective Date.

            

    

     

    
      
         

      

      
        - 32
-

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (l)

            	
              The
      execution of this Agreement and the completion of the Transactions will
      not constitute an event under any Plan that will result in any payment
      (whether of severance pay or otherwise), acceleration of payment or
      vesting of benefits or compensation, forgiveness of indebtedness, vesting,
      distribution, restriction on funds, increase in benefits or obligation to
      fund benefits or compensation, except as will be accrued and properly
      reflected in the Books and Records of the Company and the Company
      Subsidiaries on the Effective Date.

            

    

     

    Section
3.13         Customers.

     

    Except as
set forth on Schedule 3.13, since September 30, 2008: (a) there has not been any
termination of the business relationship of the Company or any Company
Subsidiary with any material licensee, customer or supplier other than in the
ordinary course of business or where the conclusion of such relationship or
contract would not have a Company Material Adverse Effect; (b) there has not
been any threatened termination or withholding of payments by, or any material
dispute with, any material licensee (including, but not limited to, licensee),
customer or supplier; and (c) neither the Company nor any Company Subsidiary has
received any notice or been informed that any such event will occur in the
future, either as a result of the consummation of the Transactions contemplated
by this Agreement or otherwise. Except as set forth on Schedule 3.13, neither
the Company nor any Company Subsidiary is currently in any dispute over any
terms of any material contract or agreement to which the Company or any Company
Subsidiary and any material licensee, customer or supplier is a
party.

     

    Section
3.14         Property and
Leases.

     

    
      	
               
      

            	
              (a)

            	
              The
      Company and the Company Subsidiaries have good, valid and marketable title
      to or, in the case of leased properties and assets, valid leasehold
      interest in, all of the properties and assets owned or used by them to
      conduct their respective businesses as currently conducted or as currently
      contemplated by the Company and the Company Subsidiaries to be conducted,
      free and clear of all Liens, subject only to Permitted
    Liens.

            

    

     

    
      	
               
      

            	
              (b)

            	
              Neither
      the Company nor any Company Subsidiary owns any real
    property.

            

    

     

    
      
         

      

      
        - 33
-

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (c)

            	
              To
      the knowledge of the Company, all Leases (as defined below) are in full
      force and effect and have not been modified or amended, and there exists
      no material default under any such lease by the Company or any Company
      Subsidiary, nor any event which, with notice or lapse of time or both,
      would constitute a material default thereunder by the Company or any
      Company Subsidiary. To the knowledge of the Company, none of the landlords
      or other parties to the Leases are in default of any of their material
      obligations under the Leases.

            

    

     

    
      	
               
      

            	
              (d)

            	
              Schedule
      3.14(d) discloses a full and complete list of all leases of real property
      by or for the benefit of the Company and the Company Subsidiaries and all
      amendments and modifications thereto (the “Leases”) and the lessors
      thereof.  The Company has made available to Parent prior to the
      date of this Agreement complete and accurate copies of each of the Leases,
      and none of the Leases has been modified in any material
      respect.

            

    

     

    
      	
               
      

            	
              (e)

            	
              Neither
      the Company nor any Company Subsidiary has breached or violated and is not
      in default under any of the Leases or any building, zoning or other
      statute, by-law, ordinance, regulation, covenant, restriction or official
      plan, the breach or violation of which could individually or in the
      aggregate have a Company Material Adverse Effect, and no written notice
      from any Person has been received by the Company or any Company Subsidiary
      or served upon the Company or any Company Subsidiary claiming any such
      breach or violation.  There are no condemnation or appropriation
      or similar proceedings pending or, to the knowledge of the Company,
      threatened against any such real property or improvements
      thereon.  No material capital expenditures by the Company (or
      the Company Subsidiaries) or by the landlord are required for the
      maintenance and repair of the leased real property.  The
      Company’s (or the Company Subsidiaries’) leased real property is
      adequately served by gas, electricity, water, sewage and waste removal
      utilities.  To the knowledge of the Company, there are no
      challenges or appeals pending, or threatened regarding the amount of the
      Taxes on, or the assessed valuation of the leased real property, and
      neither the Company nor any of the Company Subsidiaries have entered into
      any special arrangements or agreements with any Governmental Authority
      with respect thereto.  No part of the premises subject to the
      Leases has been taken or expropriated by any Governmental Authority nor
      has any notice or proceeding in respect thereof been given or commenced to
      or against the Company or any Company
  Subsidiary.

            

    

     

    
      
         

      

      
        - 34
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    Section
3.15         Intellectual
Property.

     

    
      	
               
      

            	
              (a)

            	
              Schedule
      3.15(a) sets forth a true and complete list of all registered or filed
      Intellectual Property Rights, specifying as to each, as applicable: (i)
      the nature of such Intellectual Property Right; (ii) the owner of such
      Intellectual Property Right; (iii) the jurisdictions by or in which such
      Intellectual Property Right has been issued or registered or in which an
      application for such issuance or registration has been filed and the name
      of the owner of each such registration or application; (iv) the filing and
      registration numbers and filing or registration dates of such Intellectual
      Property Rights; and (v) all licenses, sublicenses and other agreements
      pursuant to which any Person is authorized to use such Intellectual
      Property Right. The Intellectual Property Rights listed in Schedule
      3.15(a) are valid, enforceable and subsisting. The Intellectual Property
      Rights owned or licensed to the Company or the Company Subsidiaries
      include all of the Intellectual Property Rights used by the Company or any
      of the Company Subsidiaries to conduct its business in the manner in which
      such business is currently being
conducted.

            

    

     

    
      	
               
      

            	
              (b)

            	
              Except
      as set forth on Schedule 3.15(b), neither the Company nor any Company
      Subsidiary is currently being sued or charged in writing with or is a
      defendant in any claim, suit, action or proceeding that involves a claim
      of infringement of any Intellectual Property Right, and the Company has no
      knowledge of any other claim of infringement by the Company or any Company
      Subsidiary, and no knowledge of any continuing infringement by any other
      Person of any Intellectual Property
Right.

            

    

     

    
      	
               
      

            	
              (c)

            	
              To
      the knowledge of the Company, the current use by the Company and the
      Company Subsidiaries of the Intellectual Property Rights does not infringe
      the rights of any other Person, which if the Company was required cease
      such use, would have a Company Material Adverse
  Effect.

            

    

     

    
      	
               
      

            	
              (d)

            	
              The
      Company warrants that the Company or the Company Subsidiaries have good
      and valid title to all Intellectual Property Rights they own and that any
      licenses by which Intellectual Property Rights are licensed to or from the
      Company or the Company Subsidiaries are in full force and effect, are
      unamended and there are no outstanding defaults or breaches under any of
      them. With respect to any copyrights owned by or licensed to the Company
      or the Company Subsidiaries, written, unrestricted waivers of moral rights
      have been obtained, the failure of which to obtain would have a Company
      Material Adverse Effect and which waivers may be invoked by the Company or
      the Company Subsidiaries to use the
work.

            

    

     

    
      
         

      

      
        - 35
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    Section
3.16         Taxes.

     

    
      	
               
      

            	
              (a)

            	
              Except
      as set out in Schedule 3.16(a), the Company and each of the Company
      Subsidiaries have duly and on a timely basis filed (or have had filed on
      their behalf) with all appropriate Governmental Authorities all Tax
      Returns and other documents required to be filed by each of them in
      respect of all Taxes in accordance with all applicable Laws except where
      the failure to file such Tax Returns or other documents is not likely to
      result in a Company Material Adverse Effect, and such Tax Returns and
      other documents are, in all material respects, complete and
      correct.  The Company and each of the Company Subsidiaries has
      made available to Purchaser complete and correct copies of all Tax Returns
      for the three (3) fiscal years ending before the date
    hereof.

            

    

     

    
      	
               
      

            	
              (b)

            	
              The
      Company and each of the Company Subsidiaries has, within the time and in
      the manner prescribed by Law, paid, collected, remitted and discharged all
      Taxes that have become due and payable, collectible and remittable and
      will timely pay all Taxes which will become due and payable on or prior to
      the Effective Date other than such payments as are being diligently
      contested in good faith by appropriate proceedings and for which adequate
      reserves have been taken on the Annual Financial Statements in accordance
      with GAAP.

            

    

     

    
      	
               
      

            	
              (c)

            	
              Neither
      the Company nor any Company Subsidiary has granted any waiver of any
      statute of limitations with respect to, or any extension of a period for
      the assessment, reassessment or payment of, any
  Tax.

            

    

     

    
      	
               
      

            	
              (d)

            	
              Neither
      the Company nor any Company Subsidiary is party to any Tax-sharing
      agreement, Tax-indemnification agreement or other agreement or arrangement
      relating to Taxes with any Person; neither the Company nor any of the
      Company Subsidiaries has been a member of an affiliated, combined or
      unitary group filing a consolidated, combined, unitary or other Tax Return
      for Tax purposes reflecting the income, assets or activities of affiliated
      companies, or has any Liability for the Taxes of any other Person under
      any provision of Canadian federal, provincial, local or non-Canadian Law,
      or as a transferee or successor, or by contract, or
    otherwise.

            

    

     

    
      	
               
      

            	
              (e)

            	
              The
      Company and each of the Company Subsidiaries has, in all material
      respects, withheld from each amount paid or credited to any Person the
      amount of Taxes required to be withheld therefrom and has remitted such
      Taxes to the proper Governmental Authority within the time required by
      applicable Law.

            

    

     

    
      	
               
      

            	
              (f)

            	
              Except
      as set out in Schedule 3.16(f), neither the Company nor any of the Company
      Subsidiaries has any material Liability for any
  Taxes.

            

    

     

    
      
         

      

      
        - 36
-

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (g)

            	
              Neither
      the Company nor any of the Company Subsidiaries has any material
      Liability, obligation or commitment for the payment of Taxes not yet due
      other than those that have arisen since September 30, 2008 in the usual
      and ordinary course of business and for which adequate provisions have
      been made in the Financial Statements in accordance with
    GAAP.

            

    

     

    
      	
               
      

            	
              (h)

            	
              Except
      as set out in Schedule 3.16(h), all Tax Returns of the Company and the
      Company Subsidiaries have been assessed through December 31, 2007, there
      are no proposed or issued assessments or reassessments respecting the
      Company or any of the Company Subsidiaries pursuant to which there are
      amounts owing or discussions in respect thereof with any taxing authority
      and there are no outstanding objections to any assessment or reassessment
      of Taxes.  Neither Canada Revenue Agency, the Internal Revenue
      Service nor any other taxing authority or agency has asserted in writing
      or, to the knowledge of the Company, has threatened to assert against the
      Company or any Company Subsidiary any deficiency or claim for any Taxes
      and there are no outstanding actions, suits, proceedings, investigations,
      audits or claims existing or, to the knowledge of the Company, threatened
      against the Company or any Company
Subsidiary.

            

    

     

    
      	
               
      

            	
              (i)

            	
              The
      Company and the Company Subsidiaries have collected from each past and
      present customer (or other Person paying amounts to the Company and the
      Company Subsidiaries) the amount of all Taxes (including goods and
      services Tax and provincial, state and local sales Taxes) required to be
      collected, except where the failure to so collect has not and is not
      reasonably likely to result in a Company Material Adverse
      Effect.

            

    

     

    
      	
               
      

            	
              (j)

            	
              Except
      as set out on Schedule 3.16(j), neither the Company nor any of the Company
      Subsidiaries (i) is a party to any waiver or agreement extending the time
      within which to file any Tax Return or other document relating to Taxes,
      (ii) has executed or entered into any written agreement with, or obtained
      or applied for any written consents or written clearances or any other Tax
      rulings from, nor has there been any written agreement executed or entered
      into on behalf of any of them with, any taxing authority relating to any
      material amount of Taxes, (iii) has any Liability for the Taxes of another
      Person under U.S. Treasury Regulation Section 1.1502-6 (or any comparable
      provision of state, local or foreign Law), (iv) has, or has ever had, a
      permanent establishment in any country other than the country of its
      organization or been subject to Tax in a jurisdiction outside the country
      of its organization, or (v) has engaged in any “reportable transaction” as
      defined in U.S. Treasury Regulation Section
  1.6011-4(b).

            

    

     

    
      
         

      

      
        - 37
-

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (k)

            	
              The
      value of consideration paid or received by the Company and each of the
      Company Subsidiaries in respect of the acquisition, sale or transfer of
      any property or the provision of any services to or from any person with
      whom they do not deal at “arm’s length” (as defined for purposes of the
      ITA) has been equal to the fair market value of such property acquired,
      sold or transferred or services
provided.

            

    

     

    
      	
               
      

            	
              (l)

            	
              Except
      as described in Schedule 3.16(l), the Company and each of the Company
      Subsidiaries is in compliance in all material respects with all applicable
      Tax laws and guidelines relating to transfer pricing.  For
      greater certainty, and without limiting the foregoing, for all
      transactions between the Company and the Company Subsidiaries and any
      non-resident person with whom any of the Company and the Company
      Subsidiaries was not dealing at “arm’s length” for the purposes of the
      ITA, each of the Company and the Company Subsidiaries has made or obtained
      records or documents that satisfy, in all material respects, the
      applicable transfer pricing
requirements.

            

    

     

    
      	
               
      

            	
              (m)

            	
              Neither
      the Company nor any of the Company Subsidiaries has, within the last seven
      (7) years, benefited from a forgiveness of debt or entered into any
      transaction or arrangement (including conversion of debt into shares of
      its share capital) which could have resulted in the application of Section
      80 through and including Section 80.04 of the ITA or any corresponding
      provision of any provincial Tax
law.

            

    

     

    
      	
               
      

            	
              (n)

            	
              To
      the knowledge of the Company, there are no circumstances existing which
      could result in the application of Section 78 of the ITA or any
      corresponding provision of any provincial Tax law to the Company or any of
      the Company Subsidiaries.

            

    

     

    
      	
               
      

            	
              (o)

            	
              Neither
      the Company nor any of the Company Subsidiaries has (i) agreed to or is
      required to make any adjustments pursuant to a change in Tax accounting
      method, (ii) any knowledge that any taxing authority has proposed any such
      adjustment, or (iii) any application pending with any taxing authority
      requesting permission for any changes in Tax accounting
      methods.

            

    

     

    
      	
               
      

            	
              (p)

            	
              Neither
      the Company nor any of the Company Subsidiaries has any plan, arrangement
      or agreement providing for deferred compensation that is subject to
      Section 409A(a) or 457A of the Code or any asset, plan, arrangement or
      agreement that is subject to Section 409A(b) of the
  Code.

            

    

     

    
      
         

      

      
        - 38
-

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (q)

            	
              Each
      U.S. Subsidiary of the Company has complied with all record keeping and
      reporting obligations under Section 6038A of the
  Code.

            

    

     

    
      	
               
      

            	
              (r)

            	
              Neither
      the Company nor any of the Company Subsidiaries is a party to any
      agreement or arrangement that would result individually or in the
      aggregate in the payment of any amount that would not be deductible by the
      Company or such Company Subsidiary by reason of Sections 162, 280G or 404
      of the Code.

            

    

     

    Section
3.17         Environmental
Matters.

     

    
      	
               
      

            	
              (a)

            	
              Neither
      the Company nor any of the Company Subsidiaries is in violation of or has
      violated, during the three previous years, or has any Liability under, any
      Environmental Law and there are no facts, circumstances or conditions
      existing, initiated or occurring prior to the Effective Date which could
      result in Liability under Environmental Laws.  Without limiting
      the generality of the foregoing: (i)  there has been no Release
      of Hazardous Substances at, on, under or from any of the properties
      currently owned, leased or operated by the Company or any Company
      Subsidiary (including, without limitation, soils and surface and ground
      waters) during the period of the Company’s or any Company Subsidiary’s
      ownership, tenancy or operation of such property; (ii)  there
      has been no Release of Hazardous Substances at, on, under or from any of
      the properties formerly owned, leased or operated by the Company or any
      Company Subsidiary (including, without limitation, soils and surface and
      ground waters) during the period of the Company’s or any Company
      Subsidiary’s ownership, tenancy or operation of such property; (iii) none
      of the real property currently leased or operated by the Company or the
      Company Subsidiaries contains underground improvements, including but not
      limited to treatment or storage tanks, or underground piping associated
      with such tanks, used currently or in the past for the management of
      Hazardous Substances, and no portion of such real property is or has been
      used as a dump or landfill or consists of or contains filled-in land or
      wetlands; and (iv) neither PCB’s, “toxic mold,” asbestos-containing
      materials, nor any contamination are present on or in the real property
      currently or previously owned, operated or leased by the Company or the
      Company Subsidiaries or the improvements
  thereon.

            

    

     

    
      	
               
      

            	
              (b)

            	
              Neither
      the Company nor any Company Subsidiary has received any notice, demand,
      claim or request for information or other written communication alleging
      that the Company or any Company Subsidiary (i) is actually, potentially or
      allegedly liable under any Environmental Law for Remediation of Hazardous
      Substances, or (ii) may be in violation of or have any Liability under any
      Environmental Law.

            

    

     

    
      
         

      

      
        - 39
-

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (c)

            	
              The
      Company and each Company Subsidiary has applied for and maintains all
      material permits, licenses, consents, approvals and other authorizations
      required under any Environmental Law (“Environmental Permits”) and the
      Company and such Company Subsidiaries are in compliance in all material
      respects with the Environmental
Permits.

            

    

     

    
      	
               
      

            	
              (d)

            	
              Neither
      the Company nor any of the Company Subsidiaries has arranged, by contract,
      agreement or otherwise, for the transportation, disposal or treatment of
      Hazardous Substances at any location such that it is or could be liable
      for Remediation of such location pursuant to Environmental Laws, and no
      such location, nor any of the real property currently owned, operated, or
      leased by the Company or any of the Company Subsidiaries is listed on any
      governmental list or database of properties that may require
      Remediation.

            

    

     

    
      	
               
      

            	
              (e)

            	
              No
      authorization, notification, recording, filing, consent, waiting period,
      Remediation or approval is required under any Environmental Law in order
      to consummate the Transactions.

            

    

     

    Section
3.18         Insurance.

     

    
      	
               
      

            	
              (a)

            	
              True
      and complete copies of all insurance policies of the Company and the
      Company Subsidiaries relating to fire and casualty, general liability,
      business interruption, directors’ and officers’ liability, workers’
      compensation and workplace safety and insurance and other forms of
      insurance of any kind relating to the business and operations of the
      Company or any Company Subsidiary, or summaries thereof have been made
      available to Parent, and such policies are in full force and effect as of
      the date of this Agreement.

            

    

     

    
      	
               
      

            	
              (b)

            	
              The
      insurance maintained by the Company and the Company Subsidiaries
      adequately covers all material risks reasonably and prudently foreseeable
      in the operation and conduct of the business of the Company and the
      Company Subsidiaries which would be customary in the business carried on
      by the Company and the Company Subsidiaries and the Company and the
      Company Subsidiaries are not in material default under the terms of any
      such policy.

            

    

     

    
      	
               
      

            	
              (c)

            	
              There
      is no claim outstanding under any insurance policy of the Company or a
      Company Subsidiary as to which coverage has been questioned, denied or
      disputed by the underwriter of such policy, and there has been no notice
      of cancellation or termination of, or premium increase with respect to,
      any such policy.

            

    

     

    
      
         

      

      
        - 40
-

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (d)

            	
              The
      Company and the Company Subsidiaries have paid all premiums due under
      their insurance policies and none of the Company or any Company Subsidiary
      is in default in any material respect under the terms of any of their
      insurance policies.

            

    

     

    Section
3.19         Brokers.

     

    No
broker, finder or investment banker (other than Genuity Capital Markets and RBC
Capital Markets) is entitled to any brokerage, finder’s or other fee or
commission in connection with the Transactions based upon arrangements made by
or on behalf of the Company or any of the Company Subsidiaries.  The
Company has heretofore furnished to Parent a complete and correct copy of all
agreements between the Company and Genuity Capital Markets and RBC Capital
Markets pursuant to which such firms would be entitled to any payment related to
the Transactions.

     

    Section
3.20         Related Party Transactions;
Collateral Benefit.

     

    
      	
               
      

            	
              (a)

            	
              No
      executive officer, director or Affiliate of the Company or any Company
      Subsidiary, nor any immediate family member or Affiliate of such executive
      officer or director is entitled to receive directly or indirectly any
      benefit  that would constitute a “collateral benefit” within the
      meaning of Canadian Securities Legislation, as a consequence of the
      Transactions.

            

    

     

    
      	
               
      

            	
              (b)

            	
              Save
      for or pursuant to (i) the employment, management or consulting
      arrangements listed in Schedule 3.11 or Schedule 3.12 and the payments to
      be made thereunder, as disclosed therein, and (ii) compensation payable to
      the directors of the Company in accordance with the “Compensation of
      Directors” contained in the Company’s Management Information Circular of
      March 14, 2008, no executive officer, director or Affiliate of the Company
      or any Company Subsidiary, nor any immediate family member or Affiliate of
      such executive officer or director:

            

    

     

    
      	
               
      

            	
              (i)

            	
              is
      a party to any agreement, contract, commitment, arrangement or transaction
      with the Company or any Company
Subsidiary;

            

    

     

    
      	
               
      

            	
              (ii)

            	
              is
      entitled to any payment or transfer of any assets from the Company or any
      Company Subsidiary;

            

    

     

    
      	
               
      

            	
              (iii)

            	
              has
      any material interest in any material property used by the Company or any
      Company Subsidiary; or

            

    

     

    
      	
               
      

            	
              (iv)

            	
              has
      an interest in any customer or supplier of the Company or any Company
      Subsidiary or provider of any services to the Company or any Company
      Subsidiary, other than the ownership of less than 5% of the outstanding
      stock of any publicly-traded
company.

            

    

    
      
         

      

      
        - 41
-

        
          

        

      

      
         

      

    

     

    Section
3.21         Disclosure.

     

    
      	
               
      

            	
              (a)

            	
              True
      and complete copies of all documents listed in the Schedules attached
      hereto relating to the Company (the “Company Schedules”) have been made
      available or provided to Parent.

            

    

     

    
      	
               
      

            	
              (b)

            	
              The
      Company has made available to Parent all Books and Records. All such Books
      and Records are, in all material respects, complete and correct and have
      been maintained, in all material respects, in accordance with good
      business practices, including the maintenance of an adequate system of
      internal accounting controls, and the information in the Books and Records
      is accurately reflected in the Financial
  Statements.

            

    

     

    
      	
               
      

            	
              (c)

            	
              The
      minute books of the Company and each Company Subsidiary contain, in all
      material respects, accurate and complete records of all meetings held of,
      and corporate action by, the stockholders and the board of directors (and
      committees thereof) of the Company and each Company Subsidiary, and no
      meeting of any such stockholders or board of directors (or committees
      thereof) has been held for which minutes have not been prepared and are
      not contained in such minute books (except for meetings of the Company
      Board held since December 1, 2008).

            

    

     

    
      	
               
      

            	
              (d)

            	
              None
      of the representations or warranties made by the Company herein or in the
      Company Schedules, or in any certificate or document furnished by the
      Company pursuant to this Agreement, when all such documents are read
      together in their entirety, contains or will contain any untrue statement
      of a material fact, or omits to state any material fact necessary in order
      to make the statements contained herein or therein, in the light of the
      circumstances under which it was made, not
  misleading.

            

    

     

    Section
3.22         No Other Purchase
Agreements.

     

    The
Company and the Company Subsidiaries are not a party to any other contract,
agreement or understanding of any nature for the purchase or other acquisition
of any of their undertaking, property or assets, other than in the ordinary
course of business.

     

    Section
3.23         Privacy
Laws.

     

    
      	
               
      

            	
              (a)

            	
              The
      Company and each of the Company Subsidiaries are conducting and have
      conducted their respective
      businesses in compliance, in all material respects, with all applicable
      Privacy Laws.

            

    

     

    
      
         

      

      
        - 42
-

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (b)

            	
              The
      Company has a written privacy policy which governs the processing of
      Personal Information, and the Company is in compliance and has been in
      compliance, in all material respects, with such
  policy.

            

    

     

    
      	
               
      

            	
              (c)

            	
              Personal
      Information in the custody or control of the Company has been collected,
      used and disclosed with the consent of the individual to whom it relates
      and has been used only for the purposes for which it was initially
      collected.

            

    

     

    
      	
               
      

            	
              (d)

            	
              There
      has been no loss, theft or unauthorized processing of or access to
      Personal Information in the custody or control of the Company or of any of
      the Company Subsidiaries; and neither the Company nor any Company
      Subsidiary has received any written notice or other communication from any
      Person regarding or in connection with any actual, alleged, possible or
      potential violation of, or failure to comply with, any Privacy Laws or the
      Company’s privacy policy or with respect to the loss, theft or
      unauthorized processing of or access to Personal Information in the
      custody or control of the Company or the Company Subsidiaries.

            

    

     

    Section
3.24         Product Warranty; Product
Liability.

     

    Each
product manufactured, sold or delivered by the Company or any of the Company
Subsidiaries in conducting its business has been in conformity, with all product
specifications and all express and implied warranties, except where the failure
to do so would result in a Company Material Adverse Effect and except as set
forth on Schedule 3.24.  Neither the Company nor any of the Company
Subsidiaries has any liability for replacement or repair of any such products or
other damages in connection therewith or any other customer or product
obligations not reserved against on the Financial Statements.

     

    ARTICLE
IV

    
      REPRESENTATIONS
AND WARRANTIES OF PARENT AND PURCHASER

       

    

     

    As an
inducement to the Company to enter into this Agreement and to implement the
Transactions, the Purchaser Parties hereby, jointly and severally, represent and
warrant to the Company as follows:

     

    Section
4.01         Due Incorporation, Assets
and Liabilities.

     

    Parent is
a corporation duly organized, validly existing and in good standing under the
Laws of the State of Delaware.  Except as set forth on Schedule 4.01,
Parent is not qualified to do business as a foreign corporation in any
jurisdiction, and there is no jurisdiction in which the character of the
property owned or leased by Parent or the nature of its activities make
qualification of Parent in any such jurisdiction necessary, except where the
failure to so qualify would not have a Parent Material Adverse
Effect.  The Purchaser is a corporation duly organized, validly
existing under the Laws of Ontario, Canada.  Parent has all requisite
power and authority, corporate and otherwise, and all governmental licenses,
franchises, permits, authorizations, consents and approvals required to own,
lease, and operate its assets, properties and businesses and to carry on its
business as now conducted on the date hereof.  The Purchaser has not
conducted any business to date and has only engaged in certain activities
relating to its organization.  Parent has not adopted any plan, or
made any agreement in respect of any merger, consolidation, sale of all or
substantially all of its assets, reorganization, recapitalization, dissolution
or liquidation. Neither Parent or the Purchaser owns or has any interest in any
real or personal property. There are no options or other contracts or agreements
under which Parent or the Purchaser has any right or obligation to acquire or
lease any interest in real property or personal property. Except as set out on
Schedule 4.01, neither Parent nor the Purchaser has any Liability or
Indebtedness whether accrued, absolute, contingent, matured, unmatured or other
(whether or not required to be reflected in the Parent Financial Statements in
accordance with U.S. GAAP).

    
      
         

      

      
        - 43
-

        
          

        

      

      
         

      

    

     

    Section
4.02         Corporate
Authorization.

     

    The
execution, delivery and performance by Parent and the Purchaser of this
Agreement and each of the other Transaction Documents to which they are a party
and, except for a vote of the Parent Stockholders to approve the Transactions
contemplated by this Agreement, the consummation by Parent and the Purchaser of
the Transactions contemplated hereby and thereby are within the corporate powers
of Parent and the Purchaser and have been duly authorized by all necessary
corporate action on the part of Parent and the Purchaser.  This
Agreement constitutes, and upon their execution and delivery, each of the
Transaction Documents will constitute, a valid and legally binding agreement of
Parent or the Purchaser, as applicable, enforceable against each in accordance
with their respective terms.

     

    Section
4.03         Governmental
Authorization.

     

    Except as
set out on Schedule 4.03, none of the execution, delivery or performance by
Parent or the Purchaser of this Agreement or any Transaction Document requires
any consent, approval, license or other action by or in respect of, or
registration, declaration or filing with, any Governmental Authority by Parent
or the Purchaser.

     

    Section
4.04         No
Violation.

     

    Neither
the execution and delivery of this Agreement or any Transaction Document
Agreement to be executed by Parent or the Purchaser hereunder nor, provided that
Parent presents the Transactions contemplated by this Agreement to its
stockholders for approval and obtains the approval of the Parent Stockholders,
the consummation of the Transactions contemplated herein and therein will (a)
violate any provision of Parent’s or the Purchaser’s constating documents,
bylaws and other organizational documents (“Charter Documents”); (b) violate any
Laws or Orders to which either Parent or the Purchaser or their property is
subject, or (c) violate the provisions of any material agreement or other
material instrument binding upon or benefiting Parent or the
Purchaser.

    
      
         

      

      
        - 44
-

        
          

        

      

      
         

      

    

     

    Section
4.05         Consents.

     

    Except
for the required approval of the Parent Stockholders to the Parent Stockholder
Proposals, there are no agreements, commitments, arrangements, contracts or
other instruments binding upon Parent or the Purchaser or any of their
properties requiring a consent, approval, authorization, order or other action
of or filing with any Person as a result of the execution, delivery and
performance of this Agreement or any of the Transaction Documents or the
consummation of the Transactions contemplated hereby or thereby. The board of
directors of Parent (including any required committee or subgroup of the board
of directors of Parent) has, as of the date of this Agreement (i) determined
that the Arrangement and the other Transactions contemplated by this Agreement
are fair to, and in the best interests of Parent and its stockholders, and (ii)
duly approved this Agreement and the Transactions contemplated
hereby.

     

    Section
4.06         Litigation.

     

    There is
no Action, or to the knowledge of Parent, threatened against or affecting,
Parent, the Purchaser, any of their respective officers or directors, or the
business of Parent, before any court or arbitrator or any governmental body,
agency or official which if adversely determined against any of them, has or
could reasonably be expected to have a material adverse effect on the business,
assets, condition (financial or otherwise), liabilities, results or operations
or prospects of Parent or the Purchaser, or which in any manner challenges or
seeks to prevent, enjoin, alter or delay the Transactions contemplated
hereby.  There are no outstanding judgments against Parent or the
Purchaser.

     

    Section
4.07         Issuance of Parent Common
Stock.

     

    The
Parent Common Stock when issued in connection with the Transactions contemplated
herein, will be duly authorized and validly issued, fully paid and
non-assessable and will be freely tradable on resale under the Securities Act
that will apply to “affiliates” of the Company or Parent, as the term
“affiliates” is defined in Rule 144 of the Securities Act, pursuant to Rule
145(c) and (d) of the Securities Act. The Parent Common Stock to be issued in
connection with the Arrangement to Company Shareholders including the Parent
Common Stock to be issued upon the exercise of the Company RSUs and the Company
Warrants will not be subject to any statutory hold or restricted period under
Canadian Securities Laws and, subject to restrictions contained therein in
respect of “control distributions”, will be freely tradable within Canada by the
holders thereof. The Parent Common Stock to be issued in connection with the
Arrangement to Company Shareholders in exchange for the Company Common Stock
held by them, will not bear any Securities Act restrictive legend, and such
Parent Common Stock will not be “restricted securities” as defined under Rule
144 of the Securities Act, other than as may be required for Parent Common Stock
issued to persons that were “affiliates” of the Company or Parent prior to the
Effective Time or “affiliates” of Parent after the Effective Time. The shares of
Parent Common Stock issuable pursuant to the exercise or conversion of
securities of Parent exchanged for the Company RSUs and Company Warrants will be
“restricted securities” under Rule 144 of the Securities Act, unless the
issuance of such shares has been registered by an effective registration
statement filed with the SEC under the Securities Act.

    
      
         

      

      
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    Section
4.08         Fees.

     

    Except as
set forth on Schedule 4.08, there is no investment banker, broker, finder,
restructuring or other intermediary that has been retained by or is authorized
to act on behalf of the Parent or the Purchaser or any of their respective
Affiliates who might be entitled to any fee or commission from either the
Purchaser, Parent or any of its Affiliates upon consummation of the Transactions
contemplated by this Agreement.  The amount of any fee owed to any
Person listed on Schedule 4.08 is listed opposite such Person’s
name.

     

    Section
4.09         Charter Documents;
Legality.

     

    Parent
has previously delivered to the Company true and complete copies of the Parent’s
Charter Documents, as in effect or constituted on the date
hereof.  The execution, delivery, and, provided that Parent presents
the Transactions contemplated by this Agreement to its stockholders for
approval, performance by Parent and the Purchaser of this Agreement and any
Transaction Document to which Parent or the Purchaser is to be a party has not
violated and will not violate, and the consummation by Parent or the Purchaser
of the transactions contemplated hereby or thereby will not violate, any
of  Parent’s Charter Documents, the Purchaser’s Charter Documents or
any Law.

     

    Section
4.10         Capitalization and Ownership
of the Parent, Trust Fund.

     

    
      	
               
      

            	
              (a)

            	
              Schedule
      4.10 sets forth, with respect to the Parent, (i) Parent’s authorized
      capital, (ii) the number of Parent’s securities that are outstanding, and
      (iii) the number of securities convertible into or exercisable or
      exchangeable for the Parent’s securities.  All outstanding
      shares of Parent’s capital stock are, and all such shares that may be
      issued prior to the Effective Time and all shares of Parent Common Stock
      issuable pursuant to Article II hereof will be when issued, duly
      authorized, validly issued, fully paid and non-assessable and not subject
      to or issued in violation of any purchase option, call option, right of
      first refusal, preemptive right, subscription right or any similar right
      under any provision of the DGCL, the Parent’s Charter Documents or any
      contract to which Parent is a party or otherwise bound.  Except
      as set forth in the Parent SEC Documents (as defined herein), there is no
      contract, agreement, commitment, arrangement or understanding (whether
      written or oral, formal or informal) that requires or under any
      circumstance would require Parent to issue, or grant any right to acquire,
      any securities of the Parent, or any security or instrument exercisable or
      exchangeable for or convertible into, the capital stock or membership
      interest of the Parent, “phantom” stock rights, stock appreciation rights,
      stock-based performance units or to merge, consolidate, dissolve,
      liquidate, restructure, or recapitalize the
  Parent.

            

    

     

    
      
         

      

      
        - 46
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              (b)

            	
              As
      of the date hereof and at the Effective Time, Parent has and will have no
      less than U.S.$70.0 million (after giving effect to potential redemptions
      of the IPO Shares (as defined in the Parent’s Certificate of
      Incorporation) (the “Trust Fund”) invested in United States Government
      securities or in money market funds meeting certain conditions under Rule
      2a-7 promulgated under the Investment Company Act in a trust account (the
      “Trust Account”) administered by The American Stock Transfer and Trust
      Company (the “Trustee”) pursuant to the Investment Management Trust
      Agreement, dated as of April 17, 2007, between Parent and the
      Trustee.

            

    

     

    Section
4.11         Financial
Statements.

     

    Parent
has filed with the SEC true and correct copies of the audited consolidated
balance sheets of Parent and its consolidated subsidiaries as of June 30, 2007
and June 30, 2008, and the related consolidated statements of operations and
stockholders’ equity and cash flows for the year then ended and for the period
from June 30, 2006 through June 30, 2008, including footnotes thereto, audited
by BDO Seidman, LLP, registered independent public accountants (the “Parent
Financial Statements”).  The Parent Financial Statements (i) were
prepared in accordance with U.S. GAAP; (ii) fairly and accurately present the
Parent’s financial condition and the results of its operations as of their
respective dates and for the periods then ended, in all material respects; (iii)
contain and reflect all necessary adjustments and accruals for a fair
presentation of  Parent’s financial condition as of their dates, in
all material respects; and (iv) contain and reflect adequate provisions for all
reasonably anticipated liabilities for all material income, property, sales,
payroll or other Taxes applicable to Parent with respect to the periods then
ended.  Parent has heretofore delivered to the Company complete and
accurate copies of all “management letters” received by it from Parent’s
accountants and all responses during the last three years by lawyers engaged by
Parent to inquiries from Parent’s accountant or any predecessor
accountants.

     

    Except as
specifically disclosed or as reflected in the Parent SEC Documents, reflected or
fully reserved against in the Parent Financial Statements and for liabilities
and obligations of a similar nature and in similar amounts incurred in the
ordinary course of business since the date of the Parent Financial Statements,
there are no liabilities, debts or obligations of any nature (whether accrued,
absolute, contingent, liquidated or unliquidated, unasserted or otherwise)
relating to the Parent.  All debts and liabilities, fixed or
contingent, which should be included under U.S. GAAP on an accrual basis on the
Parent Financial Statements are included therein.

    
      
         

      

      
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    Section
4.12         Contracts, Payments on
Change of Control

     

    
      	
               
      

            	
              (a)

            	
              Schedule
      4.12 contains a complete list of all written contracts and agreements to
      which Parent or any of its Subsidiaries is a party. Each such contract and
      agreement is valid and binding on Parent or the Subsidiary that is a party
      thereto or bound thereby, as the case may be, is, in all material
      respects, in full force and effect against Parent or the relevant
      Subsidiary and represents the entire agreement between or among the
      parties thereto with respect to the subject matter
      thereof.  None of Parent or any Subsidiary or, to the knowledge
      of the Company, as of the date of this Agreement, any other party thereto,
      is in breach of, or default under any such contract or agreement. Parent
      has made available to the Company a true, complete and correct copy of
      each such contract or agreement, together with all material amendments,
      waivers or other changes thereto.

            

    

     

    
      	
               
      

            	
              (b)

            	
              There
      are no plans, contracts or agreements of Parent or the Purchaser pursuant
      to which any amount may become payable (whether currently or in the
      future) to any officer, director, employee or stockholder of Parent or the
      Purchaser as a result of or in connection with the Arrangement or any of
      the other Transactions contemplated by this
  Agreement.

            

    

     

    Section
4.13         Absence of Certain Changes
or Events.

     

    Except as
set forth in the Parent SEC Documents filed prior to the date of this Agreement,
and except as contemplated by this Agreement, since June 30, 2008, there has not
been: (i) any Parent Material Adverse Effect, (ii) any declaration, setting
aside or payment of any dividend on, or other distribution (whether in cash,
stock or property) in respect of, any Parent capital stock, or any purchase,
redemption or other acquisition by Parent of any Parent capital stock or any
other securities of Parent or any options, warrants, calls or rights to acquire
any such shares or other securities or (iii) any split, combination or
reclassification of any Parent capital stock.

     

    Section
4.14         Compliance with
Laws.

     

    Parent is
not in violation of, has not violated, and to the knowledge of Parent, is not
under investigation with respect to nor have been threatened to be charged with
or given notice of, any violation or alleged violation of, any Law or Order, nor
is there any basis for any such charge.

     

    Section
4.15         Ownership of Parent
Securities.

     

    Upon
issuance and delivery of the Parent Common Stock to each Company Shareholder
pursuant to this Agreement, the Parent Common Stock will be duly authorized and
validly issued, fully paid and non-assessable, free and clear of all Liens,
other than (i) restrictions arising from applicable securities laws, and (ii)
any Lien created by or through such Company Shareholder. The issuance and sale
of the Parent Common Stock pursuant hereto will not be subject to or give rise
to any preemptive rights or rights of first refusal.

    
      
         

      

      
        - 48
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    Section
4.16         Restrictions on Business
Activities.

     

    Since the
date of its incorporation, Parent has not conducted any business activities
other than activities directed toward the accomplishment of business
combinations.  There is no agreement, commitment, judgment,
injunction, order or decree binding upon Parent or to which Parent is a party
which has or could reasonably be expected to have the effect of prohibiting or
materially impairing any business practice of Parent, any acquisition of
property by Parent or the conduct of business by Parent as currently conducted
other than such effects, individually or in the aggregate, which have not had
and could not reasonably be expected to have, a Parent Material Adverse
Effect.

     

    Section
4.17         The
Purchaser.

     

    The
Purchaser was formed in the Province of Ontario on January •,
2009.  One hundred (100) shares of the common stock of the Purchaser
have been issued to Parent and other than such one hundred (100) shares no other
equity securities of the Purchaser have been issued and there are no agreements
by the Purchaser to issue any of its equity securities other than as provided
for in this Agreement.  Such one hundred (100) shares of common stock
issued to the Parent have been validly issued, are fully paid and non-assessable
and are owned by Parent free and clear of any Lien.  The Purchaser has
no liabilities, debts or obligations of any nature (whether accrued, absolute,
contingent, liquidated or unliquidated, unasserted or otherwise) except those
incurred in connection with this Agreement and the Transactions contemplated
hereby.

     

    Section
4.18         Securities Law
Matters.

     

    The
issuance of the Parent Common Stock under the Arrangement and the modification
of the Company RSUs as contemplated by Section 2.10 will not require
registration under the Securities Act.  The Parent Common Stock will
be issued and the Company RSUs will be modified in reliance upon the exemption
available pursuant to section 3(a)(10) of the Securities Act, which exempts
securities issued in exchange for one or more outstanding securities from the
general requirement of registration where the terms and conditions of the
issuance and exchange of such securities have been approved by any court of
competent jurisdiction, after a hearing upon the fairness of the terms and
conditions and exchange at which all persons to whom the securities will be
issued have the right to appear.  Parent Common Stock issued under the
Arrangement to persons who are Affiliates of the Company or Parent prior to the
Effective Time or Affiliates of Parent after the Effective Time may be subject
to resale restrictions under U.S. Securities Laws pursuant to Securities Act
Rule 144 or 145(c) and (d), each as applicable.

     

    Section
4.19         Other
Agreements

     

    Parent
and its Subsidiaries are not a party to any outstanding contract, agreement or
understanding of any nature for the purchase or other acquisition of any of
their shares, undertaking, property or assets, or for the purchase or other
acquisition of any of the shares, undertaking, property or assets of any other
person.

     

    
      
         

      

      
        - 49
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    Section
4.20         Parent SEC
Documents.

     

    
      	
               
      

            	
              (a)

            	
              Parent
      has filed and furnished all required reports, schedules, forms,
      prospectuses, and registration, proxy and other statements with the SEC
      since July 14, 2006 (collectively, and in each case including all exhibits
      and schedules thereto and documents incorporated by reference therein, the
      “Parent SEC Documents”).  As of their respective effective dates
      (in the case of Parent SEC Documents that are registration statements
      filed pursuant to the requirements of the Securities Act) and as of their
      respective SEC filing dates (in the case of all other Parent SEC
      Documents), the Parent SEC Documents complied in all material respects
      with the requirements of the Exchange Act or the Securities Act, as the
      case may be, applicable to such Parent SEC Documents, and none of the
      Parent SEC Documents as of such respective dates contained any untrue
      statement of a material fact or omitted to state a material fact required
      to be stated therein or necessary in order to make the statements therein,
      in light of the circumstances under which they were made, not
      misleading.  The consolidated financial statements of Parent
      included in the Parent SEC Documents comply in all material respects with
      applicable accounting requirements and the published rules and regulations
      of the SEC with respect thereto, have been prepared in accordance with
      U.S. GAAP (except, in the case of unaudited statements, as indicated in
      the notes thereto applied on a consistent basis during the periods
      involved (except as may be indicated in the notes thereto) and fairly
      present in all material respects the financial position of Parent and its
      consolidated Subsidiaries as of the dates thereof and the consolidated
      results of their operations and cash flows for the periods then ended
      (subject, in the case of unaudited statements, to normal year-end audit
      adjustments).

            

    

     

    
      	
               
      

            	
              (b)

            	
              Parent
      has established and maintains internal control over financial reporting
      and disclosure controls and procedures (as such terms are defined in Rule
      13a-15 and Rule 15d-15 under the Exchange Act); such disclosure controls
      and procedures are designed to ensure that material information relating
      to Parent, including its consolidated Subsidiaries, required to be
      disclosed by Parent in the reports that it files or furnishes under the
      Exchange Act is accumulated and communicated to Parent’s principal
      executive officer and its principal financial officer to allow timely
      decisions regarding required disclosure; and such disclosure controls and
      procedures are effective to ensure that information required to be
      disclosed by Parent in the reports that it files or furnishes under the
      Exchange Act is recorded, processed, summarized and reported within the
      time periods specified in SEC rules and forms.  The principal
      executive officer and the principal financial officer of Parent have made
      all certifications required by the Sarbanes-Oxley Act of 2002, the
      Exchange Act and any related rules and regulations promulgated by the SEC
      with respect to the Parent SEC Documents, and the statements contained in
      such certifications are complete and
correct.

            

    

     

    
      
         

      

      
        - 50
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              (c)

            	
              
                The
      Parent Common Stock is listed on the NYSE Alternext US.  Parent
      has not been notified of any default or alleged default by it of any
      material requirement of the NYSE Alternext US or applicable U.S.
      Securities Laws.  No U.S. Securities Regulator has issued any
      order preventing or suspending trading of any securities of Parent and
      Parent is not in material default of any requirement of applicable U.S.
      Securities Laws.

              

            

    

     

    
      	
               
      

            	
              (d)

            	
              
                (i)
      Parent has filed all reports required to be filed by it under U.S.
      Securities Laws since January 1, 2007, except where the failure to so file
      has not and is not reasonably likely to result in a Parent Material
      Adverse Effect; (ii) at the time that they were filed or, if amended, as
      of the date of such amendment, such reports complied in all material
      respects, and each report subsequently filed by Parent with the U.S.
      Securities Regulators will, on the date filed, comply in all material
      respects with all applicable requirements of U.S. Securities Laws as in
      effect on the date so filed; (iii) such reports did not or will not, at
      the time they were or will be filed, or, if amended, as of the date of
      such amendment, contain any misrepresentation; (iv) no material change has
      occurred in relation to Parent which is not disclosed in such reports,
      and, other than in connection with SEC reviews providing comments on
      registration statements filed pursuant to the Securities Act, all of which
      comments have been resolved, Parent is not the subject of any active
      formal inquiries or interrogatories, whether in writing or otherwise, from
      any U.S. Securities Regulator, the NYSE Alternext US or any other
      Governmental Authority, or, to the knowledge of Parent, been the subject
      of any investigation, audit, review or hearing by or in front of such
      Persons, in each case with respect to any of such reports or any of the
      information contained
therein.

              

            

    

     

    
      	
               
      

            	
              (e)

            	
              Each
      of the consolidated financial statements contained in the reports filed by
      Parent under U.S. Securities Laws since January 1, 2007, has been and, as
      regards such financial statements prepared after the date hereof, will be,
      prepared in accordance with U.S. GAAP, applied on a consistent basis
      throughout the periods indicated, except as disclosed therein, and each
      fairly presents or will fairly present, in all material respects, the
      consolidated financial position, results of operations and cash flows of
      Parent and its consolidated Subsidiaries as at the respective dates
      thereof and for the respective periods indicated therein (subject, in the
      case of unaudited statements, to normal and recurring year-end
      adjustments) and reflects appropriate and adequate reserves for contingent
      Liabilities in accordance with such generally accepted accounting
      principles.

            

    

     

    
      
         

      

      
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    ARTICLE
V

    COVENANTS
OF THE COMPANY

     

    Section
5.01         Conduct of the
Business.

     

    From the
date hereof through the Effective Date, the Company and each Company Subsidiary
shall conduct the Business only in the ordinary course, consistent with past
practices, in a manner consistent with the needs of the Business from the date
hereof to the Effective Time.  Without limiting the foregoing, the
Company will use its commercially reasonable efforts to preserve intact the
Company’s business relationships with employees, suppliers, customers and other
third parties and use its commercially reasonable efforts to maintain its
business and operations as an ongoing business consistent with the needs of the
business and its operating budget for the current fiscal year. The Company shall
not take any actions or enter into any transactions that would have a material
adverse impact on the Company and the Company Subsidiaries, without the prior
written consent of Parent, such consent not to be unreasonably withheld or
delayed.  In addition, the Company will not (i) take or agree to take
any action that might make any representation or warranty of the Company
hereunder inaccurate in any material respect at, or as of any time prior to, the
Effective Date or (ii) omit to take, or agree to omit to take, any action
necessary to prevent any such representation or warranty from being inaccurate
in any material respect at any such time.

     

    For
example, from the date hereof until the Effective Date, without Parent’s prior
written consent, such consent not to be unreasonably withheld or delayed,
neither the Company nor any Company Subsidiary shall:

     

    
      	
               
      

            	
              (a)

            	
              make
      any capital expenditures other than in the ordinary course of business
      consistent with past practice, which is not provided for in the most
      recently approved capital expenditure plan of the
  Company;

            

    

     

    
      	
               
      

            	
              (b)

            	
              except
      as contemplated by this Agreement, declare or promise to pay any dividends
      or other distributions with respect to its capital stock or equity
      securities other than distributions by wholly-owned Company Subsidiaries
      or tax distributions in the ordinary course consistent with past practice,
      or pay, declare or promise to pay any other payments to any Company
      Shareholder or any Affiliate of the
Company;

            

    

     

    
      	
               
      

            	
              (c)

            	
              except
      for indebtedness for borrowed money currently outstanding, and
      indebtedness for borrowed money that may arise among the Company and the
      Company Subsidiaries, obtain or suffer to exist any further indebtedness
      for borrowed money in excess of U.S.$15 million, in the
      aggregate;

            

    

     

    
      	
               
      

            	
              (d)

            	
              merge
      or consolidate with or acquire any other Person or be acquired by any
      other Person other than as provided by this
  Agreement;

            

    

     

    
      
         

      

      
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              (e)

            	
              extend
      any loans in excess of CAD$50,000 to any Person, other than travel,
      relocation or other expense advances to employees in the ordinary course
      of business;

            

    

     

    
      	
               
      

            	
              (f)

            	
              except
      in connection with the Company Financing, issue, redeem or repurchase any
      shares of its capital stock, other than pursuant to options, warrants or
      other rights existing on the date hereof or granted between the date
      hereof and the Effective Time to employees and other service providers in
      the ordinary course of business and pursuant to the terms of the
      arrangements with such employees and service providers;
  or

            

    

     

    
      	
               
      

            	
              (g)

            	
              agree
      to do any of the foregoing.

            

    

     

    Section
5.02         Access to
Information.

     

    From the
date hereof until and including the Effective Date, the Company and each Company
Subsidiary shall (a) continue to give Parent, its counsel and other
representatives access to the offices, properties and Books and Records of the
Company and each Company Subsidiary during normal business hours upon reasonable
notice, (b) furnish to Parent, its counsel and other representatives such
information relating to the Business as such Persons may reasonably request and
(c) cause the employees, counsel, accountants and representatives of the Company
and each Company Subsidiary to cooperate with Parent in its investigation of the
Business; provided that no investigation pursuant to this Section 5.02 (or any
investigation prior to the date hereof) shall affect any representation or
warranty given by the Company.

     

    Section
5.03         Notices of Certain
Events.

     

    The
Company shall promptly notify Parent of:

     

    
      	
               
      

            	
              (a)

            	
              any
      notice or other communication from any Person alleging or raising the
      possibility that the consent of such Person is or may be required in
      connection with the Transactions or that the Transactions might give rise
      to any claims or causes of action or other rights by or on behalf of such
      Person or result in the loss of any rights or privileges of the Company or
      any Company Subsidiary to any such
Person;

            

    

     

    
      	
               
      

            	
              (b)

            	
              any
      notice or other communication from any regulatory or Governmental
      Authority in connection with the
Transactions;

            

    

     

    
      	
               
      

            	
              (c)

            	
              any
      Actions commenced or threatened against, relating to or involving or
      otherwise affecting the Company, any Company Subsidiary or the Business or
      that relate to the consummation of the Transactions;
  and

            

    

     

    
      
         

      

      
        - 53
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              (d)

            	
              the
      occurrence of any fact or circumstance which make any representation made
      hereunder by the Company false in any material
  respect.

            

    

     

    Section
5.04         Reporting and Compliance
With Law.

     

    From the
date hereof through the Effective Date, the Company and each Company Subsidiary
shall duly and timely file all Tax Returns required to be filed with
Governmental Authorities, pay any and all Taxes required by any Governmental
Authority and duly observe and conform, in all material respects, to all
applicable Laws.

     

    ARTICLE
VI

    COVENANTS
OF ALL PARTIES

     

    Section
6.01         Provisions Relating to
Exclusivity.

     

    
      	
               
      

            	
              (a)

            	
              Each
      of the Company and Parent, for themselves and each of their Affiliates,
      agrees to the respective provisions of this Section 6.01 from the date
      hereof to the date of termination of this Agreement (the “Exclusivity
      Period”).

            

    

     

    
      	
               
      

            	
              (b)

            	
              
                In
      consideration of Section 6.01(g), Parent and the Company acknowledge and
      agree that from and after the date hereof and until the required approval
      of the Arrangement by the  Company Shareholders and by Parent
      Stockholders  is obtained, the
      discussions and  negotiations of the Company with Parent shall
      be on a non-exclusive basis and the Company shall be permitted to
      continue, commence or otherwise carry on discussions relating to a
      possible alternate transaction with those Persons listed on Schedule
      6.01(b) and with any other Person, without restriction. In this connection
      the Company and each of its respective officers, directors, employees,
      agents, affiliates and advisors, as applicable (collectively, the “Company
      Representatives”): (i) are free to deal directly or indirectly with any
      Person with respect to negotiating, entering into and/or completing a
      transaction regarding the acquisition of or investment in the Company
      (whether by way of merger, purchase of capital stock, purchase of assets
      or otherwise) of all or substantially all of the capital stock or assets
      of the Company (a “Potential Transaction”), (ii) are free to provide
      information or documentation with respect to the Company to any Person,
      and (iii) may enter into an agreement with any Person providing for a
      Potential Transaction.

              

            

    

     

    
      	
               
      

            	
              (c)

            	
              Subject
      to Section 6.02(a), beginning on March 15, 2009 and during the balance of
      the Exclusivity Period or, in the event that the Proxy Statement has not
      been mailed to the Stockholders of the Parent prior to April 7, 2009,
      until April 7, 2009, the Company and the Company Representatives shall
      deal, directly or indirectly, exclusively with Parent regarding a
      Potential Transaction and, without the prior written consent of Parent,
      the Company and the Company Representatives, directly or indirectly, will
      not (i) encourage, solicit, initiate discussions or engage in negotiations
      with any person (whether such negotiations are initiated by the Company, a
      Company Representative or otherwise), other than Parent, relating to a
      Potential Transaction, (ii) provide information or documentation with
      respect to the Company to any Person, other than Parent, or a person
      designated by Parent relating to a Potential Transaction, or (iii) enter
      into an agreement with any person, other than Parent or a person
      designated by Parent, providing for a Potential
    Transaction.

            

    

     

    
      
         

      

      
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              (d)

            	
              Notwithstanding
      the provisions of Section 6.01(a)-(c), the Company will
      have the right to pursue, negotiate and enter into and complete a joint
      venture, partnership, teaming arrangement or other strategic alliance with
      any Person with respect to the Company’s Electronic Systems business (the
      “ES Business Transaction”) at any time, whether before or after the
      required approval of the Arrangement by the  Company
      Shareholders is obtained.

            

    

     

    
      	
               
      

            	
              (e)

            	
              During
      the Exclusivity Period, Parent and its respective officers, directors,
      employees, agents, affiliates and advisors, as applicable (collectively,
      the “Parent Group Representatives”) shall deal, directly or indirectly,
      exclusively with the Company regarding an acquisition or investment by
      Parent (whether by way of merger, purchase of capital stock, purchase of
      assets or otherwise) and, without the prior written consent of the
      Company, will not (i) encourage, solicit, initiate discussions or engage
      in negotiations with any person (whether such negotiations are initiated
      by Parent, the Parent Group Representatives or otherwise, other than the
      Company, relating to the possible acquisition of or investment in any
      other company by Parent (whether by way of merger, purchase of capital
      stock, purchase of assets or otherwise) or any material portion of the
      capital stock or assets of any other company by the Purchaser (a
      “Potential Alternative Transaction”), (ii) receive or review any
      information or documentation with respect to any other company from any
      Person, other than the Company, relating to a Potential Alternative
      Transaction or (iii) enter into an agreement with any Person, other than
      the Company or a Person designated by the Company, providing for a
      Potential Alternative Transaction.

            

    

     

    
      	
               
      

            	
              (f)

            	
              
                During
      the Exclusivity Period and subject in all cases to the confidentiality
      provision of this Agreement and the Confidentiality Agreement, the Company
      and the Company Subsidiaries shall afford, and, with respect to clause
      (ii) below, the Company shall request its accountants to afford, to the
      officers, accountants, counsel and other representatives of Parent
      reasonable access to the properties, books, records (including tax returns
      filed and those in preparation) and executive personnel of the Company and
      the Company Subsidiaries so that (i) Parent may have a full opportunity to
      make such investigation as it reasonably desires to make of the Company
      and the Company Subsidiaries, and (ii) the accountants of Parent have full
      access, to the extent applicable, to the audit work papers and other
      records of the independent chartered accountants of the Company and the
      Company Subsidiaries. Additionally, upon reasonable notice by Parent to
      the Company and at the times and in accordance with the procedures to be
      mutually agreed upon by Parent and the Company, and subject in all cases
      to the terms and conditions of the confidentiality provisions of this
      Agreement and the Confidentiality Agreement, the Company will permit
      Parent and its representatives to make such reasonable inspections of the
      Company and its operations (and those of the Company Subsidiaries) as
      Parent may reasonably require and the Company will cause its officers (and
      the Company Subsidiaries’ officers) to furnish Parent with such financial
      and operating data and other information with respect to the business and
      properties of the Company and the Company Subsidiaries as Parent may from
      time to time reasonably
request.

              

            

    

     

    
      
         

      

      
        - 55
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              (g)

            	
              In
      consideration of the substantial time, cost and financial risk for Parent
      and in the process of moving toward a successful Transaction and in light
      of the non-exclusive nature of the arrangements between the Company and
      Parent, the Company agrees to pay to Parent or its designate a break fee
      of U.S.$5.0 million (the “Break Fee”) in the event that: (a) this
      Agreement has not been terminated during the Exclusivity Period pursuant
      to (i) Section 8.01, (ii) Section
      8.02(a), due to a breach or failure by Parent to fulfill its obligations
      under this Agreement,  or (iii) Section 8.02(c); (b) Parent has
      not announced another Potential Alternative Transaction on or prior to the
      completion of a Potential Transaction, and (c) the Company is successful
      in completing a Potential Transaction with (i) one or more of the entities
      listed on Schedule 6.01(b) by April 30, 2010, (ii) a Person not listed on
      Schedule 6.01(b) that makes an unsolicited bid for a majority of the
      Company’s capital stock on or prior to April 17, 2009 with the purpose of
      taking control of the Company, or (iii) an entity that makes a Superior
      Proposal. If and when the Break Fee becomes due, the Company shall within
      five (5) Business Days thereof and following the termination of this
      Agreement and the Transactions, pay the entire Break Fee by wire transfer
      of immediately available funds to Parent or its designee to an account
      designated by Parent. For greater certainty, no Break Fee will be payable
      in the event that the Parent Stockholders vote against the Parent
      Stockholder Proposals relating to the Arrangement at the Parent
      Stockholders Meeting, provided that the Company proceeds expeditiously and
      in good faith towards approval of the Arrangement Resolution by the
      Company Shareholders.

            

    

     

    
      
         

      

      
        - 56
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              (h)

            	
              
                The
      Company also agrees that in the event that: (a) this Agreement has not
      been terminated during the Exclusivity Period pursuant to (i) Section
      8.01, (ii)
      Section 8.02(a), due to a breach or failure by Parent to fulfill its
      obligations under this Agreement, or (iii) Section 8.02(c); (b) Parent has
      not announced another Potential Alternative Transaction on or prior to the
      completion of a Potential Transaction,  and  (c) the Company is successful in
      completing by April 30, 2010 a Potential Transaction with a Person that
      the Company has provided information to or entered into negotiations with
      prior to April 17, 2009, and no Break Fee is otherwise payable pursuant to
      Section 6.01(g), the Company’s only obligation to Parent under this
      Article 6 in connection with such Potential Transaction will be to
      reimburse Parent for its reasonable costs and expenses incurred in
      connection with its negotiations with the Company in respect of the
      Transactions from and after January 6, 2009, up to a maximum of
      CAD$500,000 (the “Reimbursement Fee”). If and when the Reimbursement Fee
      becomes due, the Company shall within five (5) Business Days thereof and
      following the termination of this Agreement and the Transactions, pay the
      entire Reimbursement Fee by wire transfer of immediately available funds
      to Parent or its designee to an account designated by Parent. For greater
      certainty, the Reimbursement Fee will not be payable in the event that the
      Parent Stockholders vote against the Parent Stockholder Proposals at the
      Parent Stockholders Meeting, provided that the Company proceeds
      expeditiously and in good faith towards approval of the Arrangement
      Resolution by the Company
Shareholders.

              

            

    

     

    Section
6.02         Superior
Proposal.

     

    
      	
               
      

            	
              (a)

            	
              At
      any time during the Exclusivity Period, the Company Board may furnish
      information to, and enter into discussions with, a Person who has made an
      unsolicited written proposal or offer regarding an Acquisition Proposal
      (as defined below), and with respect to which (i) the Company Board has
      determined, in its good faith judgment (after consultation with its
      financial advisor), that such proposal or offer constitutes or could
      reasonably be expected to result in a Superior Proposal (as defined
      below), (ii) the Company Board has determined, in its good faith judgment
      after consultation with outside legal counsel, that, in light of such
      Superior Proposal, the failure to furnish such information or to enter
      into such discussions would result in a breach of its fiduciary
      obligations under applicable Law, (iii) the Company Board has provided
      written notice to Parent of its intent to furnish information or enter
      into discussions with such Person at least three Business Days prior to
      taking any such action, and (iv) the Company Board has obtained from such
      Person an executed confidentiality agreement containing confidentiality
      provisions no less favourable to the Company than those contained in the
      Confidentiality Agreement, provided that such confidentiality agreement
      shall not preclude such Person from making the Acquisition Proposal. Upon
      the receipt of a Superior Proposal, the Company shall be entitled to
      withdraw the Recommendation, and terminate this Agreement and the
      Transactions immediately prior to entering into a binding agreement
      relating to the Superior Proposal.

            

    

     

    
      
         

      

      
        - 57
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              (b)

            	
              The
      Company agrees that in addition to the obligations of the Company set
      forth in paragraph (a) of this Section 6.02, immediately upon receipt
      thereof, the Company shall advise Parent in writing of any request for
      information or any Acquisition Proposal, or any inquiry, discussions or
      negotiations with respect to any Acquisition Proposal and the terms and
      conditions of such request for information, Acquisition Proposal, inquiry,
      discussions or negotiations and the Company shall promptly provide to
      Parent copies of any written materials received by the Company in
      connection with any of the foregoing, and the identity of the Person or
      group making any such request for information, Acquisition Proposal or
      inquiry or with whom any discussions or negotiations may be taking
      place.  The Company agrees that it shall keep Parent informed of
      the status, terms and material details (including amendments or proposed
      amendments) of any such request for information, Acquisition Proposal or
      inquiry and keep Parent informed as to the details of any information
      requested of or provided by the Company and as to the status and material
      terms of all substantive discussions or negotiations with respect to any
      such request, Acquisition Proposal or inquiry.  The Company
      agrees that it shall simultaneously provide to Parent any non-public
      information concerning the Company that may be provided to any other
      Person or group in connection with any Acquisition Proposal which was not
      previously provided to Parent.

            

    

     

    
      	
               
      

            	
              (c)

            	
              The
      Company shall as promptly as practicable reaffirm the Recommendation of
      the Transaction by press release after any written Acquisition Proposal
      (which is determined not to be a Superior Proposal) is publicly announced
      or made.

            

    

     

    
      	
               
      

            	
              (d)

            	
              “Acquisition
      Proposal” means any proposal or offer for a transaction,
      consolidation, business combination, sale or other transfer or disposition
      of substantial assets, sale, exchange, transfer of, or take-over bid for,
      shares of capital stock or other similar transaction (other than the
      Transactions) involving the Company or any Company
    Subsidiary.

            

    

     

    
      	
               
      

            	
              (e)

            	
              “Superior
      Proposal” means a  unsolicited  bona fide written offer
      made by a third party to consummate an Acquisition Proposal during the
      Exclusivity Period on terms (including conditions to consummation of the
      contemplated transaction) that the Company Board determines, in its good
      faith judgment (after consultation with its financial advisor), to be more
      favourable to the Company Shareholders, from a financial point of view,
      than the Transactions contemplated in this Agreement, is reasonably
      capable of being consummated, and in respect of which, if the
      consideration is to be paid in cash or partly in cash, the third party has
      made at that time, in the good faith judgment of the Company Board,
      adequate arrangements to ensure that the required funds are available to
      effect payment in full for all securities of the Company that the third
      party has offered to acquire.

            

    

     

    
      
         

      

      
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    Section
6.03         Best Efforts; Further
Assurances.

     

    Subject
to the terms and conditions of this Agreement, each party shall use its
commercially reasonable efforts to take, or cause to be taken, all actions and
to do, or cause to be done, all things necessary or desirable under applicable
Laws to consummate and implement expeditiously the Transactions contemplated by
this Agreement, in the case of the Company, as reasonably requested by Parent,
including promptly providing updated financial statements and financial
information for use in the Proxy Statement or other public filings, as requested
by Parent, and, in the case of Parent, all information reasonably requested by
the Company which is required or appropriate for inclusion in the Circular, a
prospectus to be filed in connection with the Company Financing (which Circular
and related documents will be subject to the Parent’s approval, not to be
unreasonably withheld) or any other document required to be prepared by the
Company pursuant to Canadian Securities Laws and/or the rules and policies of
the TSX in connection with the Transactions or any amendments or supplements
thereto. The parties hereto shall execute and deliver such other documents,
certificates, agreements and other writings and take such other actions as may
be necessary or desirable in order to consummate or implement expeditiously the
Transactions contemplated by this Agreement.

     

    Section
6.04         Publicity; Securities Law
Filings.

     

    Subject
to Section 6.04, from the date hereof through the Effective Date, no public
release or announcement concerning this Agreement, the Arrangement or the other
Transactions contemplated hereby shall be issued by any party without the prior
consent of Parent and the Company (which consent shall not be unreasonably
withheld or delayed), except as such release or announcement may be required by
Law or the rules or regulations of any United States, Canadian or foreign
securities exchange, in which case the party required to make the release or
announcement shall allow the other parties reasonable time to comment on such
release or announcement in advance of such issuance; provided, however,
that the Company and Parent may, in consultation with each other, make internal
announcements to their respective employees that are consistent with the
parties’ prior public disclosures regarding the Transactions after reasonable
prior notice to and consultation with the other. Parent will prepare and file
one or more Current Reports on Form 8-K pursuant to the Exchange Act to report
required information under US Securities Laws (including information required by
Form 10) in connection with the execution of this Agreement and the other
Transaction Documents, as well as to file additional proxy solicitation
materials.  Any language included in such Current Report that reflects
the Company’s comments, as well as any text as to which the Company has not
commented after being given a reasonable opportunity to do so, shall, be deemed
to have been approved by the Company and may thereafter be used by Parent in
other filings made by it with the SEC and in other documents distributed by
Parent in connection with the Transactions without further review or consent of
the Company. Parent acknowledges that the Company will prepare and file one or
more material change reports on Form 51-102F3 pursuant to the Canadian
Securities Laws to report the execution of this Agreement and the other
Transaction Documents, as well as file any other documents that may be required
to be prepared by the Company pursuant to Canadian Securities Laws and/or the
rules and policies of the TSX in connection with the
Transactions.  Any language included in such documents that reflects
Parent’s comments, as well as any text as to which Parent has not commented
after being given a reasonable opportunity to do so, shall be deemed to have
been approved by Parent and may thereafter be used by Company in other filings
made by it with the Canadian Securities Regulators and in other documents
distributed by Company in connection with the Transactions without further
review or consent of Parent.

    
      
         

      

      
        - 59
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    Section
6.05         Confidentiality.

     

    Except as
otherwise required by law, no party shall disclose to any other Person or use
(whether for the account of any such party or any other party) any confidential
information or proprietary work product of (i) Parent, the Purchaser or their
advisors, without the prior written consent of Parent, or a person authorized
thereby, or (ii) the Company, any Company Subsidiary, or their advisors, without
the prior written consent of the Company; provided, however, that any such party
may disclose or use any such information (a) as has become generally available
to the public other than through a breach of this Agreement or the
Confidentiality Agreement by such party or any of its Affiliates and
representatives, (b) as becomes available to such party on a non-confidential
basis from a source other than any other party hereto or such other party’s
Affiliates or representatives, provided that such source is not known or
reasonably believed by such party to be bound by a confidentiality agreement or
other obligations of secrecy, (c) as may be required in any report, filing,
statement or testimony required to be submitted to any Governmental Authority
having or claiming to have jurisdiction over it, or as may be otherwise required
by applicable Law, or as may be required in response to any summons or subpoena
or in connection with any litigation, (d) as may reasonably be required to
obtain any consent from a Governmental Authority or other Person required in
order to consummate the transactions contemplated by this Agreement, or (e) as
may be necessary to establish such party’s rights under this
Agreement.  In the event a party believes that it is required to
disclose any such confidential information pursuant to applicable Laws, such
party shall give timely written notice to the other party so that such other
party may have an opportunity to obtain a protective order or other appropriate
relief.

    
      
         

      

      
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    Section
6.06         Current
Information.

     

    During
the period from the date of this Agreement to the Effective Time, each of the
Company and Parent shall cause one or more of its designated representatives to
confer with representatives of the other party on a monthly basis regarding its
business, operations, properties, assets and financial condition and matters
relating to the completion of the Transactions contemplated herein. On a monthly
basis, the Company agrees to provide Parent, and Parent agrees to provide the
Company, with internally prepared profit and loss statements no later than 20
Business Days after the close of each fiscal month, including the month of
December 2008 and each month thereafter. Parent shall file the Parent SEC
Documents with the SEC, and the Company shall make its required filings with the
Canadian Securities Regulators on a timely basis, and shall provide a draft
report to each other at least one Business Day prior to the proposed filing
date.

     

    Section
6.07         Tax
Matters.

     

    The
Company shall prepare or cause to be prepared and file or cause to be filed on a
timely basis all Tax Returns with respect to the Company and the Company
Subsidiaries for all taxable periods ending on or prior to the Effective
Date.  Such Tax Returns shall be true, correct and complete, shall be
prepared on a basis consistent with the similar Tax Returns for the immediately
preceding periods and shall not make, amend, revoke or terminate any election or
change any accounting practice or procedure without Parent’s
consent.  The Company shall give a copy of each such Tax Return to
Parent with sufficient time for its review and comment prior to
filing.  After the Effective Date, Parent will permit the Company to
have reasonable access to Parent’s respective officers, directors, employees,
agents, assets and properties and all relevant Books and Records relating to the
Business and assets of the Company during normal business hours and will furnish
to the Company such information, financial records and other documents relating
to the Company and the Business as may reasonably be requested, provided, however,
that such access and information is reasonably related to the completion of the
Tax Returns the Company is required to file pursuant to this Section
6.07.

     

    For
purposes of this Agreement, any Taxes for a period which includes but does not
end on the Effective Date shall be allocated between the period through and
including the Effective Date (the “Effective Date Period”) and the balance of
the period based on an interim closing of the books as of the Effective Time,
provided, however, that any real property or personal property taxes and any
annual exemption amounts shall be allocated based on the relative number of days
in the Effective Date Period and the balance of the period.

    
      
         

      

      
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    Section
6.08         Indemnification.

     

    
      	
               
      

            	
              (a)

            	
              From
      and after the Effective Time, Parent will, and will cause the Company to,
      fulfill and honor in all respects the obligations of the Company pursuant
      to any indemnification agreements between the Company and its directors
      and officers immediately prior to the Effective Time (the “Indemnified
      Parties”), subject to applicable Law.  The constitutional
      documents and bylaws of Parent and the Company will contain provisions
      with respect to exculpation and indemnification that are at least as
      favorable to the Indemnified Parties as those constitutional document and
      bylaws of the Company as in effect on the date hereof, which provisions
      will not be amended, repealed or otherwise modified for a period of six
      years from the Effective Time in any manner that would adversely affect
      the rights thereunder of individuals who, immediately prior to the
      Effective Time, were directors, officers, employees or agents of the
      Company, unless such modification is required by
  Law.

            

    

     

    
      	
               
      

            	
              (b)

            	
              For
      a period of three years after the Effective Time, Parent will, and will
      cause the Company to, use all reasonable efforts to cause to be maintained
      directors’ and officers’ liability insurance maintained by the Company
      covering those persons who are covered by the Company’s directors’ and
      officers’ liability insurance policy as of the date hereof on terms
      comparable to those applicable to the current directors and officers of
      the Company for a period of three years; provided,
      however, that in no event will Parent or the Company be required to
      expend in excess of one hundred percent (100%) of the annual premium
      currently paid by the Company for such coverage (and to the extent the
      annual premium would exceed one hundred percent (100%) of the annual
      premium currently paid by the Company for such coverage, Parent and the
      Company shall use all reasonable efforts to cause to be maintained the
      maximum amount of coverage as is available for such one hundred percent
      (100%) of such annual premium).

            

    

     

    
      	
               
      

            	
              (c)

            	
              
                This
      Section 6.08 is intended to be for the benefit of, and shall be
      enforceable by, the Indemnified Parties and their heirs and personal
      representatives and shall be binding on each of Parent and the Company and
      its successors and assigns.  In the event either Parent or the
      Company or its successor or assign (i) consolidates with or merges into
      any other person and shall not be the continuing or surviving corporation
      or entity in such consolidation or merger or (ii) transfers all or
      substantially all of its properties and assets to any Person, then, and in
      each case, proper provision shall be made so that the successor and assign
      of Parent or the Company, as the case may be, honor the obligations set
      forth with respect to Parent or the Company, as the case may be, in this
      Section 6.08.

              

            

    

     

    
      
         

      

      
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    Section
6.09         Company
Meeting.

     

    Subject
to the terms of this Agreement, the Company shall cause the Company Meeting to
be duly called and held as soon as practicable after the date of this Agreement
for the purpose of voting on the Arrangement Resolution.  The Company
Meeting shall be held no later than March 16, 2009 unless otherwise agreed by
the Company and Parent, each acting reasonably.  The Company shall
provide notice to Parent of the Company Meeting and allow Parent’s
representatives to attend the Company Meeting.  The Company shall
conduct the Company Meeting in accordance with the rules of the TSX, the OBCA,
the by-laws of the Company and as otherwise required by applicable
Laws.  The Company Board shall (i) include the Recommendation in the
Circular, and (ii) use its commercially reasonable efforts to obtain the
necessary vote by the Company Shareholders in favour of the Arrangement
Resolution.  The Company Board shall not withdraw, amend, modify or
qualify in a manner adverse to Parent the Recommendation (or announce its
intention to do so), except that, prior to the receipt of the Company
Shareholders approval, the Company Board shall be permitted to withdraw the
Recommendation, following three Business Days’ prior notice to Parent, if the
Company has entered into an agreement for a Potential Transaction.

     

    Section
6.10         Purchaser.

     

    Parent
shall cause and shall take all action necessary to cause Purchaser to perform
its obligations under this Agreement and to consummate the Transactions on the
terms and subject to the conditions set forth in this Agreement.

     

    Section
6.11         Resignation of Directors and
Officers.

     

    At or
before the Effective Time, Parent shall cause each Person who is a director and
officer of Parent, other than such Persons set out on Schedule 6.11, to
voluntarily submit his or her written resignation as a director or officer of
Parent, as the case may be, which will be effective at the Effective Time and
Parent shall cause such resignations and election of replacement directors of
Parent to be seriatim, such that the Board of Directors of Parent and officers
of Parent immediately after the Effective Time will consist of the individuals
set out on Schedule 6.11.

     

    ARTICLE
VII

    CONDITIONS

     

    Section
7.01         Condition to the Obligations
of the Company, Parent and the Purchaser

     

    The
obligations of the Company, Parent and the Purchaser to consummate the
Transactions are subject to the satisfaction of all the following
conditions:

     

    
      	
               
      

            	
              (a)

            	
              Interim
      Order.  The Interim Order shall have been obtained in
      form and substance satisfactory to each of the Company and Parent, acting
      reasonably.

            

    

     

    
      	
               
      

            	
              (b)

            	
              Final
      Order.  The Court will have determined that the issuance
      of the Parent Common Stock to the Company Shareholders pursuant to the
      terms of the Arrangement is fair to the Company Shareholders, prior to
      issuing the Final Order and will have granted the Final Order, which Final
      Order shall be in form and substance satisfactory to each of the Company
      and Parent, acting reasonably, and shall not have been set aside or
      modified in a manner unacceptable to such parties on appeal or
      otherwise.

            

    

     

    
      
         

      

      
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              (c)

            	
              Stockholder
      Approvals. This Agreement and the Transactions contemplated hereby
      shall have been approved by the requisite vote of the stockholders of the
      Company and Parent, and the issuance of Parent Common Stock in connection
      with the Arrangement and the other Parent Stockholder Proposals shall have
      been approved by the requisite vote of the Parent
      Stockholders.

            

    

     

    
      	
               
      

            	
              (d)

            	
              Approvals.  All
      other authorizations, consents, orders, declarations or approvals of, or
      filings with, or terminations or expirations of waiting periods imposed
      by, any Governmental Authority which the failure to obtain, make or occur
      would have the effect of making the Arrangement or any of the Transactions
      illegal shall have been given or shall be in
  effect.

            

    

     

    
      	
               
      

            	
              (e)

            	
              Laws. No
      provision of any applicable Law shall prohibit or impose any condition on
      the consummation of the Transactions or limit in any material way Parent’s
      right to control or operate the Purchaser, the Company or any of the
      Company Subsidiaries or any material portion of the
    Business.

            

    

     

    
      	
               
      

            	
              (f)

            	
              Third-Party
      Proceedings. There shall not be pending or threatened any
      proceeding by a third-party to enjoin or otherwise restrict the
      consummation of the Transactions.

            

    

     

    
      	
               
      

            	
              (g)

            	
              Exchange
      Listing. As of the Effective Time, the shares of Parent Common
      Stock issued in connection with the Arrangement shall be quoted and
      approved for listing on the NYSE Alternext
US.

            

    

     

    
      	
               
      

            	
              (h)

            	
              Conversion
      Rights.  At or prior to the
      Parent Stockholders’ Meeting, holders of less than thirty percent (30%) of
      the IPO Shares (as such term is defined in Parent’s Certificate of
      Incorporation) shall have demanded that Parent convert their IPO Shares
      into cash pursuant to the terms of the Parent’s Charter
      Documents.

            

    

     

    
      
         

      

      
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    Section
7.02         Conditions to Obligations of
Parent and the Purchaser.

     

    The
obligation of Parent and the Purchaser to consummate the Transactions is subject
to the satisfaction, or the waiver at Parent’s and the Purchaser’s sole and
absolute discretion, of all the following further conditions:

     

    
      	
               
      

            	
              (a)

            	
              Representations and
      Warranties. The representations and warranties of the Company
      contained in this Agreement shall be true and correct as of the Effective
      Time, with the same effect as though such representations and warranties
      were made on and as of the Effective Time (provided that any
      representation and warranty that addresses matters only as of a certain
      date shall be true and correct as of that certain date), except as
      otherwise specifically permitted by this Agreement and except where the
      failure of any such representation and warranty to be true and correct in
      all material respects would not result in or would not be reasonably
      likely to result in a Company Material Adverse
  Effect.

            

    

     

    
      	
               
      

            	
              (b)

            	
              Performance of
      Obligations. The Company shall have performed and complied with all
      covenants, undertakings, obligations, agreements and conditions to be
      performed or complied with by it at or before the Effective Time pursuant
      to the terms of the Transaction Documents, except where the failure to so
      perform or comply would not result in or would not be reasonably likely to
      result in a Company Material Adverse
Effect.

            

    

     

    
      	
               
      

            	
              (c)

            	
              Company Material
      Adverse Effect.  Between the date hereof and the
      Effective Date, there shall not have occurred a Company Material Adverse
      Effect.

            

    

     

    
      	
               
      

            	
              (d)

            	
              Dissent
      Rights.  Company Shareholders representing in the
      aggregate 10% or more of the issued and outstanding Company Common Stock
      immediately prior to the Effective Date shall not have validly exercised
      Dissent Rights.

            

    

     

    
      	
               
      

            	
              (e)

            	
              Consents.  Each
      of the consents referred to in Section 3.04 shall have been obtained,
      except where the failure to obtain any such consent would not result in or
      would not be reasonably likely to result in a Company Material Adverse
      Effect.

            

    

     

    
      	
               
      

            	
              (f)

            	
              Regulatory
      Filings. All necessary regulatory or governmental approvals and
      consents required to consummate the transactions contemplated hereby
      (other than immaterial government permits) shall have been obtained
      without any term or condition which would materially impair the value of
      the Company. All conditions required to be satisfied prior to the
      Effective Time by the terms of such approvals and consents shall have been
      satisfied, and any and all statutory waiting periods in respect thereof
      shall have expired.

            

    

     

    
      
         

      

      
        - 65
-

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (g)

            	
              Updated
      Schedules. Parent shall have received updated Schedules to this
      Agreement as of a date within three (3) Business Days of the Effective
      Date.  Such updated Schedules shall include the Financial
      Statements and financial statements for any subsequent annual or interim
      period that would be required under
GAAP.

            

    

     

    
      	
               
      

            	
              (h)

            	
              Transaction
      Documents. The Transaction Documents to be executed and delivered
      by the Company shall have been duly executed by the Company and delivered
      to Parent.

            

    

     

    
      	
               
      

            	
              (i)

            	
              Certificate of
      Officer.  Parent shall have received a certificate dated
      the Effective Date and signed by the Chief Executive Officer of the
      Company, certifying that the conditions specified in this Section 7.02
      have been satisfied.

            

    

     

    
      	
               
      

            	
              (j)

            	
              Lender
      Arrangements.  The Company shall have entered into a
      revised arrangement with its senior secured lenders with respect to the
      outstanding credit facilities provided to the Company and the Company
      Subsidiaries by such lenders, including with respect to the warrants
      issued and issuable to such lenders in connection with such facilities,
      that is satisfactory to Parent, acting
  reasonably.

            

    

     

    
      	
               
      

            	
              (k)

            	
              Lock-up
      Agreements.  Each of the persons listed on Schedule
      7.02(k)(A) shall have entered into a lock-up agreement in the form
      attached as Schedule 7.02(k)(B).

            

    

     

    Section
7.03         Conditions to Obligations of
the Company.

     

    The
obligation of the Company to consummate the Transactions is subject to the
satisfaction, or the waiver at the Company’s discretion, of all the following
further conditions:

     

    
      	
               
      

            	
              (a)

            	
              Representations and
      Warranties. The representations and warranties of Parent contained
      in this Agreement shall be true and correct as of the Effective Time, with
      the same effect as though such representations and warranties were made on
      and as of the Effective Time (provided that any representation and
      warranty that addresses matters only as of a certain date shall be true
      and correct as of that certain date), except as otherwise specifically
      permitted by this Agreement and except where the failure of any such
      representation and warranty to be true and correct in all material
      respects would not result in or would not be reasonably likely to result
      in a Parent Material Adverse
Effect.

            

    

     

    
      
         

      

      
        - 66
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              (b)

            	
              Performance of
      Obligations. Each of Parent and the Purchaser shall have performed
      and complied with all covenants, undertakings, obligations, agreements and
      conditions to be performed or complied with by it at or before the
      Effective Time pursuant to the terms of the Transaction Documents, except
      where the failure to so perform or comply would not result in or would not
      be reasonably likely to result in a Parent Material Adverse
      Effect.

            

    

     

    
      	
               
      

            	
              (c)

            	
              Parent Material
      Adverse Effect.  Between the date hereof and the
      Effective Date, there shall not have occurred a Parent Material Adverse
      Effect.

            

    

     

    
      	
               
      

            	
              (d)

            	
              Dissent
      Rights.  Company Shareholders representing in the
      aggregate 10% or more of the issued and outstanding Company Common Stock
      immediately prior to the Effective Date shall not have validly exercised
      Dissent Rights.

            

    

     

    
      	
               
      

            	
              (e)

            	
              Regulatory
      Filings. All necessary regulatory or governmental approvals and
      consents required to consummate the transactions contemplated hereby
      (other than immaterial government permits) shall have been obtained
      without any term or condition which would materially impair the value of
      Parent. All conditions required to be satisfied prior to the Effective
      Time by the terms of such approvals and consents shall have been
      satisfied, and any and all statutory waiting periods in respect thereof
      shall have expired.

            

    

     

    
      	
               
      

            	
              (f)

            	
              Transaction
      Documents. The Transaction Documents to be executed and delivered
      by Parent and/or the Purchaser shall have been duly executed by Parent
      and/or the Purchaser and delivered to the
  Company.

            

    

     

    
      	
               
      

            	
              (g)

            	
              Updated
      Schedules. The Company shall have received updated schedules to
      this Agreement relating to Parent as of a date within three (3) Business
      Days of the Effective Date.

            

    

     

    
      	
               
      

            	
              (h)

            	
              Company RSU Plan and
      Company Warrants. Parent will have adopted the Company RSU Plan and
      the Company Warrants and will have approved and reserved for issuance the
      aggregate  number of shares of Parent Common Stock that may be
      issued after the Effective Time pursuant to the exercise of the Company
      RSUs and Company Warrants, as adopted by
Parent.

            

    

     

    
      
         

      

      
        - 67
-

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (i)

            	
              Board of Directors and
      Officers. The board of directors of Parent and officers of Parent
      shall be constituted as determined pursuant to Section
    6.11.

            

    

     

    
      	
               
      

            	
              (j)

            	
              Trust Account.
      At the Effective Time, Parent shall have in the Trust Account no less than
      an amount equal to U.S.$70.0
million.

            

    

     

    
      	
               
      

            	
              (k)

            	
              Release of Trust
      Funds. Parent will have delivered to the Trustee pursuant to the
      Investment Trust Management Agreement a notice triggering the release of
      funds from the Trust Account to Parent forthwith after completion of the
      Arrangement.

            

    

     

    
      	
               
      

            	
              (l)

            	
              Certificate of
      Officer.
      The Company shall have received a certificate dated the Effective Date and
      signed by the Chief Financial Officer of Parent, certifying that, the
      conditions specified in this Section 7.03 have been
      satisfied.

            

    

     

    
      	
               
      

            	
              (m)

            	
              
                Lender
      Arrangements. The
      Company shall have entered into a revised arrangement with its senior
      secured lenders with respect to the outstanding credit facilities provided
      to the Company and the Company Subsidiaries by such lenders, including
      with respect to the warrants issued and issuable to such lenders in
      connection with such facilities, that is satisfactory to the Company,
      acting reasonably.

              

            

    

     

    ARTICLE
VIII

    TERMINATION,
AMENDMENT AND WAIVER

     

    Section
8.01         Termination by Mutual
Consent.

     

    This
Agreement may be terminated and the Transactions may be abandoned at any time
prior to the Effective Date, whether before or after the approvals at the
Company Meeting or Parent Stockholders Meeting referred to in Section 6.10 or
Section 2.05 respectively, by mutual written consent of the Company and
Parent.

     

    Section
8.02         Termination by Parent or the
Company.

     

    This
Agreement may be terminated and the Transactions may be abandoned at any time
prior to the Effective Date by action of the Board of Directors of either Parent
or the Company if:

    
      
         

      

      
        - 68
-

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (a)

            	
              The
      Transactions shall not have been completed by the Drop Dead Date, whether
      such date is before or after the date of the stockholder approvals
      referred to in Section 7.01(c) (the “Termination
  Date”);

            

    

     

    
      	
               
      

            	
              (b)

            	
              The
      approval of the Company Shareholders required by Section 7.01(c) shall not have
      been obtained at the Company Meeting duly convened therefor or at any
      adjournment or postponement
thereof;

            

    

     

    
      	
               
      

            	
              (c)

            	
              The
      approval of the Parent Stockholders referred to in Section 7.01(c) shall
      not have been obtained at the Parent Stockholder Meeting duly convened
      therefor or at any adjournment or postponement thereof;
  or

            

    

     

    
      	
               
      

            	
              (d)

            	
              Any
      Governmental Authority of competent jurisdiction shall have issued a
      non-appealable final Order permanently restraining, enjoining or otherwise
      prohibiting the consummation of the
  Transactions;

            

    

     

    provided, however, that the
right to terminate this Agreement pursuant to paragraph (a), (b) or (c) above
shall not be available to any party that has breached or failed to fulfill any
of its obligations under this Agreement in any manner that shall have caused the
occurrence of the failure of the Transactions to occur before the Termination
Date or the failure to obtain the approval of the Company Shareholders or the
Parent Stockholders.

     

    Section
8.03         Termination for Breach of
Representations and Warranties.

     

    This
Agreement may be terminated and the Transactions may be abandoned at any time
prior to the Effective Date:

     

    
      	
               
      

            	
              (a)

            	
              By
      the Company, subject to its having complied and being in compliance with
      all of its obligations under this Agreement, in the event of a material
      breach by a Purchaser Party of any representation, warranty, covenant or
      agreement made by it contained in this Agreement or if any representation
      or warranty made by a Purchaser Party shall have become untrue, in either
      case such that the conditions set forth in Section 7.03(a) or (b) would
      not be satisfied as of the time of such breach or as of the time such
      representation or warranty shall have become untrue, and if such breach or
      inaccuracy shall not be cured within twenty (20) Business Days after
      delivery of written notice thereof by the Company to
    Parent;

            

    

     

    
      
         

      

      
        - 69
-

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (b)

            	
              By
      a Purchaser Party, subject to its having complied and being in compliance
      with all of its obligations under this Agreement, in the event of a
      material breach by the Company of any representation, warranty, covenant
      or agreement made by it contained in this Agreement or if any
      representation or warranty made by the Company shall have become untrue,
      in either case such that the conditions set forth in Section 7.02(a) or
      (b) would not be satisfied as of the time of such breach or as of the time
      such representation or warranty shall have become untrue, and if such
      breach or inaccuracy shall not be cured within twenty (20) Business Days
      after delivery of written notice thereof by the Purchaser Party to the
      Company;

            

    

     

    
      	
               
      

            	
              (c)

            	
              By
      the Company, if any condition specified to be for the benefit of the
      Company under Section 7.01 or 7.03, other than a condition set out in
      Section 7.03(a) or (b), shall not have been satisfied on or prior to the
      date on which it is required to be satisfied and the provisions of Section
      8.03(a) do not otherwise apply thereto;
or

            

    

     

    
      	
               
      

            	
              (d)

            	
              By
      Parent, if any condition specified to be for the benefit of Parent under
      Section 7.01 or 7.02, other than a condition set out in Section 7.02(a) or
      (b), shall not have been satisfied on or prior to the date on which it is
      required to be satisfied and the provisions of Section 8.03(b) do not
      otherwise apply thereto.

            

    

     

    Section
8.04         Termination by Company
in Connection with Potential Transactionor Superior Proposal

     

    Subject
to the requirements of Section 6.01(g) and 6.01(h), this Agreement may be
terminated and the Transactions may be abandoned by the Company: (a) at any time
prior to the date the required approval of the Arrangement by
the  Company Shareholders and by Parent Stockholders is obtained, in
connection with the completion of a Potential Transaction with a Person not set
out on Schedule 6.01(b) as contemplated by Section 6.01(b); (ii) at any time
following the date the required approval of the Arrangement by
the  Company Shareholders and by Parent Stockholders is obtained and
prior to the Effective Date, in connection with the completion of a Potential
Transaction with a Person set out on Schedule 6.01(b) or with a Person not
listed on Schedule 6.01(b) that makes an unsolicited bid for a majority of the
Company’s capital stock on or prior to April 17, 2009 with the
purpose of taking control of the Company as contemplated by Section
6.01(g)(c)(i)and (ii), or (iii) in connection with the entering into of a
written binding agreement relating to a Superior Proposal as contemplated by
Section 6.02(a).

     

    
      
         

      

      
        - 70
-

        
          

        

      

      
         

      

    

    
      Section
8.05         Termination by Parent in
Certain Circumstances

    

     

    This
Agreement may be terminated and the Transactions may be abandoned at any time
prior to the Effective Date by the Parent, upon written notice to the Company,
on the earlier of (i) the date on which the Parent determines, acting reasonably
and in good faith,  that the transactions contemplated by this
Agreement cannot or are unlikely to be consummated because the conditions to the
Parent’s and the Purchaser’s obligation to close set forth in Sections 7.01
and 7.02 have not or are unlikely to be met, unless such failure of consummation
shall be due to the failure of the Parent or the Purchaser to perform or observe
in all material respects the covenants and agreements hereof to be performed or
observed by the Parent or the Purchaser.

     

    Section
8.06         Effect of Termination and
Abandonment.

     

    In the
event of the termination of this Agreement by Parent or Company as provided in
this Article VIII, this Agreement shall forthwith become void and there shall be
no liability hereunder on the part of the Company, Parent or the Purchaser or
their respective officers or directors to perform any of their obligations
hereunder. Notwithstanding the foregoing, no termination of this agreement shall
affect the rights or obligations of the parties pursuant to Section
6.01(g).

     

    ARTICLE
IX

    GENERAL
PROVISIONS

     

    Section
9.01         Waiver.

     

    As
contemplated in Parent’s prospectus dated April 2007 (the “Prospectus”), Parent
has established the Trust Account, for the benefit of the “public stockholders”
(as defined in the Prospectus) and that Parent may disburse monies from the
Trust Account only (i) to the public stockholders in the event of the conversion
of their shares or the liquidation of Parent (ii) to Parent (or the company
resulting from the merger of Parent and such company) (a) concurrently or after
it consummates an initial business combination (as described in the Prospectus),
and (b) prior to the consummation of an initial business combination, to the
extent of U.S.$1,600,000 in interest earned on the Trust Account (the “Released
Interest”), net of taxes payable, which shall be released upon demand of Parent;
and (iii) to the underwriters of Parent’s initial public offering, concurrently
or after consummation of an initial business combination, but only after
adjustment for amounts owing to public stockholders for which conversion rights
have been exercised.  The Company hereby agrees that it does not have
any right, title, interest or claim of any kind in or to any monies in the Trust
Account (“Claim”) and hereby waives any Claim the Company may have in the future
as a result of, or arising out of, this Agreement or any other negotiations,
contracts or agreements between Parent and the Company and will not seek
recourse against the Trust Account for any reason whatsoever.

     

    Section
9.02         Survival of Representations
and Warranties.

     

    The
representations and warranties of each of the Company, Parent and the Purchaser
contained herein shall not survive the completion of the Transactions and shall
expire and be terminated on the earlier of the termination of this Agreement in
accordance with its terms and the Effective Time.

    
      
         

      

      
        - 71
-

        
          

        

      

      
         

      

    

     

    Section
9.03         Amendments, Modification and
Waiver.

     

    
      	
               
      

            	
              (a)

            	
              Except
      as may otherwise be provided herein, any provision of this Agreement may
      be amended, modified or waived by the parties hereto, by action taken by
      or authorized by their respective Boards of Directors, prior to the
      Effective Date if, and only if, such amendment or waiver is in writing and
      signed, in the case of an amendment, by the Company and Parent or, in the
      case of a waiver, by the party against whom the waiver is to be effective;
      provided further, however, that, after the approval of this Agreement by
      the Company Shareholders, no such amendment shall be made except as
      allowed under applicable Law.

            

    

     

    
      	
               
      

            	
              (b)

            	
              No
      failure or delay by any party in exercising any right, power or privilege
      hereunder shall operate as a waiver thereof nor shall any single or
      partial exercise thereof preclude any other or further exercise thereof or
      the exercise of any other right, power or privilege.  The rights
      and remedies herein provided shall be cumulative and not exclusive of any
      rights or remedies provided by law.

            

    

     

    Section
9.04         Notices.

     

    All
notices, requests, demands and other communications to any party hereunder shall
be in writing and shall be given to such party at its address or telecopier
number set forth below, or such other address or telecopier number as such party
may hereinafter specify by notice to each other party hereto:

     

    If prior
to the Effective Time

     

    if to
Parent and the Purchaser, to:

     

    Tailwind
Financial Inc.

    Brookfield
Place

    181 Bay
Street, Suite 2040

    Toronto,
Canada M5J 2T3

     

    Attention:
Andrew McKay, Chief Executive Officer

    Telecopy:  (416)
602-2423

     

    with a
copy (which shall not constitute notice) to:

     

    Loeb
& Loeb LLP

    345 Park
Avenue

    New York,
New York 10154

     

    Attention:  Stan
Johnson

    Telecopy:  (212)
407-4990

    
      
         

      

      
        - 72
-

        
          

        

      

      
         

      

    

     

    If
subsequent to the Effective Time

     

    c/o
Allen-Vanguard Corporation

    2400 St.
Laurent Blvd.

    Ottawa,
Ontario

    K1G
6C4

     

    Attention:
Elisabeth Preston, Chief Legal Officer

    Telecopy:
(613) 747-7942

     

    with a
copy (which shall not constitute notice) to:

     

    Lang
Michener LLP

    Brookfield
Place, Suite 2500

    181 Bay
Street

    Toronto,
Canada M5J 2T7

     

    Attention:
Carl De Vuono

     

    Telecopy:
(416) 304-3755

    if to the
Company:

     

    Allen-Vanguard
Corporation

    2400 St.
Laurent Blvd.

    Ottawa,
Ontario

    K1G
6C4

     

    Attention:
Elisabeth Preston, Chief Legal Officer

    Telecopy:
(613) 747-7942

     

    with a
copy (which shall not constitute notice) to:

     

    Lang
Michener LLP

    Brookfield
Place, Suite 2500

    181 Bay
Street

    Toronto,
Canada M5J 2T7

     

    Attention:
Carl De Vuono

    Telecopy:
(416) 304-3755

     

    Each such
notice, request or other communication shall be effective (i) if given by
telecopy, when such telecopy is transmitted to the telecopy number specified
herein and the appropriate answer back is received or, (ii) if given by
certified or registered mail, seventy-two (72) hours after such communication is
deposited in the mails with first class postage prepaid, properly addressed or,
(iii) if given by any other means, when delivered at the address specified
herein.

    
      
         

      

      
        - 73
-

        
          

        

      

      
         

      

    

     

    Section
9.05         Expenses

     

    Each of
Parent and the Company will pay their own expenses relating to the
Transactions.

     

    Section
9.06         Severability.

     

    If any
term or other provision of this Agreement is invalid, illegal or incapable of
being enforced by any rule of Law, or public policy, all other conditions and
provisions of this Agreement shall nevertheless remain in full force and effect
so long as the economic or legal substance of the Transactions is not affected
in any manner materially adverse to any party.  Upon such
determination that any term or other provision is invalid, illegal or incapable
of being enforced, the parties hereto shall negotiate in good faith to modify
this Agreement so as to effect the original intent of the parties as closely as
possible in a mutually acceptable manner in order that the Transactions be
consummated as originally contemplated to the fullest extent
possible.

     

    Section
9.07         Entire Agreement;
Assignment.

     

    This
Agreement, together with the Annexes, Exhibits and Schedules hereto and the
Confidentiality Agreement, constitute the entire agreement among the parties
with respect to the subject matter hereof and supersede all prior agreements and
undertakings, both written and oral, among the parties, or any of them, with
respect to the subject matter hereof.  This Agreement shall not be
assigned (whether pursuant to a merger, by operation of law or otherwise)
without the prior written consent of each party hereto.

     

    Section
9.08         Parties in
Interest.

     

    This
Agreement shall be binding upon and inure solely to the benefit of each party
hereto, and nothing in this Agreement, express or implied, is intended to or
shall confer upon any other person any right, benefit or remedy of any nature
whatsoever under or by reason of this Agreement.

     

    Section
9.09         Interpretation.

     

    References
herein to the “knowledge of the Company” shall mean the actual knowledge of any
one of the Chief Executive Officer, Chief Financial Officer of the Company,
Chief Legal Officer, Vice President of Sales and Vice President of
ES.  References herein to the “knowledge of Parent” shall mean the
actual knowledge of the “officers” of Parent (as such term is defined in Rule
3b-2 promulgated under the Exchange Act).  Whenever the words
“include”, “includes” or “including” are used in this Agreement they shall be
deemed to be followed by the words “without limitation”.  The phrase
“made available” when used in this Agreement shall mean that the information
referred to has been made available if requested by the party to whom such
information is to be made available.  References to “hereof” shall
mean this Agreement and references to the “date hereof” shall mean the date of
this Agreement.  The parties acknowledge that the parties and their
counsel have reviewed and revised this Agreement and that the normal rule of
construction to the effect that any ambiguities are to be resolved against the
drafting party shall not be employed in the interpretation of this Agreement or
any other agreement or document given pursuant to this
Agreement.

    
      
         

      

      
        - 74
-

        
          

        

      

      
         

      

    

     

    Section
9.10         Specific
Performance.

     

    The
parties hereto agree that irreparable damage would occur in the event any
provision of this Agreement were not performed in accordance with the terms
hereof and that the parties shall be entitled to specific performance of the
terms hereof, in addition to any other remedy at law or in equity.

     

    Section
9.11         Governing
Law.

     

    This
Agreement shall be governed by and construed in accordance with the laws of the
Province of Ontario and the federal laws of Canada applicable therein regardless
of the laws that might otherwise govern under applicable principles of conflicts
of laws thereof, except to the extent mandatorily governed by the law of another
jurisdiction.  Each of the parties hereto (a) irrevocably consents to
the exclusive jurisdiction and venue of the Courts of the Province of Ontario in
connection with any matter based upon or arising out of this Agreement or the
matters contemplated herein, and (b) waives and covenants not to assert or plead
any objection which they might otherwise have to such jurisdiction, venue and
such process.

     

    Section
9.12         Waiver of Jury
Trial.

     

    Each of
the parties hereto hereby waives to the fullest extent permitted by applicable
Law any right it may have to a trial by jury with respect to any litigation
directly or indirectly arising out of, under or in connection with the
Transaction Documents or the Transactions.  Each of the parties hereto
(a) certifies that no representative, agent or attorney of any other party has
represented, expressly or otherwise, that such other party would not, in the
event of litigation, seek to enforce that foregoing waiver and (b) acknowledges
that it and the other parties hereto have been induced to enter into the
Transaction Documents and the Transactions, as applicable, by, among other
things, the mutual waivers and certifications in this Section 9.12.

     

    Section
9.13         Headings.

     

    The
descriptive headings contained in this Agreement are included for convenience of
reference only and shall not affect in any way the meaning or interpretation of
this Agreement.

     

    Section
9.14         Ambiguities.

     

    The
parties acknowledge that each party and its counsel has materially participated
in the drafting of this Agreement and consequently the rule of contract
interpretation that, and ambiguities if any in, the writing be construed against
the drafter, shall not apply.

    
      
         

      

      
        - 75
-

        
          

        

      

      
         

      

    

     

    Section
9.15         Counterparts.

     

    This
Agreement may be executed and delivered (including by facsimile or other
electronic transmission) in one or more counterparts, and by the different
parties hereto in separate counterparts, each of which when executed shall be
deemed to be an original but all of which taken together shall constitute one
and the same agreement.

     

    Section
9.16         Adjustment.

     

    In the
event of any subdivision, consolidation, reclassification or other change to the
Parent Common Stock or the Company Common Stock prior to the Effective Date, all
appropriate adjustments shall be made, mutatis mutandis, in respect of the
consideration payable in connection with the Arrangement.

     

    Section
9.17         Currency.

     

    For
greater certainty, all dollar amounts expressed in this Agreement (unless
otherwise expressly provided for herein) or in the Company Schedules (unless
otherwise expressly provided for therein) are in Canadian dollars.

     

    SIGNATURE
PAGE FOLLOWS

     

    IN
WITNESS WHEREOF, Parent, the Purchaser and the Company have caused this
Agreement to be executed as of the date first written above by their respective
officers thereunto duly authorized.

    

    
      
        	
                TAILWIND
      FINANCIAL INC.

                 

              
	
                By:

              	 
      
	 
      	
                Name:

              
	 
      	
                Title:

              
	 
      
	
                
                  AV
      ACQUISITION CORP.

                   

                   

                

              
	
                By:

              	 
      
	 
      	
                Name:

              
	 
      	
                Title:

              
	 
      
	
                ALLEN
      VANGUARD CORPORATION

                 

              
	
                By:

              	 
      
	 
      	
                Name:

              
	 
      	
                Title:

              

      

    

     

     

    -
76 -

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