Document:

STOCK
      PURCHASE AGREEMENT

    

      This
        STOCK PURCHASE AGREEMENT (the “Agreement”), dated as of the 27th
        day of
        December, 2007, is entered by and among Triumph Small Cap Fund, Inc.
        (the
        “Purchaser”),
        SENK
        VII, LLC, an Illinois limited liability company
        (the
“Seller”), each
        other seller listed on Exhibit
        A
        attached
        hereto (individually, a “Seller” and, collectively, the “Sellers”), and
        MAP
        VII
        Acquisition, Inc.,
        a
        Delaware corporation (the “Issuer”).

    WITNESSETH
      THAT:

    

    WHEREAS,
      Seller
      owns
      a
      total
      of Two Million Five Hundred Thousand (2,500,000) shares of common stock of
      the
Issuer,
      par
      value $0.0001 (the “Shares”);
      and

    

    WHEREAS,
      Purchaser
      desires to purchase from Seller
      and
      Seller desires to sell to
      the
      Purchaser
      the
      Shares
      on
      the
      terms
      and conditions set forth herein.

    

    NOW,
      THEREFORE, in
      consideration of the foregoing and mutual covenants set forth below, the parties
      hereto agree as follows:

    

    1.    PURCHASE
      AND SALE OF SHARES

    

    1.1 Purchase
      of Shares.
      On the
      date hereof and subject to the terms and conditions of this Agreement, the
      Seller shall issue, sell, assign, transfer, and deliver to the Purchaser and
      the
      Purchaser shall purchase, for the purchase price set forth in Section 1.3
      hereof, the Shares at the closing provided for in Section 1.4 hereof (the
“Closing”), free and clear of all liens, charges, or encumbrances of whatsoever
      nature. 

    

    1.2 Transfer
      of Title to the Shares.
      The
      sale, assignment, conveyance, transfer, and delivery by Seller of the Shares
      shall be made by delivering to the Purchaser duly endorsed stock certificate(s)
      representing Two Million Five Hundred Thousand (2,500,000) restricted shares
      of
      common stock of the Issuer
      (“Stock
      Certificate”), against payment of the Purchase Price, as defined
      herein. 

    

    1.3 Purchase
      Price.
      On the
      Closing Date (as defined below), the Purchaser shall pay to Sellers the
      aggregate purchase price of Thirty Thousand Dollars ($30,000) in cash (the
      “Purchase Price”) for the Shares. On or before the Closing Date the Issuer shall
      pay and discharge all outstanding liabilities, including the SENK Loan, as
      described in Section 3.1(j). The Purchase Price shall be paid
      in
      immediately available funds by wire transfer to the bank account of
      SENK VII LLC, duly authorized representative for receipt of the Purchase
      Price on behalf of the Sellers, each of whom is entitled to pro
      rata
      in proportion to the number of shares owned by each of the Sellers, as set
      forth
      on Schedule
      A.,
      at the
      following bank:

     

    
      	Bank: 	
              Bank
                Financial

              1368
                Shermer Road

              Northbrook,
                IL 60062

              Phone
                number: 847-279-9271

            
	 	 
	Account Name:	SENK VII, LLC
	Account Number:	7130005156
	Routing Number:	271972899

    

     

    $14,263
      of the Purchase Price shall be deemed a capital contribution to retire the
      SENK
      Loan and $15,737 of the Purchase Price shall be deemed payment for the Shares.
      It is the parties intent that the Issuer shall, on the Closing Date (as defined
      below), have no liabilities and no assets. Any cash remaining in the Issuer
      shall thereafter become the property of the Purchaser.

    

    1.4 Closing. 
      The
      Closing of the transactions provided for in this Agreement shall take
      place on or before December 27, 2007
      (the
“Closing Date”)
      at the
      offices of Purchaser’s Counsel, Sichenzia Ross Friedman Ference LLP, 61
      Broadway, 32 Floor, New York, New York 10006, or by the exchange of documents
      and instruments by mail, courier, telecopy and wire transfer to the extent
      mutually acceptable to the parties hereto.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    2.    RELATED
      TRANSACTIONS

    

    2.1 Finders. The
      Purchaser and Sellers represents to each other that there are no finders with
      respect to the transaction contemplated herein. 

    

    3.    REPRESENTATIONS
      AND WARRANTIES BY THE SELLER, PURCHASER
      AND
      ISSUER

    

    3.1 The
      Seller hereby represents and warrants to the Purchaser as follows:

    

    (a) The
      Issuer
      is a
      corporation duly organized, validly existing, and in good standing under the
      laws of the state of Delaware, and is qualified in no other state.

    

    (b) This
      Agreement and any other agreement executed by Seller in connection herewith
      have
      been duly executed and delivered by it and constitute the valid, binding and
      enforceable obligation of Seller, subject to the applicable bankruptcy,
      insolvency and similar laws affecting creditors’ rights generally and rights of
      stockholders. 

    

    (c) The
      authorized capital stock of the Issuer
      consists
      of Eighty Five Million (85,000,000) shares of capital stock, divided into two
      classes: (i) Seventy Five Million (75,000,000) designated as common stock,
      par
      value $0.0001 (the “Common Stock”), of which Two Million Five Hundred Thousand
      (2,500,000) shares of Common Stock are validly issued and outstanding, fully
      paid and non-assessable; and (ii) Ten Million (10,000,000) shares designated
      as
      preferred stock at $0.0001 par value (the “Preferred Stock”), of which none are
      issued and outstanding. The Shares have been validly issued, are fully paid
      and
      non-assessable, and are owned beneficially and of record by Seller free and
      clear of all liens, pledges, encumbrances, security agreements, equities,
      options, claims, charges and restrictions of any nature whatsoever, except
      any
      restrictions under applicable federal and state securities laws, and Seller
      has
      not previously entered into any agreement or commitment for the sale of all
      or
      part of the Shares or otherwise conveyed or encumbered Seller’s interest (voting
      or otherwise) with respect to the Shares. The Seller has the unqualified right
      to sell, assign, and deliver the Shares, and, upon consummation of the
      transactions contemplated by this Agreement, the Purchaser will acquire good
      and
      valid title to the Shares, free and clear of all liens, claims, options,
      charges, and encumbrances of whatsoever nature. 

      

    (d) Seller
      is
      not a party to or bound by any unexpired, undischarged or unsatisfied written
      or
      oral contract, agreement, indenture, mortgage, debenture, note or other
      instrument under the terms of which performance by Purchaser according to the
      terms of this Agreement will be a default or an event of acceleration, or
      grounds for termination, or whereby timely performance by Purchaser according
      to
      the terms of this Agreement may be prohibited, prevented or delayed.

    

    (e) Seller
      has full power and authority to sell and transfer the Shares to Purchaser
      without obtaining the waiver, consent, order or approval of (i) any state or
      federal governmental authority or (ii) any third party or other person
      including, but not limited to, other stockholders of the Issuer.
      

     

    (f) The
      Issuer
      has the
      corporate power,
      authority
      and
      capacity to
      carry
      on its business as presently conducted, except where the failure to do so would
      not result in a material adverse effect upon the Issuer.

    

    (g) The
      Seller has heretofore delivered to the Purchaser true and complete copies of
      the
      Issuer’s Certificate of Incorporation, as amended and By-laws, each as currently
      in effect.

    

    (h) Neither
      the execution and delivery of this Agreement nor the consummation of the
      transactions contemplated hereby will constitute a violation or default under
      any term or provision of the Certificate of Incorporation or By-laws of the
      Issuer,
      or of
      any contract, commitment, indenture, other agreement or restriction of any
      kind
      or character to which the Issuer
      or the
      Seller is a party to or by which the Issuer
      or the
      Seller is bound. 

    

    (i) The
      Certificates representing the Shares delivered pursuant to this Agreement are
      subject to certain trading restrictions imposed by the Securities Act of 1933,
      as amended (“Securities Act”) and applicable state securities or “blue sky”
laws.

    

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    (j) The
      Issuer has no outstanding liabilities or obligations to any party except as
      reflected on the Issuer’s Form 10-QSB for the quarter ended September 30, 2007,
      which liabilities include one or more loan(s) to SENK VII LLC in the aggregate
      amount of $14,263 (the “SENK Loan”), other than charges since such date occurred
      in the ordinary course of business, all of which will be discharged prior to
      or
      at the Closing so that, at the Closing, the Issuer will have no direct,
      contingent or other obligations of any kind or any commitment or contractual
      obligations of any kind and description.
      The
      Purchase Price shall be used to discharge the SENK Loan. 

     

    3.2 The
      Issuer hereby represents and warrants to the
      Purchaser as
      follows:

     

    (a) The
      Issuer is a corporation duly organized, validly existing and in good standing
      under the laws of the State of Delaware. The Issuer has the corporate power
      to
      own its properties and to carry on its business as now being conducted and
      is
      duly qualified to do business and is in good standing in each jurisdiction
      in
      which the failure to be so qualified and in good standing would have a material
      adverse effect on the Issuer. The Issuer is not in violation of any of the
      provisions of its certificate of incorporation or by-laws. No consent, approval
      or agreement of any individual or entity is required to be obtained by the
      Issuer in connection with the execution and performance by the Issuer of this
      Agreement or the execution and performance by the Issuer of any agreements,
      instruments or other obligations entered into in connection with this Agreement.
      The Issuer has no subsidiary, and it does not have any equity investment or
      other interest, direct or indirect, in, or any outstanding loans, advances
      or
      guarantees to or on behalf of, any domestic or foreign individual or entity
      as
      of the Closing Date.

     

    (b)
       To
      the
      best of Issuer’s knowledge, the authorized capital stock of the Issuer consists
      of 85,000,000 shares of common stock, 2,500,000 of which are validly issued
      and
      outstanding, fully paid and non-assessable as set forth in the Issuer’s 10-QSB
      for the quarter ended September 30, 2007. 

     

    (c)
       Other
      than this Agreement, the
      Issuer
      is not a party to any agreement or understanding pursuant to which any
      securities of any class of capital stock are to be issued or created or
      transferred. The Issuer has not acquired any shares of Common Stock, and has
      no
      formal or informal agreements or understandings pursuant to which it can or
      will
      acquire any shares of Issuer Common Stock. The Issuer nor any officer, director
      or 5% stockholder of the Issuer has any agreements, plans, understandings or
      proposals, whether formal or informal or whether oral or in writing, pursuant
      to
      which it granted or may have issued or granted any individual or entity any
      convertible security or any interest in the Issuer or the Issuer’s earnings or
      profits, however defined. As used in this Agreement, the term “Convertible
      Securities” shall mean any options, rights, warrants, convertible debt, equity
      securities or other instrument or agreement upon the exercise or conversion
      of
      which or upon the exchange of which or pursuant to the terms of which additional
      shares of any class of capital stock of the Issuer may be issued. 

     

    (d)
       There
      is
      no private or governmental action, suit, proceeding, claim, arbitration or
      investigation pending before any agency, court or tribunal, foreign or domestic,
      or, to the Issuer’s best knowledge, threatened against the Issuer or any of its
      properties or any of its officers or directors (in their capacities as such).
      There is no judgment, decree or order against the Issuer that could prevent,
      enjoin, alter or delay any of the transactions contemplated by this Agreement.
      The term “Best Knowledge” of
      the
      Issuer shall mean and include (i) actual knowledge and (ii) that knowledge
      which
      a prudent businessperson would reasonably have obtained in the management of
      such Person’s business affairs after making due inquiry and exercising the due
      diligence which a prudent businessperson should have made or exercised, as
      applicable, with respect thereto. Actual or imputed knowledge of any director
      or
      officer or Seller shall be deemed to be knowledge of the Issuer.

     

    (e)
       There
      are
      no material claims, actions, suits, proceedings, inquiries, labor disputes
      or
      investigations (whether or not purportedly on behalf of the Issuer) pending
      or,
      to the Issuer’s Best Knowledge, threatened against the Issuer or any of its
      assets, at law or in equity or by or before any governmental entity or in
      arbitration or mediation. No bankruptcy, receivership or debt or relief
      proceedings are pending or, to the best of the Issuer’s knowledge, threatened
      against the Issuer.

     

    (f)
       The
      Issuer
      has complied with, is not in violation of, and has not received any notices
      of
      violation with respect to, any federal, state, local or foreign laws, judgment,
      decree, injunction or order, applicable to it, the conduct of its business,
      or
      the ownership or operation of its business. References in this Agreement to
      “Laws” shall refer to any laws, rules or regulations of any federal, state or
      local government or any governmental or quasi-governmental agency, bureau,
      commission, instrumentality or judicial body (including, without limitation,
      any
      federal or state securities law, regulation, rule or administrative
      order).

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    (g) The
      Issuer has properly filed all tax returns (if any) required to be filed and
      has
      paid all taxes shown thereon to be due. To the Best Knowledge of the Issuer,
      all
      tax returns previously filed, if at all, are true and correct in all material
      respects. 

     

    (h) The
      Issuer has no outstanding liabilities or obligations to any party except as
      reflected on the Issuer’s Form 10-QSB for the quarter ended September 30, 2007,
      other than charges since such date occurred in the ordinary course of business,
      all of which will be discharged prior to or at the Closing so that, at the
      Closing, the Issuer will have no direct, contingent or other obligations of
      any
      kind or any commitment or contractual obligations of any kind and description.
      

     

    (i) All
      of
      the business and financial transactions of the Issuer have been fully and
      properly reflected in the books and records of the Issuer in all material
      respects and in accordance with generally accepted accounting principles
      consistently applied.

     

    (j) The
      Issuer is current with its reporting obligations under the Securities Exchange
      Act of 1934, as amended (the “Exchange Act”). None of the Issuer’s filings made
      pursuant to the Exchange Act (collectively, the “Issuer SEC Documents”) contain
      any misstatements of material fact or omit to state a material fact necessary
      to
      make the statements made therein not misleading. The Issuer SEC Documents,
      as of
      their respective dates, complied in all material respects with the requirements
      of the Exchange Act, and the rules and regulations of the Commission thereunder,
      and are available on the Commission’s EDGAR system. The financial statements
      included in the Issuer SEC Documents fairly present and reflect in all material
      respects, in accordance with generally accepted accounting principles,
      consistently applied, the financial condition of the Issuer on the balance
      sheet
      dates and the results of its operations, cash flows and changes in stockholders’
equity for the periods then ended in accordance with generally accepted
      accounting principles, consistently applied, except as may be otherwise
      specified in such financial statements or the notes thereto. The accountants
      who
      audited the Issuer’s financial statements are independent, within the meaning of
      the Securities Act and are a member of the PCAOB. There has not occurred any
      material adverse change, or any development involving a prospective material
      adverse change, in the condition, financial or otherwise, or in the earnings,
      business or operations of the Issuer, from that set forth in the Issuer’s
      Quarterly Report on Form 10-QSB for the quarter ended September 30, 2007.

     

    (k) The
      execution and delivery of this Agreement by the Issuer and the consummation
      of
      the transactions contemplated by this Agreement will not result in any material
      violation of the Issuer’s certificate of incorporation or by-laws.

     

    (l) All
      representations, covenants and warranties of the Issuer and Sellers contained
      in
      this Agreement shall be true and correct on and as of the Closing date with
      the
      same effect as though the same had been made on and as of such
      date.

     

    (m) The
      Issuer has the corporate power, authority and capacity to carry on its business
      as presently conducted.

     

    3.3 Each
      Purchaser, individually and jointly, represents and warrants to Sellers and
      Issuer as follows:

    

    (a) Purchaser
      acknowledges that the Shares have not been registered with the United States
      Securities and Exchange Commission or any state or foreign securities agencies.
      

    

    (b) Purchaser
      has the requisite competence and authority to execute and deliver this Agreement
      and any other agreements and undertakings referenced herein, to perform its
      obligations hereunder and to consummate the transactions contemplated hereby.
      This Agreement and any other agreements executed by Purchaser in connection
      herewith have been duly executed and delivered by it and constitute the valid,
      binding and enforceable obligation of Purchaser, subject to applicable
      bankruptcy, insolvency and similar laws affecting creditors’ rights generally
      and the rights of stockholders. 

    

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    (c) Purchaser
      is not an underwriter and is acquiring the Seller’s Shares for Purchaser’s own
      account for investment only and not with a view towards any public distribution
      thereof, and Purchaser shall not offer to sell or otherwise dispose of, or
      sell
      otherwise dispose of, the Shares so acquired by it in violation of the Act,
      the
      state securities laws and any other applicable laws. 

    

    (d) To
      the
      extent that any federal, and/or state securities laws shall require, the
      Purchaser hereby agrees that any Shares acquired pursuant to this Agreement
      shall be without preference as to assets.

    

    (e) Each
      of
      the
      Purchaser hereby represents that it is purchasing the Shares for its own
      account, with the intention of holding the Shares, with no present intention
      of
      dividing or allowing others to participate in this investment or of reselling
      or
      otherwise participating, directly or indirectly, in a distribution of the
      Shares, and shall not make any sale, transfer, or pledge thereof without
      registration under the Securities Act and any applicable securities laws of
      any
      state unless an exemption from registration is available under those laws.
      The
      Shares delivered to the Purchaser shall bear a restrictive legend indicating
      that they have not been registered under the Securities
      Act of 1933 and are “restricted securities” as that term is defined in Rule 144
      under the Act.

    

    (f) The
      Purchaser represents
      that it has adequate means of providing for its current needs and has no need
      for liquidity in this investment in the Shares. The
      Purchaser represents
      that it is an “accredited investor” as defined in Rule 501(a) of Regulation D
      promulgated under the Securities Act. The
      Purchaser has
      no
      reason to anticipate any material change in its financial condition for the
      foreseeable future. The
      Purchaser is
      financially able to bear the economic risk of this investment, including the
      ability to hold the Shares indefinitely or to afford a complete loss of its
      investment in the Shares. 

    

    (g) Neither
      the Issuer
      nor the
      Seller is under an obligation to register or seek an exemption under any
      federal, state or foreign securities acts for any stock of the Issuer
      or to
      cause or permit such stock to be transferred in the absence of any registration
      or exemption and that the Purchaser herein must hold such stock indefinitely
      unless such stock is subsequently registered under any federal and/or state
      securities acts or an exemption from registration is available.

    

    (h) The
      Purchaser has had a full and fair opportunity to make inquiries ask questions
      of
      the Issuer
      and the
      Seller and receive additional information from the Issuer
      and the
      Seller to the extent that the Issuer
      and the
      Seller possessed such information or could acquire it without unreasonable
      effort or expense and the Purchaser conduct its own independent due diligence.
      Further, the Purchaser has been given or has had access to: (1) all material
      books and records of the Issuer;
      (2) all
      material contracts and documents relating to the Issuer
      and this
      proposed transaction; and (3) an opportunity to question the Seller and the
      appropriate executive officers of the Issuer.

    

    4.    INDEMNIFICATION 

    

    4.1 Indemnification.
      

    

    (a) The
      Seller agrees to indemnify the Purchaser, and hold it harmless from and in
      respect of any (i) assessment, loss, damage, liability, cost and expense
      (including, without limitation, interest, penalties, and reasonable attorneys’
fees) in excess of $1,000.00 in the aggregate, imposed upon or incurred by
      the
      Purchaser resulting from a breach of this Agreement or the covenants or
      conditions made by Issuer and or the Seller; (ii) inaccuracy in any of the
      representations and warranties made by Issuer and/or the Seller herein in this
      Agreement; or (iii) any and all liabilities arising out of or in connection
      with: (A) any of the assets of Issuer or any Subsidiary prior to the Closing;
      or
      (B) the operations of Issuer prior to the Closing.  Assertion by the
      Purchaser to its right to indemnification under this Section 4.1(a) shall not
      preclude assertion by the Purchaser of any other rights or the seeking of any
      other remedies against the Seller. 

    

    (b) The
      Purchaser agrees to indemnify the Sellers, and hold it harmless from and in
      respect of any assessment, loss, damage, liability, cost and expense (including,
      without limitation, interest, penalties, and reasonable attorneys’ fees) in
      excess of $1,000.00 in the aggregate, imposed upon or incurred by the Purchaser
      resulting from a breach of this Agreement. Assertion by the Sellers to their
      right to indemnification under this Section 4.1(b) shall not preclude assertion
      by the Sellers of any other rights or the seeking of any other remedies against
      the Purchaser.

    

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    5.    MISCELLANEOUS

    

    5.1  Expenses.
      All
      fees and expenses incurred by the Purchaser and Sellers in connection with
      the
      transactions contemplated by this Agreement shall be borne by the respective
      parties hereto.

    

    5.2 Debt. Any
      debt
      or
      loans due to any third parties shall be paid out prior to or at the Closing
      so
      that, at the Closing, the Issuer will have no direct, contingent or other
      obligations of any kind or any commitment or contractual obligations of any
      kind
      and description.

    

    5.3 Parties
      in Interest.
      All the
      terms and provisions of this Agreement shall be binding upon, shall inure to
      the
      benefit of, and shall be enforceable by the prospective heirs, beneficiaries,
      representatives, successors and assigns of the parties hereto. 

    5.4
      Resignation
      as Officer/Director.
      

     

    On
      the
      Closing Date:

    (a)
       Effective
      as of the Closing Date, or such later date as agreed to between the Issuer
      and
      its current officers, (i) the Issuer’s officers and directors shall resign and
      be duly replaced by the Purchaser’s designees; and (ii) the Issuer will cause
      the Purchaser’s director designee to be duly appointed. 

    

    (b)
       The
      Seller will use its reasonable best efforts to ensure that two of the Issuer’s
      current directors will remain a director of the Issuer until the expiration
      of
      the 10-day period beginning on the date of the filing of the Information
      Statement relating to a change in majority of directors of the Issuer with
      the
      Commission pursuant to Rule 14f-1 promulgated under the Exchange Act
      (“Information Statement”). 

    

    5.5 Prior
      Agreements; Amendments. This
      Agreement supersedes all prior agreements and understandings between the parties
      with respect to the subject matter hereof. This Agreement shall not be amended
      except by a writing signed by both parties or their respective successors or
      assigns. 

    

    5.6 Headings.
      The
      section and paragraph headings contained in this Agreement are for reference
      purposes only and shall not affect in any way the meaning or interpretations
      of
      this Agreement. 

    

    5.7 Governing
      Law.
      This
      Agreement shall be governed by and construed in accordance with the laws of
      the
      State of New York, without giving effect to the principles of conflicts of
      law
      thereof.

    

    5.8 Notices.
      All
      notices, requests, demands, and other communication hereunder shall be in
      writing and shall be deemed to have been duly given if delivered or mailed
      (registered or certified mail, postage prepaid, return receipt requested) as
      follows:

    

    If
      to the
      Seller:

    

    SENK
      VII,
      LLC

    3201
      Old
      Glenview Road, Suite 235

    Wilmette,
      IL 60091

    

    with
      a
      copy to:

    Mintz
      Levin Cohn Ferris Glovsky & Popeo, LLC

    666
      Third
      Avenue

    New
      York,
      NY 10017

    Attn.:
      Merav Gershtenman, Esq.

    Fax:
      (212) 983-3115

    

    If
      to the
      Purchaser: 

    

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    
      Triumph
        Small Cap Fund, Inc.

      68
        South
        Service Road

      Melville,
        New York 11747

       

    

    with
      a
      copy to:

    Sichenzia
      Ross Friedman Ference LLP

    61
      Broadway, 32 Floor

    New
      York,
      NY 10006

    Attn.:
      Richard Friedman, Esq.

    Fax:
      (212) 930-9725

     

    If
      to the
      Issuer:

    

    MAP
      VII
      Acquisition, Inc.

    3201
      Old
      Glenview Road, Suite 235

    Wilmette,
      IL 60091

    Attn:
      Lawrence E. Koehler

     

    5.9 Effect.
      In the
      event any portion of this Agreement is deemed to be null and void under any
      state, provincial, or federal law, all other portions and provisions not deemed
      void or voidable shall be given full force and effect.

    

    5.10 Counterparts.
      This
      Agreement may be executed in one or more counterparts and by transmission of
      a
      facsimile or digital image containing the signature of an authorized person,
      each of which shall be deemed and accepted as an original, and all of which
      together shall constitute a single instrument. Each party represents and
      warrants that the person executing on behalf of such party has been duly
      authorized to execute this Agreement.

    

    IN
      WITNESS WHEREOF, this Agreement has been duly executed and delivered by the
      Sellers, the Issuer and the Purchaser on the date first written
      above.

    

    *
      * * * *
      * * * *

    

    [Signature
      Page Follows]

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

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

    

    SELLERS:       

     

    SENK
      VII,
      LLC

     

    By:
      /s/ Ronald M. Lambert

    

    

    Lawrence
      E. Koehler 

    
By:
      /s/ Lawrence E. Koehler 

    

    

    C.A.
      Nathaniel Kramer

     

    By:
      /s/ C.A. Nathaniel Kramer

    

    

    Michael
      A. Reinsdorf

     

    By:
      /s/ Michael A. Reinsdorf

    

    

    Ronald
      M.
      Lambert 

    

    By:
      /s/ Ronald M. Lambert

    

     

    I.
      Steven
      Edelson 

     

    By:
      /s/ I. Steven Edelson 

    

    THE
      ISSUER:

    

    MAP
      VII
      Acquisition, Inc.

     

    By:
      /s/ I. Steven Edelson 

    Name:
       I.
      Steven
      Edelson

    Title:
       Chairman

    
 

    PURCHASER:

    

      Triumph
        Small Cap Fund, Inc.

    

    

    By:
      /s/ Jim Nelson

    Name:
      Jim
      Nelson

    Title:
Authorized
      Agent: Triumph Small Cap Fund
       

    

    
      
        
        

      

      
        8Exhibit
      10.1

     

     

     

    FILTRAN
      MICROCIRCUITS INC.

     

    -
      and -

     

    MERRIMAC
      INDUSTRIES, INC.

     

    -
      and -

     

    FIRAN
      TECHNOLOGY GROUP CORPORATION

     

    
      	    
 
	 
	
              ASSET
                PURCHASE AGREEMENT

            
	 

    

     

    DATED
      DECEMBER 28, 2007

     

     

    

     

     

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    ARTICLE
      1

    INTERPRETATION

    

      
        	
                1.1

              	 	
                Definitions

              	
                1

              
	
                1.2

              	 	
                Accounting
                  Principles

              	
                13

              
	
                1.3

              	 	
                Actions
                  on Non-Business Days

              	
                13

              
	
                1.4

              	 	
                Currency
                  and Payment Obligations

              	
                14

              
	
                1.5

              	 	
                Calculation
                  of Interest

              	
                14

              
	
                1.6

              	 	
                Calculation
                  of Time

              	
                14

              
	
                1.7

              	 	
                Knowledge

              	
                14

              
	
                1.8

              	 	
                Tender

              	
                14

              
	
                1.9

              	 	
                Additional
                  Rules of Interpretation

              	
                14

              
	
                 

              	
                (1)

              	
                Gender
                  and Number

              	
                14

              
	
                 

              	
                (2)

              	
                Headings
                  and Table of Contents

              	
                15

              
	
                 

              	
                (3)

              	
                Section
                  References

              	
                15

              
	
                 

              	
                (4)

              	
                Words
                  of Inclusion

              	
                15

              
	
                 

              	
                (5)

              	
                References
                  to this Agreement

              	
                15

              
	
                 

              	
                (6)

              	
                Statute
                  References

              	
                15

              
	
                 

              	
                (7)

              	
                Document
                  References

              	
                15

              
	
                1.10

              	 	
                Schedules
                  and Exhibits

              	
                15

              
	 	 
	
                ARTICLE
                  2

              	 
	
                PURCHASE
                  OF ASSETS

              	 
	 	 
	
                2.1

              	 	
                Purchase
                  and Sale of Purchased Assets

              	
                17

              
	
                2.2

              	 	
                Assumed
                  Liabilities

              	
                17

              
	
                2.3

              	 	
                Purchase
                  Price

              	
                17

              
	
                2.4

              	 	
                Payment
                  of Purchase Price

              	
                17

              
	
                2.5

              	 	
                Preparation
                  of Closing Date Statements

              	
                17

              
	
                 

              	
                (1)

              	
                Draft
                  Closing Date Statements

              	
                17

              
	
                 

              	
                (2)

              	
                Access
                  to Records, etc

              	
                17

              
	
                 

              	
                (3)

              	
                Deemed
                  Acceptance

              	
                18

              
	
                2.6

              	 	
                Dispute
                  Settlement

              	
                18

              
	
                2.7

              	 	
                Allocation
                  of Purchase Price

              	
                18

              
	
                2.8

              	 	
                Section
                  22 Tax Election

              	
                18

              
	
                2.9

              	 	
                GST
                  Election

              	
                19

              

      

    

     

    
      
         

      

      
        -i-

        
          

        

      

      
         

      

    

     

    
      TABLE
        OF CONTENTS

      (continued)

    
      
        	
                2.10

              	 	
                Adjustment
                  for Uncollected Receivables

              	
                19

              
	
                2.11

              	 	
                Prepaid
                  Income Tax Elections

              	
                19

              
	
                (1)

              	 	
                Subsection
                  20(24) Tax Elections

              	
                19

              
	
                (2)

              	 	
                Other
                  Tax Elections

              	
                19

              
	
                2.12

              	 	
                Other
                  Adjustments

              	
                19

              
	
                (1)

              	 	
                General

              	
                19

              
	
                (2)

              	 	
                Closing
                  Date

              	
                19

              
	
                (3)

              	 	
                Insurance

              	
                20

              
	 	 
	
                ARTICLE
                  3

              	 
	
                REPRESENTATIONS
                  AND WARRANTIES

              	 
	 	 
	
                3.1

              	 	
                Representations
                  and Warranties of the Vendor and Merrimac

              	
                21

              
	
                 

              	
                (1)

              	
                Incorporation
                  and Corporate Power of the Vendor and Merrimac

              	
                21

              
	
                 

              	
                (2)

              	
                Authorization
                  by the Vendor and Merrimac

              	
                21

              
	
                 

              	
                (3)

              	
                Enforceability
                  of Obligations

              	
                21

              
	
                 

              	
                (4)

              	
                Residence
                  of the Vendor

              	
                22

              
	
                 

              	
                (5)

              	
                Qualification
                  to do Business

              	
                22

              
	
                 

              	
                (6)

              	
                Financial
                  Statements

              	
                22

              
	
                 

              	
                (7)

              	
                Books
                  and Records

              	
                22

              
	
                 

              	
                (8)

              	
                Title
                  to and Sufficiency of Purchased Assets

              	
                22

              
	
                 

              	
                (9)

              	
                Personal
                  Property

              	
                22

              
	
                 

              	
                (10)

              	
                Leased
                  Premises

              	
                23

              
	
                 

              	
                (11)

              	
                Personal
                  Property Leases

              	
                23

              
	
                 

              	
                (12)

              	
                Contracts

              	
                23

              
	
                 

              	
                (13)

              	
                Receivables

              	
                24

              
	
                 

              	
                (14)

              	
                Inventories

              	
                24

              
	
                 

              	
                (15)

              	
                Regulatory
                  Approvals

              	
                24

              
	
                 

              	
                (16)

              	
                Computer
                  Systems

              	
                24

              
	
                 

              	
                (17)

              	
                Purchased
                  Intellectual Property

              	
                25

              
	
                 

              	
                (18)

              	
                Licences
                  and Compliance with Applicable Law

              	
                26

              
	
                 

              	
                (19)

              	
                Absence
                  of Conflicting Agreements

              	
                26

              

      

       

      
        
           

        

        
          -ii-

          
            

          

        

        
           

        

      

      

        TABLE
          OF CONTENTS

        (continued)

      

       

      
        	
                 

              	
                (20)

              	
                Legal
                  Proceedings

              	
                27

              
	
                 

              	
                (21)

              	
                Environmental
                  Matters

              	
                27

              
	
                 

              	
                (22)

              	
                Customers
                  and Suppliers

              	
                28

              
	
                 

              	
                (23)

              	
                Products
                  and Services

              	
                29

              
	
                 

              	
                (24)

              	
                Insurance

              	
                29

              
	
                 

              	
                (25)

              	
                December
                  18, 2007 Balance

              	
                30

              
	
                 

              	
                (26)

              	
                Sales
                  Tax Returns

              	
                30

              
	
                 

              	
                (27)

              	
                GST

              	
                30

              
	
                 

              	
                (28)

              	
                No
                  Material Adverse Change

              	
                30

              
	
                 

              	
                (29)

              	
                Absence
                  of Certain Changes or Events

              	
                30

              
	
                 

              	
                (30)

              	
                Full
                  Disclosure

              	
                31

              
	
                 

              	
                (31)

              	
                Workplace
                  Safety and Insurance Act (Ontario)

              	
                31

              
	
                3.2

              	 	
                Representations
                  and Warranties of the Purchaser

              	
                31

              
	
                 

              	
                (1)

              	
                Incorporation
                  and Corporate Power

              	
                31

              
	
                 

              	
                (2)

              	
                Authorization
                  by Purchaser

              	
                31

              
	
                 

              	
                (3)

              	
                Enforceability
                  of Obligations

              	
                31

              
	
                 

              	
                (4)

              	
                Investment
                  Canada Act

              	
                31

              
	
                 

              	
                (5)

              	
                Excise
                  Tax Act

              	
                31

              
	
                3.3

              	 	
                Commissions

              	
                32

              
	
                3.4

              	 	
                No
                  Waiver

              	
                32

              
	
                ARTICLE
                  4

              	 
	
                CLOSING
                  ARRANGEMENTS

              	 
	
                4.1

              	 	
                Closing

              	
                33

              
	
                4.2

              	 	
                Vendor’s
                  Closing Deliveries

              	
                33

              
	
                4.3

              	 	
                Purchaser’s
                  Closing Deliveries

              	
                34

              
	
                4.4

              	 	
                Possession

              	
                35

              
	
                4.5

              	 	
                Delayed
                  Transfer Assets

              	
                35

              
	
                4.6

              	 	
                Vendor
                  and Merrimac Covenant

              	
                36

              
	
                ARTICLE
                  5

              	 
	
                SURVIVAL
                  AND INDEMNIFICATION 

              	 
	
                5.1

              	 	
                Survival

              	
                36

              

      

       

      
        
           

        

        
          -iii-

          
            

          

        

        
           

        

      

      
         

        TABLE
          OF CONTENTS

        (continued) 

      

       

      
        	
                5.2

              	 	
                Obligation
                  of Merrimac

              	
                36

              
	
                5.3

              	 	
                Indemnity
                  by the Vendor and Merrimac

              	
                36

              
	
                5.4

              	 	
                Indemnity
                  by Merrimac

              	
                38

              
	
                5.5

              	 	
                Indemnity
                  by the Purchaser

              	
                38

              
	
                5.6

              	 	
                Notice
                  of Claim

              	
                38

              
	
                5.7

              	 	
                Time
                  Limits for Delivery of Notice of Claim for Breach of Representations
                  and
                  Warranties

              	
                39

              
	
                 

              	
                (1)

              	
                Notice
                  by the Purchaser

              	
                39

              
	
                 

              	
                (2)

              	
                Notice
                  by the Vendor or Merrimac

              	
                39

              
	
                5.8

              	 	
                Monetary
                  Limits on Damages for Breach of Representations and
                  Warranties

              	
                39

              
	
                5.9

              	 	
                Direct
                  Claims

              	
                40

              
	
                5.10

              	 	
                Third
                  Party Claims

              	
                40

              
	
                5.11

              	 	
                Interest
                  on Damages

              	
                42

              
	
                5.12

              	 	
                Set-off

              	
                42

              
	
                5.13

              	 	
                Limitation
                  on Amount of Damages

              	
                42

              
	 	 
	
                ARTICLE
                  6

              	 
	
                TECHNOLOGY
                  TRANSFER PERIOD

              	 
	 	 
	
                6.1

              	 	
                Technology
                  Transfer Period

              	
                43

              
	 	 
	
                ARTICLE
                  7

              	 
	
                GENERAL

              	 
	 	 
	
                7.1

              	 	
                Expenses

              	
                44

              
	
                7.2

              	 	
                Payment
                  of Taxes

              	
                44

              
	
                7.3

              	 	
                Public
                  Announcements

              	
                44

              
	
                7.4

              	 	
                Notices

              	
                44

              
	
                 

              	
                (1)

              	
                Mode
                  of Giving Notice

              	
                44

              
	
                 

              	
                (2)

              	
                Deemed
                  Delivery of Notice

              	
                45

              
	
                 

              	
                (3)

              	
                Change
                  of Address

              	
                45

              
	
                7.5

              	 	
                Time
                  of Essence

              	
                45

              
	
                7.6

              	 	
                Further
                  Assurances

              	
                45

              
	
                7.7

              	 	
                Co-operation
                  in Filing of Returns

              	
                45

              
	
                7.8

              	 	
                Entire
                  Agreement

              	
                46

              

      

       

      
        
           

        

        
          -iv-

          
            

          

        

        
           

        

      

       

      TABLE
        OF CONTENTS

      (continued) 

       

       

      
        	
                7.9

              	 	
                Amendment

              	
                46

              
	
                7.10

              	 	
                Waiver

              	
                46

              
	
                7.11

              	 	
                Severability

              	
                46

              
	
                7.12

              	 	
                Remedies
                  Cumulative

              	
                46

              
	
                7.13

              	 	
                Attornment

              	
                46

              
	
                7.14

              	 	
                Governing
                  Law

              	
                47

              
	
                7.15

              	 	
                Successors
                  and Assigns

              	
                47

              
	
                7.16

              	 	
                Counterparts

              	
                48

              
	
                7.17

              	 	
                Language

              	
                48

              

      

    

     

    
      
         

      

      
        -v-

        
          

        

      

      
         

      

    

    ASSET
      PURCHASE AGREEMENT

     

    This
      Agreement dated December 28, 2007 is made

     

    B
      E T W E
      E N

     

    FILTRAN
      MICROCIRCUITS INC.

    (the
      “Vendor”)

     

    -
      and -

     

    MERRIMAC
      INDUSTRIES, INC.

    (“Merrimac”)

     

    -
      and -

     

    FIRAN
      TECHNOLOGY GROUP CORPORATION 

    (the
      “Purchaser”)

     

    RECITALS

     

    
      	A.	
              The
                Vendor carries on the Business and is willing to sell the Purchased
                Assets
                to the Purchaser;

            

    

     

    
      	B.	
              The
                Purchaser is willing to purchase the Purchased Assets and to assume
                the
                Assumed Liabilities on and subject to the terms and conditions contained
                in this Agreement;

            

    

     

    
      	C.	
              Merrimac,
                which owns all of the issued and outstanding capital of the Vendor,
                consents to the sale of the Purchased Assets and, among other things,
                agrees to indemnify the Purchaser as set out
                herein.

            

      	 	 

      	 	For good and valuable consideration,
              the
              receipt and adequacy of which are hereby acknowledged by each Party,
              the
              Parties agree as follows:

    

    ARTICLE
      1

     

    INTERPRETATION

     

    
      	1.1	
              Definitions.
                In this Agreement:

            

    

     

    “Affiliate”
      means,
      with respect to any Person, any other Person who directly or indirectly
      controls, is controlled by, or is under direct or indirect common control with,
      such Person, and includes any Person in like relation to an Affiliate. A Person
      shall be deemed to “control”
another
      Person if such Person possesses, directly or indirectly, the power to direct
      or
      cause the direction of the management and policies of such other Person, whether
      through the ownership of voting securities, by contract or otherwise; and the
      term “controlled”
shall
      have a similar meaning.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    “Agreement”
      means
      this asset purchase agreement and all the Exhibits and the Schedules attached
      hereto.

     

    “Annual
      Financial Statements”
means
      the annual audited financial statements of the Vendor for the fiscal year ended
      December 31, 2006, true and complete copies of which are attached as Schedule
      3.1(6).

     

    “Applicable
      Law”
      means,
      with respect to any Person, property, transaction, event or other matter, (i)
      any foreign or domestic constitution, treaty, law, statute, regulation, code,
      ordinance, principle of common law or equity, rule, municipal by-law, Order
      or
      other requirement (including a requirement arising at common law) having the
      force of law, (ii) any policy, practice, protocol, standard or guideline of
      any
      Governmental Authority which, although not necessarily having the force of
      law,
      is regarded by such Governmental Authority as requiring compliance as if it
      had
      the force of law (collectively, the “Law”)
      relating or applicable to such Person, property, transaction, event or other
      matter and also includes, where appropriate, any interpretation of the Law
      (or
      any part thereof) by any Person having jurisdiction over it, or charged with
      its
      administration or interpretation.

     

    “Assumed
      Liabilities”
      means
      only the following Liabilities of the Vendor:

     

    
      	 	
              (a)

            	
              Liabilities
                under (i) the Contracts (other than Excluded Contracts); (ii) the
                Licences; and (iii) the Purchased Intellectual Property, in each
                case in
                respect of the period commencing at the Closing Time and not related
                to
                any matter, circumstance or default existing at, prior to or as a
                consequence of Closing; and

            

    

     

    
      	 	
              (b)

            	
              Liabilities
                on account of trade accounts payable incurred in the Ordinary Course
                of
                Business before the Closing Time, but only to the extent that such
                trade
                accounts payable are included in the Closing Working Capital Amount
                and
                reflected in the Closing Date
                Statements.

            

    

     

    “Books
      and Records”
      means
      the Financial Records and all other books, records, files and papers Related
      to
      the Business including drawings, engineering information, computer programs
      (including source code), software programs, manuals and data, sales and
      advertising materials, sales and purchase correspondence, trade association
      files, research and development records, lists of present and former customers
      and suppliers, personnel, employment and other records, and all records, data
      and information stored electronically, digitally or on computer-related
      media.

     

    “Business”
means
      the business carried on by the Vendor which involves the build-to-print
      manufacture and sale of microwave printed circuit boards for high frequency
      applications industry. 

     

    “Business
      Day”
      means
      any day except Saturday, Sunday or any day on which banks are generally not
      open
      for business in the City of Toronto.

     

    “Canadian
      Dollars” means
      the
      lawful currency of Canada.

     

    
      
         

      

      
        -
          2 -

        
          

        

      

      
         

      

    

    “Clearance
      Certificates” means
      a
      certificate pursuant to Section 6 of the Retail
      Sales Act
      (Ontario) and certificates pursuant to similar legislation in each other
      jurisdiction in which any of the Purchased Assets are located or the Vendor
      is
      registered for sales tax purposes, each of which indicates that all Taxes
      collectible or payable by the Vendor under such legislation have been paid
      up to
      the Closing Date or that the Vendor has entered into satisfactory arrangements
      for payment of such Taxes.

     

    “Closing”
      means
      the completion of the purchase and sale of the Purchased Assets in accordance
      with the provisions of this Agreement.

     

    “Closing
      Date”
      means
      the date hereof.

     

    “Closing
      Date Statements”
      means
      (i) the balance sheet of the Business as of 12:01 a.m. on the Closing Date
      prepared, except as specified in Exhibit A, on a consistent basis and applying
      the same accounting principles, policies and practices as were used in preparing
      the Financial Statements and (ii) a statement setting forth the Closing Working
      Capital Amount and the Adjustment Amount, if any, in each case, as determined
      from such balance sheet, all as finally determined pursuant to Section 2.5
      or
      2.6, as the case may be.

     

    “Closing
      Time” means
      the
      time of Closing on the Closing Date provided for in Section 4.1.

     

    “Computer
      Systems” means
      all
      computer hardware, peripheral equipment, software and firmware, processed data,
      technology infrastructure and other computer systems and services that are
      used
      by or accessible to the Vendor to operate the Business and to receive, store,
      process or transmit data Related to the Business.

     

    “Consent”
      means
      any consent, approval, permit, waiver, ruling, exemption or acknowledgement
      from
      any Person (other than the Vendor) which is provided for or required: (i) in
      respect of or pursuant to the terms of any Contract; or (ii) under any
      Applicable Law, in either case in connection with the sale of the Purchased
      Assets to the Purchaser on the terms contemplated in this Agreement, to permit
      the Purchaser to use the Purchased Assets to carry on the Business after
      Closing, or which is otherwise necessary to permit the Parties to perform their
      obligations under this Agreement, but does not include a Regulatory
      Approval.

     

    “Contracts”
      means
      all pending and executory contracts, agreements, leases and arrangements
      (whether oral or written) Related to the Business to which the Vendor is a
      party
      or by which the Vendor or any of the Purchased Assets is bound or under which
      the Vendor has rights, including Premises Leases, Personal Property Leases
      and
      Permitted Liens.

     

    “Damages”
      means,
      whether or not involving a Third Party Claim, any loss, cost, liability, claim,
      interest, fine, penalty, assessment, damages available at law or in equity,
      expense (including reasonable costs, fees and expenses of legal counsel on
      a
      full indemnity basis, without reduction for tariff rates or similar reductions
      and reasonable costs, fees and expenses of investigation) or diminution in
      value.

     

    
      
         

      

      
        -
          3 -

        
          

        

      

      
         

      

    

    “Delayed
      Transfer Assets”
      has the
      meaning given in Section 4.5(1).

     

    “Direct
      Claim” has
      the
      meaning set out in Section 5.7.

     

    “Employee”
      means an
      individual who is employed by the Vendor in the Business, whether on a full-time
      or part-time basis.

     

    “Employee
      Plans”
      means
      any written or oral employee benefit, welfare, supplemental unemployment
      benefit, bonus, pension, profit sharing, executive compensation, current or
      deferred compensation, incentive compensation, stock compensation, stock
      purchase, stock option, stock appreciation, phantom stock option, savings,
      severance or termination pay, retirement, supplementary retirement,
      hospitalization insurance, salary continuation, legal, health or medical,
      dental, life, disability or other insurance (whether insured or self-insured),
      plan, program, agreement or arrangement and every other written or oral benefit
      plan, program, agreement or arrangements sponsored, maintained or contributed
      to
      or required to be contributed to by the Vendor or any Affiliate of the Vendor
      for the benefit of the Employees or former Employees and their dependants or
      beneficiaries at any time or as provided by any collective agreement to which
      the Vendor is a party or by which it is, or was at any time, bound or with
      respect to which the Vendor participates or has any actual or potential
      liability or obligations, including plans established by statute.

     

    “Environmental
      Law”
      means
      Applicable Law in respect of the natural environment, public or occupational
      health or safety, and the manufacture, importation, handling, transportation,
      storage, disposal and treatment of Hazardous Substances.

     

    “Environmental
      Permit”
      means
      any Licence issued or required pursuant to any Environmental Law.

     

    “EQ
      36 Program”
means
      the rights and interests of Merrimac in Lockheed Martin’s project to produce
      EQ-36 Counterfire Target Acquisition Radar for the United States
      Army.

     

    “Excluded
      Assets”
means
      the following property and assets of the Vendor:

     

    
      	 	
              (c)

            	
              the
                minute books and other corporate
                records;

            

    

     

    
      	 	
              (d)

            	
              all
                rights and interests in and to the Employee Plans and Pension Plans
                and
                any related assets or insurance
                policies;

            

    

     

    
      	 	
              (e)

            	
              the
                rights of the Vendor and Merrimac under this Agreement or any other
                agreement, certificate or instrument executed and delivered pursuant
                to
                this Agreement;

            

    

     

    
      	 	
              (f)

            	
              all
                Excluded Intellectual Property;

            

    

     

    
      	 	
              (g)

            	
              all
                Excluded Contracts;

            

    

     

    
      
         

      

      
        -
          4 -

        
          

        

      

      
         

      

    

     

    
      	 	
              (h)

            	
              income
                tax refunds and other Tax refunds receivable by the Vendor and all
                Tax
                Returns pertaining to corporate income taxes of the
                Vendor;

            

    

     

    
      	 	
              (i)

            	
              Books
                and Records that the Vendor is required by Applicable Law to retain
                in its
                possession;

            

    

     

    
      	 	
              (j)

            	
              the
                property and assets of the Vendor listed in Schedule 3.1(8).
                

            

    

     

    “Excluded
      Contracts”
means
      the contracts and agreements listed in Schedule 3.1(12)
      under
      the heading “Excluded Contracts”. 

     

    “Excluded
      Intellectual Property”
      means
      all rights to and interests in:

     

    
      	 	
              (a)

            	
              all
                business names, trade names, corporate names and telephone numbers
                Related
                to the Business, including, without retraction, the names Filtran
                Microcircuits and Filtran Micro-circuits;
                and

            

    

     

    
      	 	
              (b)

            	
              all
                trade-marks (whether used with wares or services and including the
                goodwill attaching to such trade-marks) and registrations and applications
                for registration of trade-marks and all trade dress, logos, slogans
                and
                brand names Related to the
                Business.

            

    

     

    “Excluded
      Personal Property”
      means
      all Personal Property set out in Schedule 1.1.

     

    “Financial
      Records”
      means
      all of the books of account and other financial data and information Related
      to
      the Business or related to the Purchased Assets, and includes all records,
      data
      and information stored electronically, digitally or on computer-related
      media.

     

    “Financial
      Statements” means
      the
      Annual Financial Statements and the Interim Financial Statements.

     

    “GAAP”
      means
      Canadian generally accepted accounting principles.

     

    “Governmental
      Authority”
      means:

     

    
      	 	
              (a)

            	
              any
                domestic or foreign government, whether national, federal, provincial,
                state, territorial, municipal or local (whether administrative,
                legislative, executive or
                otherwise);

            

    

     

    
      	 	
              (b)

            	
              any
                agency, authority, ministry, department, regulatory body, court,
                central
                bank, bureau, board or other instrumentality having legislative,
                judicial,
                taxing, regulatory, prosecutorial or administrative powers or functions
                of, or pertaining to, government;

            

    

     

    
      	 	
              (c)

            	
              any
                court, commission, individual, arbitrator, arbitration panel or other
                body
                having adjudicative, regulatory, judicial, quasi-judicial, administrative
                or similar functions; and

            

    

     

    
      
         

      

      
        -
          5 -

        
          

        

      

      
         

      

    

     

    
      	 	
              (d)

            	
              any
                other body or entity created under the authority of or otherwise
                subject
                to the jurisdiction of any of the foregoing, including any stock
                or other
                securities exchange or professional
                association.

            

    

     

    “GST”
      means
      the
      goods and services tax imposed under Part IX of the Excise
      Tax Act
      (Canada).

     

    “Hazardous
      Substance”
      means
      any solid, liquid, gas, odour, heat, sound, vibration, radiation or combination
      of them that may impair the natural environment, injure or damage property
      or
      plant or animal life or harm or impair the health of any individual and includes
      any contaminant, waste, substance or material defined by Environmental Law
      as
      hazardous, toxic or dangerous or any other substance or material prohibited,
      regulated or reportable pursuant to any Environmental Law.

     

    “ICA”
      means
      the Investment
      Canada Act
      (Canada).

     

    “Improvements”
      means
      all buildings, fixtures, sidings, parking lots, roadways, structures, erections,
      fixed machinery, fixed equipment and appurtenances situate on, in, under, over
      or forming part of, any real property.

     

    “Income
      Tax Act”
      means
      the Income
      Tax Act,
      R.S.C.
      1985, 5th Supplement and the regulations thereunder.

     

    “Indemnified
      Party”
      means a
      Person whom the Vendor or the Purchaser, as the case may be, is required to
      indemnify under Article
      5.

     

    “Indemnifying
      Party”
      means,
      in relation to an Indemnified Party, the Party to this Agreement that is
      required to indemnify such Indemnified Party under Article
      5.

     

    “Independent
      Accountant” has
      the
      meaning set out in Section 2.6.

     

    “Interim
      Financial Statements”
      means
      the unaudited financial statements of the Vendor for the nine month period
      ended
      September 30, 2007, true and complete copies of which are attached as Schedule
      3.1(6).

     

    “Inventories”
      means
      all inventories of stock-in-trade and merchandise including materials, supplies,
      work-in-progress, finished goods, tooling, service parts and purchased finished
      goods Related to the Business, including those in possession of suppliers,
      customers and other third parties.

     

    “Law”
      has
      the
      meaning set out in the definition of “Applicable Law”.

     

    “Leased
      Premises”
      means
      the real property that is leased, subleased, licensed to or otherwise occupied
      by, the Vendor and which is Related to the Business, including all Improvements
      situate on, in, under, over or forming part of such real property.

     

    “Leases”
      means
      Personal Property Leases and Premises Leases.

     

    
      
         

      

      
        -
          6 -

        
          

        

      

      
         

      

    

    “Legal
      Proceeding”
      means
      any litigation, action, application, suit, investigation, hearing, claim, deemed
      complaint, grievance, civil, administrative, regulatory or criminal, arbitration
      proceeding or other similar proceeding, before or by any court or other tribunal
      and includes any appeal or review thereof and any application for leave for
      appeal or review.

     

    “Liability”
means,
      with respect to any Person, any liability or obligation of such Person of any
      kind, character or description, whether known or unknown, absolute or
      contingent, accrued or unaccrued, disputed or undisputed, liquidated or
      unliquidated, secured or unsecured, joint or several, due or to become due,
      vested or unvested, executory, determined, determinable or otherwise, and
      whether or not the same is required to be accrued on the financial statements
      of
      such Person.

     

    “Licence”
      means
      any licence, permit, authorization, approval or other evidence of authority
      Related to the Business issued or granted to, conferred upon, or otherwise
      created for, the Vendor by any Governmental Authority.

     

    “Lien”
      means
      any lien, mortgage, charge, hypothec, pledge, security interest, prior
      assignment, option, warrant, lease, sublease, right to possession, encumbrance,
      claim, right or restriction which affects, by way of a conflicting ownership
      interest or otherwise, the right, title or interest in or to any particular
      property.

     

    “Material
      Adverse Change” means
      a
      change in the Business or the Purchased Assets or in the operations, affairs,
      prospects or condition (financial or otherwise) of the Business or any of the
      Purchased Assets including any such change arising as a result of any change
      in
      Applicable Law, the amendment or revocation of any Licence or as a result of
      fire, explosion, accident, casualty, labour problem, flood, drought, riot,
      storm, terrorist act, pandemic, disease, influenza, virus, act of God or
      otherwise, except for changes occurring in the Ordinary Course of Business
      which, either individually or in the aggregate, have not materially adversely
      affected and will not materially adversely affect the Business or the Purchased
      Assets or the operations, affairs, prospects or condition (financial or
      otherwise) of the Business or any of the Purchased Assets.

     

    “Material
      Contract”
      means a
      Contract which involves or may reasonably be expected to involve the payment
      to
      or by the Vendor of more than $50,000 over the term of that Contract or any
      other Contract that is otherwise material to the operation of the
      Business.

     

    “Notice
      of Claim”
      has the
      meaning set out in Section 5.7.

     

    “Occupancy
      Agreement” has
      the
      meaning set out in Section 6.1.

     

    “Order”
      means
      any order, directive, judgment, decree, injunction, decision, ruling, award
      or
      writ of any Governmental Authority.

     

    “Ordinary
      Course of Business”,
      when
      used in relation to the taking of action by the Vendor in relation to the
      Business means that the action:

     

    
      
         

      

      
        -
          7 -

        
          

        

      

      
         

      

    

     

    
      	 	
              (a)

            	
              is
                consistent in nature, scope and magnitude with the past practices
                of the
                Vendor in relation to the Business and is taken in the ordinary course
                of
                the normal day-to-day operations of the
                Business;

            

    

     

    
      	 	
              (b)

            	
              is
                similar in nature, scope and magnitude to actions customarily taken
                in the
                ordinary course of the normal day-to-day operations of the other
                Persons
                that are in lines of business that are the same as the Business;
                and

            

    

     

    
      	 	
              (c)

            	
              does
                not require authorization of the shareholders of the Vendor or any
                other
                separate or special authorization of any
                nature.

            

    

     

    “Party”
      means a
      party to this Agreement and any reference to a Party includes its successors
      and
      permitted assigns and “Parties”
      means
      every Party.

     

    “Pension
      Plans” means
      any
“registered pension plan” as that term is defined in subsection 248(1) of the
      Income Tax Act.

     

    “Permitted
      Liens”
      means
      the following Liens related to the Purchased Assets:

     

    
      	 	
              (a)

            	
              construction,
                mechanics’, carriers’, workers’, repairers’, storers’ or other similar
                liens (inchoate or otherwise) if individually or in the aggregate
                they:
                (i) are not material; (ii) arose or were incurred in the Ordinary
                Course
                of Business; (iii) have not been filed, recorded or registered in
                accordance with Applicable Law; (iv) notice of them has not been
                given to
                the Vendor; and (v) the indebtedness secured by them is not in
                arrears;

            

    

     

    
      	 	
              (b)

            	
              the
                Liens listed in Schedule 1.2.

            

    

     

    “Person”
      is to be
      broadly interpreted and includes an individual, a corporation, a partnership,
      a
      trust, an unincorporated organization, a Governmental Authority, and the
      executors, administrators or other legal representatives of an individual in
      such capacity.

     

    “Personal
      Information”
means
      information about an identifiable individual as defined in Privacy
      Law.

     

    “Personal
      Property”
      means
      all machinery, equipment, furniture, motor vehicles and other chattels used
      in
      carrying on the Business, including those in possession of suppliers, customers
      and other third parties, other than the Excluded Personal Property set out
      in
      Schedule 1.1.

     

    “Personal
      Property Lease” 
      means a
      chattel lease, equipment lease, conditional sales contract and other similar
      agreement used in carrying on the Business to which the Vendor is a party or
      under which it has rights to use Personal Property.

     

    “Premises
      Lease”
      means a
      lease, an agreement to lease, a sublease, a licence agreement and an occupancy
      or other agreement under which the Vendor has the right, or the Vendor has
      granted to another Person the right, to use or occupy any Leased
      Premises.

     

    
      
         

      

      
        -
          8 -

        
          

        

      

      
         

      

    

    “Prepaid
      Amounts”
      means
      all prepayments, prepaid charges, deposits, sums and fees Related to the
      Business or held in respect of the Purchased Assets.

     

    “Prime
      Rate”
      means
      the prime rate of interest per annum quoted by the Bank of Canada from time
      to
      time as its reference rate of interest for Canadian dollar demand loans made
      to
      its commercial customers in Canada and which the Bank of Canada refers to as
      its
“prime rate”, as such rate may be changed from time to time.

     

    “Purchase
      Price”
      has the
      meaning set out in Section 2.3.

     

    “Purchased
      Assets” means
      all
      the properties, assets, interests and rights of the Vendor which are Related
      to
      the Business, other than the Excluded Assets, including the
      following:

     

    
      	 	
              (a)

            	
              the
                Personal Property;

            

    

     

    
      
         

      

      
        -
          9 -

        
          

        

      

      
         

      

    

     

    
      	 	
              (b)

            	
              the
                Inventories;

            

    

     

    
      	 	
              (c)

            	
              the
                Receivables;

            

    

     

    
      	 	
              (d)

            	
              all
                cash, cash equivalents and short-term
                investments;

            

    

     

    
      	 	
              (e)

            	
              all
                rights and interests under or pursuant to all warranties, representations
                and guarantees, express, implied or otherwise, of or made by suppliers
                or
                others in connection with the Purchased Assets or the Assumed Liabilities
                or otherwise arising from the operation of the
                Business;

            

    

     

    
      	 	
              (f)

            	
              the
                Purchased Intellectual Property;

            

    

     

    
      	 	
              (g)

            	
              the
                Contracts;

            

    

     

    
      	 	
              (h)

            	
              the
                Licenses;

            

    

     

    
      	 	
              (i)

            	
              the
                Books and Records, including the Financial
                Records;

            

    

     

    
      	 	
              (j)

            	
              the
                Prepaid Amounts;

            

    

     

    
      	 	
              (k)

            	
              all
                goodwill Related to the Business;
                and

            

    

     

    
      	 	
              (l)

            	
              all
                proceeds of any or all of the foregoing received or receivable after
                the
                Closing Time.

            

    

     

    “Purchased
      Intellectual Property”
      means
      all rights to and interests in, if any:

     

    
      	 	
              (a)

            	
              the
                domain names, domain name registrations, website names and worldwide
                web
                addresses and other communications addresses Related to the Business,
                including but not limited to www.filtranmicro.com;
                

            

    

     

    
      	 	
              (b)

            	
              all
                inventions, patents, patent rights, patent applications (including
                all
                reissues, divisions, continuations, continuations-in-part and extensions
                of any patent or patent application) Related to the
                Business;

            

    

     

    
      	 	
              (c)

            	
              all
                industrial designs and applications for and registration of industrial
                designs, design patents and industrial design registrations Related
                to the
                Business;

            

    

     

    
      	 	
              (d)

            	
              all
                copyright in all works (including software programs and databases)
                and
                database rights and registrations and applications for registrations
                of
                copyright Related to the Business;

            

    

     

    
      	 	
              (e)

            	
              all
                rights and interests in and to processes, lab journals, notebooks,
                data,
                trade secrets, designs, know-how, product formulae and information,
                manufacturing, engineering and other drawings and manuals, technology,
                blue prints, research and development reports, agency agreements,
                technical information, technical assistance, engineering data, design
                and
                engineering specifications, and similar materials recording or evidencing
                expertise or information Related to the
                Business;

            

    

     

    
      	 	
              (f)

            	
              all
                of the intellectual property affected by the registrations and
                applications for registration listed in Schedule 3.1(17) and the
                permissions and licences listed in Schedule
                3.1(17);

            

    

     

    
      	 	
              (g)

            	
              all
                other intellectual property rights throughout the world used in carrying
                on, or arising from the operation of, the
                Business;

            

    

     

    
      	 	
              (h)

            	
              all
                licences granted by the Vendor of the intellectual property listed
                in
                items (a) to (g) above;

            

    

     

    
      	 	
              (i)

            	
              all
                future income and proceeds from any of the intellectual property
                listed in
                items (a) to (g) above and the licences listed in item (h) above;
                and

            

    

     

    
      	 	
              (j)

            	
              all
                rights to damages and profits by reason of the infringement of any
                of the
                intellectual property listed in items (a) to (g) above and the licences
                listed in item (h) above.

            

    

     

    “Purchaser’s
      Counsel”
      means
      Blake, Cassels & Graydon LLP.

     

    “Purchaser’s
      Indemnified Parties”
      means
      the Purchaser and the Purchaser’s Affiliates and their respective directors,
      officers, employees and agents.

     

    “Receivables”
      means
      all accounts receivable, bills receivable, trade accounts, book debts and
      insurance claims Related to the Business, together with any unpaid interest
      accrued on such items and any security or collateral for such items, including
      recoverable deposits.

     

    “Regulatory
      Approval” means
      any
      approval, consent, ruling, authorization, notice, permit or acknowledgement
      that
      may be required from any Person pursuant to Applicable Law or under the terms
      of
      any Licence or the conditions of any Order in connection with the sale of the
      Purchased Assets to the Purchaser on the terms contemplated by this Agreement,
      or to permit the Purchaser to use the Purchased Assets to carry on the Business
      after Closing or which is otherwise necessary to permit the Parties to perform
      their obligations under this Agreement.

     

    
      
         

      

      
        -
          10 -

        
          

        

      

      
         

      

    

    “Related
      Person”
      means,
      with respect to any Person, an Affiliate of such Person and any other Person
      with whom such Person does not deal at arm’s length within the meaning of the
      Income Tax Act.

     

    “Related
      to the Business”
      means,
      directly or indirectly, used in, arising from or otherwise related to the
      Business.

     

    “Release”
      includes
      an actual or potential discharge, deposit, spill, leak, pumping, pouring,
      emission, emptying, injection, escape, leaching, seepage or disposal of a
      Hazardous Substance which is or may be in breach of any Environmental
      Law.

     

    “Representative”
      when
      used with respect to a Party means each director, officer, employee, agent,
      consultant, adviser and other representative of that Party who is involved
      in
      the transactions contemplated by this Agreement.

     

    “Retained
      Liabilities”
      means
      all Liabilities of the Vendor other than the Assumed Liabilities,
      including:

     

    
      	 	
              (a)

            	
              any
                Liability arising out of or related to products manufactured and
                distributed by the Vendor prior to the Closing Date, excluding warranty
                repair occurring in the Ordinary Course of
                Business;

            

    

     

    
      	 	
              (b)

            	
              any
                Liability arising out of or related to services provided by the Vendor
                to
                its customers prior to the Closing Date, excluding warranty repair
                occurring in the Ordinary Course of
                Business;

            

    

     

    
      	 	
              (c)

            	
              any
                Liability under any Contract arising after the Closing Date that
                arises
                out of or relates to a breach of, or default under, that Contract
                prior to
                the Closing Date;

            

    

     

    
      	 	
              (d)

            	
              any
                Liability for Taxes;

            

    

     

    
      	 	
              (e)

            	
              any
                Liability under any Excluded
                Contract;

            

    

     

    
      	 	
              (f)

            	
              any
                Liability under or relating to any Employee Plan or any Pension
                Plan;

            

    

     

    
      	 	
              (g)

            	
              any
                Liability for or to any Employee;

            

    

     

    
      	 	
              (h)

            	
              any
                Liability of the Vendor to any Affiliate of the Vendor or other Related
                Person of the Vendor;

            

    

     

    
      	 	
              (i)

            	
              any
                Liability to indemnify, reimburse or advance any amounts to any Employee
                or to any officer, director, or agent of the
                Vendor;

            

    

     

    
      
         

      

      
        -
          11 -

        
          

        

      

      
         

      

    

     

    
      	 	
              (j)

            	
              any
                Liability to distribute to any of the Vendor’s shareholders or otherwise
                apply all or any part of the consideration received by the Vendor
                under
                this Agreement;

            

    

     

    
      	 	
              (k)

            	
              any
                Liability in respect of the Leased Premises which occurred or was
                occurring or which is a result of any actions of the Vendor or Merrimac
                prior to or during the Technology Transfer
                Period;

            

    

     

    
      	 	
              (l)

            	
              any
                Liability in respect of:

            

    

     

    
      	 	
              (i)

            	
              the
                revolving credit agreement which the Vendor has in place with the
                Bank of
                Nova Scotia;

            

    

     

    
      	 	
              (ii)

            	
              the
                revolving lease line which the Vendor has in place with the Bank
                of Nova
                Scotia;

            

    

     

    
      	 	
              (iii)

            	
              any
                inter-company debt between the Vendor and Merrimac or other loans,
                debts
                or similar agreements or arrangements between the Vendor and Merrimac
                or
                the Vendor and any of its Affiliates;
                and

            

    

     

    
      	 	
              (iv)

            	
              any
                Liability under any agreement or arrangement between the Vendor or
                Merrimac in respect of Rogers
                Corporation.

            

    

     

    
      	 	
              (m)

            	
              any
                Liability to customers of the Business under written warranties given
                by
                the Vendor to its customers in the Ordinary Course of
                Business;

            

    

     

    
      	 	
              (n)

            	
              any
                Liability arising out of or resulting from the Vendor’s compliance or
                non-compliance with any Applicable Law;
                and

            

    

     

    
      	 	
              (o)

            	
              any
                Liability of the Vendor or Merrimac under this Agreement or in any
                other
                agreement, certificate or instrument executed and delivered pursuant
                to
                this Agreement.

            

    

     

    “Tax
      Returns”
means
      all returns, information returns, reports, elections, agreements, declarations
      or other documents of any nature or kind required to be filed with any
      applicable Governmental Authority in respect of Taxes.

     

    “Taxes”
      means
      all taxes including all income, sales, use, goods and services, harmonized
      sales, value added, capital, capital gains, alternative, net worth, transfer,
      profits, withholding, payroll, employer health, excise, franchise, real property
      and personal property taxes, and any other taxes, customs duties, fees, levies,
      imposts and other assessments or similar charges in the nature of a tax
      including Canada Pension Plan and provincial pension plan contributions,
      employment insurance and unemployment insurance payments and workers’
compensation premiums, together with any instalments with respect thereto,
      and
      any interest, fines and penalties, in all cases imposed by any Governmental
      Authority in respect thereof and whether disputed or not.

     

    “Technology
      Transfer Period”
      means a
      period commencing on the Closing Date and ending on the date that is eight
      weeks
      following the Closing Date.

     

    
      
         

      

      
        -
          12 -

        
          

        

      

      
         

      

    

    “Third
      Party Claim”
      has the
      meaning set out in Section 5.7.

     

    “Threatened”,
      when
      used in relation to a Legal Proceeding or other matter, means that a demand
      or
      statement (oral or written) has been made or a notice (oral or written) has
      been
      given that a Legal Proceeding or other matter is to be asserted, commenced,
      taken or otherwise pursued in the future or that an event has occurred or
      circumstances exist that would lead a reasonable Person to conclude that a
      Legal
      Proceeding or other matter is likely to be asserted, commenced, taken or
      otherwise pursued in the future.

     

    “Transitional
      Services Agreement” has
      the
      meaning set out in Section 6.1.

     

    “Vendor’s
      Counsel”
      means
      LaBarge Weinstein.

     

    “Vendor’s
      Indemnified Parties”
      means
      the Vendor, the Vendor’s Affiliates and Merrimac and their respective directors,
      officers, employees and agents.

     

    “Working
      Capital”
      means,
      at any date, the amount calculated by subtracting the current liabilities of
      the
      Business included in the Assumed Liabilities as of that date from the current
      assets of the Business included in the Purchased Assets as of that
      date.

     

    1.2         
      Accounting
      Principles.
      Whenever
      in this Agreement reference is made to generally accepted accounting principles,
      or to GAAP, such reference shall be deemed to be to the generally accepted
      accounting principles from time to time approved by the Canadian Institute
      of
      Chartered Accountants, or any successor entity thereto, applicable as at the
      date on which such principles are to be applied or on which any calculation
      or
      determination is required to be made in accordance with generally accepted
      accounting principles.

     

    1.3         
      Actions
      on Non-Business Days.
      If any
      payment is required to be made or other action (including the giving of notice)
      is required to be taken pursuant to this Agreement on a day which is not a
      Business Day, then such payment or action shall be considered to have been
      made
      or taken in compliance with this Agreement if made or taken on the next
      succeeding Business Day.

     

    1.4         
      Currency
      and Payment Obligations.
      Except
      as otherwise expressly provided in this Agreement:

     

    
      	 	
              (a)

            	
              all
                dollar amounts referred to in this Agreement are stated in Canadian
                Dollars;

            

    

     

    
      	 	
              (b)

            	
              any
                payment contemplated by this Agreement shall be made by wire transfer
                of
                immediately available funds to an account specified by the payee,
                by cash,
                by certified cheque or by any other method that provides immediately
                available funds; and

            

    

     

    
      	 	
              (c)

            	
              except
                in the case of any payment due on the Closing Date, any payment due
                on a
                particular day must be received by and be available to the payee
                not later
                than 2:00 p.m. on the due date at the payee’s address for notice
                under Section 7.4
                or
                such other place as the payee may have specified in writing to the
                payor
                in respect of a particular payment and any payment made after that
                time
                shall be deemed to have been made and received on the next Business
                Day.

            

    

     

    
      
         

      

      
        -
          13 -

        
          

        

      

      
         

      

    

    1.5         
      Calculation
      of Interest.
      In
      calculating interest payable under this Agreement for any period of time, the
      first day of such period shall be included and the last day of such period
      shall
      be excluded.

     

    1.6         
      Calculation
      of Time.
      In this
      Agreement, a period of days shall be deemed to begin on the first day after
      the
      event which began the period and to end at 5:00 p.m. Toronto time on the last
      day of the period. If any period of time is to expire hereunder on any day
      that
      is not a Business Day, the period shall be deemed to expire at 5:00 p.m.
      Toronto time
      on
      the next succeeding Business Day.

     

    1.7         
      Knowledge.
      Where
      any representation, warranty or other statement in this Agreement is expressed
      to be made by the Vendor to its knowledge or is otherwise expressed to be
      limited in scope to facts or matters known to the Vendor or of which the Vendor
      is aware, it shall mean such knowledge as is actually known to, or which would
      have or should have come to the attention of, the officers or employees of
      the
      Vendor who have overall responsibility for or knowledge of the matters relevant
      to such statement.

     

    1.8        
      Tender.
      Any
      tender of documents or money hereunder may be made upon the Parties or their
      respective counsel and money shall be tendered by wire transfer, official bank
      draft drawn upon the Purchaser’s, the Vendor’s or Merrimac’s bank or by
      negotiable cheque payable in Canadian funds and certified by a Canadian bank
      listed in Schedule 1 to the Bank
      Act
      (Canada).

     

    1.9         
      Additional
      Rules of Interpretation.

     

    (1) Gender
      and Number.
      In this
      Agreement, unless the context requires otherwise, words in one gender include
      all genders and words in the singular include the plural and vice
      versa.

     

    (2) Headings
      and Table of Contents.
      The
      inclusion in this Agreement of headings of Articles and Sections and the
      provision of a table of contents are for convenience of reference only and
      are
      not intended to be full or precise descriptions of the text to which they
      refer.

     

    (3) Section
      References.
      Unless
      the context requires otherwise, references in this Agreement to Sections,
      Schedules or Exhibits are to Sections, Schedules or Exhibits of this
      Agreement.

     

    (4) Words
      of Inclusion.
      Wherever
      the words “include”, “includes” or “including” are used in this Agreement, they
      shall be deemed to be followed by the words “without limitation” and the words
      following “include”, “includes” or “including” shall not be considered to set
      forth an exhaustive list.

     

    (5) References
      to this Agreement.
      The
      words “hereof”, “herein”, “hereto”, “hereunder”, “hereby” and similar
      expressions shall be construed as referring to this Agreement in its entirety
      and not to any particular Section or portion of it.

     

    
      
         

      

      
        -
          14 -

        
          

        

      

      
         

      

    

    (6) Statute
      References.
      Unless
      otherwise indicated, all references in this Agreement to any statute include
      the
      regulations thereunder, in each case as amended, re-enacted, consolidated or
      replaced from time to time and in the case of any such amendment, re-enactment,
      consolidation or replacement, reference herein to a particular provision shall
      be read as referring to such amended, re-enacted, consolidated or replaced
      provision
      and also
      include, unless the context otherwise requires, all applicable guidelines,
      bulletins or policies made in connection therewith and which are legally
      binding.

     

    (7) Document
      References.
      All
      references herein to any agreement (including this Agreement), document or
      instrument mean such agreement, document or instrument as amended, supplemented,
      modified, varied, restated or replaced from time to time in accordance with
      the
      terms thereof and, unless otherwise specified therein, includes all schedules
      and exhibits attached thereto.

     

    1.10       
      Schedules
      and Exhibits.
      The
      following are the Schedules and Exhibits attached to and incorporated in this
      Agreement by reference and deemed to be a part hereof:

     

    
      	
              EXHIBITS

            	 
	
              A

            	
              Accounting
                Policies, Principles and Practices

            
	
              B

            	
              Allocation
                of Purchase Price

            
	
              C

            	
              Vendor’s
                and Merrimac’s Corporate Certificates

            
	
              D

            	
              Non-Competition
                Agreement

            
	
              E

            	
              Customer
                Agreement

            
	
              F

            	
              Teaming
                Agreement

            
	
              G

            	
              Transitional
                Services Agreement

            
	
              H

            	
              Opinion
                of Vendor’s Counsel

            
	
              I

            	
              Occupancy
                Agreement

            
	
              J

            	
              Purchaser’s
                Corporate Certificate

            
	
               

              SCHEDULES

            	 
	
              1.1

            	
              Excluded
                Personal Property

            
	
              1.2

            	
              Permitted
                Liens

            
	
              3.1(6)

            	
              Financial
                Statements

            
	
              3.1(8)

            	
              Brief
                Description of Purchased Assets and List of Jurisdictions of Location;
                List of Excluded Assets

            
	
              3.1
                (9)

            	
              Personal
                Property

            
	
              3.1
                (10)

            	
              Leased
                Premises

            
	
              3.1
                (11)

            	
              Personal
                Property Leases

            
	
              3.1
                (12)

            	
              Contracts
                and Excluded Contracts

            
	
              3.1
                (15)

            	
              Regulatory
                Approvals

            
	
              3.1
                (16)

            	
              Source
                Code Matters

            
	
              3.1
                (17)

            	
              Purchased
                Intellectual Property

            
	
              3.1
                (18)

            	
              Licences

            
	
              3.1
                (20)

            	
              Legal
                Proceedings

            

    

     

    
      
         

      

      
        -
          15 -

        
          

        

      

      
         

      

    

     

    
      	
              3.1
                (21)

            	
              Environmental
                Matters

            
	
              3.1
                (22)

            	
              Customers
                and Suppliers

            
	
              3.1
                (24)

            	
              Insurance
                Policies

            
	
              3.1(25)

            	
              December
                18, 2007 Balance

            
	
              3.1(28)

            	
              Material
                Adverse Changes

            
	
              4.5

            	
              Delayed
                Assets

            

    

    ____________________________________

     

    
      
         

      

      
        -
          16 -

        
          

        

      

      
         

      

    

     

    ARTICLE
      2

    PURCHASE
      OF ASSETS

     

    2.1         
      Purchase
      and Sale of Purchased Assets.
      Upon
      the terms and subject to the conditions of this Agreement, the Vendor hereby
      sells, assigns, conveys, transfers and delivers to the Purchaser, and the
      Purchaser hereby purchases, accepts and takes possession of and title to, all
      of
      the Vendor’s right, title and interest in and to all of the Purchased Assets
      effective as of the Closing Time on the Closing Date. The Purchaser and the
      Vendor expressly acknowledge and agree that the Purchased Assets shall not
      include and the Vendor is not selling, assigning, transferring, conveying or
      delivering to the Purchaser any of the Excluded Assets and all such Excluded
      Assets shall remain the property of the Vendor.

     

    2.2         
      Assumed
      Liabilities.
      At the
      Closing Time, on and subject to the terms and conditions of this Agreement,
      the
      Purchaser shall assume and agree to pay when due and perform and discharge
      in
      accordance with their terms, the Assumed Liabilities. Notwithstanding any other
      provision of this Agreement, the Purchaser and the Vendor expressly acknowledge
      and agree that the Purchaser shall not assume and shall have no liability for
      any Liabilities of the Vendor other than the Assumed Liabilities.
      The
      Retained Liabilities and any other Liabilities, other than the Assumed
      Liabilities, shall remain the sole responsibility of, and shall be retained,
      paid and performed solely by, the Vendor.

     

    2.3          Purchase
      Price.
      The
      consideration payable by the Purchaser to the Vendor for the Purchased Assets
      (the “Purchase
      Price”)
      shall
      be
      the aggregate of:

     

    
      	 	
              (a)

            	
              $1,450,000;
                and

            

    

     

    
      	 	
              (b)

            	
              the
                amount of the Assumed Liabilities.

            

    

     

    2.4         
      Payment
      of Purchase Price.
      The
      Purchase Price shall be paid and satisfied as follows:

     

    
      	 	
              (a)

            	
              an
                amount equal to $800,000 shall be paid by the Purchaser to the Vendor
                at
                Closing;

            

    

     

    
      	 	
              (b)

            	
              an
                amount equal to $650,000 shall be paid by the Purchaser to the Vendor
                on
                the date that is 49 calendar days after the Closing Date;
                and

            

    

     

    
      	 	
              (c)

            	
              an
                amount equal to the amount of the Assumed Liabilities shall be paid
                and
                satisfied by the assumption by the Purchaser of the Assumed Liabilities
                at
                Closing by the execution and delivery of this Agreement.
                

            

    

     

    2.5         
      Preparation
      of Closing Date Statements.

     

    (1) Draft
      Closing Date Statements.
      Promptly
      after the Closing Time, the Vendor shall prepare, at the Vendor’s expense, a
      draft of the Closing Date Statements, which shall be delivered to the Purchaser
      no later than the 30th calendar
      day following the Closing Date. 

     

    (2) Access
      to Records, etc.
      During
      the period from the Closing Date until the date of delivery of the draft Closing
      Date Statements, the Purchaser shall give the Vendor and its Representatives
      such assistance and access to the Books and Records as the Vendor and its
      Representatives may reasonably request in order to enable them to prepare the
      draft Closing Date Statements. The Purchaser’s Representatives shall be entitled
      to be present at inventory counts and other procedures used in the preparation
      of the draft Closing Date Statements (whether such counts are taken before
      or
      after Closing) and shall be provided promptly with copies of all working papers
      created by the Vendor and its Representatives in connection with such
      preparation.

     

    
      
         

      

      
        -
          17 -

        
          

        

      

      
         

      

    

    (3) Deemed
      Acceptance.
      If the
      Purchaser does not give a notice of objection in accordance with Section
2.6,
      the
      Purchaser shall be deemed to have accepted the draft Closing Date Statements
      prepared by the Vendor which shall be final and binding on the Parties and
      such
      draft Closing Date Statements shall constitute the Closing Date Statements
      for
      purposes of this Agreement immediately following the expiry date for the giving
      of such notice of objection.

     

    2.6         
      Dispute
      Settlement.
      If the
      Purchaser objects to any matter in the draft Closing Statement prepared pursuant
      to Section 2.5,
      then
      the Purchaser shall give notice to the Vendor no later than 3 calendar days
      after delivery of the draft Closing Date Statements. Any notice given by the
      Purchaser shall set forth in detail the particulars of such objection. The
      Parties shall then use reasonable efforts to resolve such objection for a period
      of 3 calendar days following the giving of such notice. If the matter is not
      resolved by the end of such 3 calendar day period, then the dispute with respect
      to such objection shall be submitted by the Parties to a chartered accountant
      associated with an accounting firm of recognized national standing in Canada,
      which is independent of the Parties (the “Independent
      Accountant”).
      If the
      Parties are unable to agree on the Independent Accountant within a further
      3
      calendar day period, either Party may apply under the Arbitration
      Act, 1991
      (Ontario) to have a court appoint the Independent Accountant. The Independent
      Accountant shall, as promptly as practicable (but in any event, within 10
      calendar days following its appointment), make a determination of the Closing
      Date Statements, based solely on written submissions of the Parties given by
      them to the Independent Accountant. The submissions of each Party shall be
      disclosed to the other Party and each other Party shall be afforded a reasonable
      opportunity to respond thereto. The Closing Date Statements as determined by
      the
      Independent Accountant shall be final and binding upon the Parties and shall
      constitute the Closing Date Statements for purposes of this Agreement. The
      Purchaser and the Vendor shall each pay one-half of the fees and expenses of
      the
      Independent Accountant.

     

    2.7         
      Allocation
      of Purchase Price.
      The
      Purchase Price shall be allocated among the Purchased Assets in the manner
      set
      forth in Exhibit B. The Purchaser and the Vendor shall report an allocation
      of
      the Purchase Price among the Purchased Assets in a manner entirely consistent
      with Exhibit B and shall not take any position inconsistent therewith in the
      preparation of financial statements, the filing of any Tax Returns or in the
      course of any audit by any Governmental Authority, Tax review or Tax proceeding
      relating to any Tax Returns.

     

    2.8         
      Section
      22 Tax Election.
      The
      Purchaser and the Vendor shall elect jointly in the prescribed form under
      section 22 of the Income Tax Act, section 184 of the Taxation
      Act
      (Québec), if applicable, and the corresponding provisions of any other
      applicable Tax statute as to the sale of the Receivables and designate in such
      election an amount equal to the portion of the Purchase Price allocated to
      the
      Receivables pursuant to Section 2.5.
      This
      election, or these elections, shall be made within the time prescribed for
      such
      elections.

     

    
      
         

      

      
        -
          18 -

        
          

        

      

      
         

      

    

    2.9         
      GST
      Election.
      At the
      Closing, the Vendor and the Purchaser shall execute jointly an election under
      section 167 of the Excise
      Tax Act
      (Canada)
      to have the sale of the Purchased Assets take place on a GST-free basis under
      Part IX of the Excise
      Tax Act
      (Canada)
      and the Purchaser shall file such election with its GST return for the reporting
      period in which the sale of the Purchased Assets takes place.

     

    2.10      
      Adjustment
      for Uncollected Receivables.
      The
      Purchaser shall use reasonable efforts to collect the Receivables for a period
      of 90 days after the Closing Date. The Purchaser may at its option exercisable
      by notice to the Vendor given at any time and from time to time in the period
      from the 90th day after the Closing Date until the first anniversary of the
      Closing Date reassign to the Vendor any Receivable not then fully collected
      by
      the Purchaser for a price equal to the full face value of such Receivable on
      the
      Closing Date less any amounts collected in respect thereof by the Purchaser
      and
      the Vendor shall accept and immediately pay for every such Receivable that
      the
      Purchaser elects to reassign in accordance with this Section 2.10.
      All
      such reassigned Receivables shall become the property of the Vendor, and the
      Purchaser shall deliver to the Vendor promptly after receipt thereof by the
      Purchaser any payments received by the Purchaser on account of any reassigned
      Receivable.

     

    2.11        Prepaid
      Income Tax Elections.

     

    (1) Subsection
      20(24) Tax Elections.
       The
      Purchaser and the Vendor shall, if applicable, jointly execute and file an
      election under subsection 20(24) of the Income Tax Act in the manner required
      by
      subsection 20(25) of the Income Tax Act and under the equivalent or
      corresponding provisions of any other applicable provincial or territorial
      statute, in the prescribed forms and within the time period permitted under
      the
      Income Tax Act and under any other applicable provincial or territorial statute,
      as to such amount paid by the Vendor to the Purchaser for assuming future
      obligations. In this regard, the Purchaser and the Vendor acknowledge that
      a
      portion of the Purchased Assets transferred by the Vendor pursuant to this
      Agreement and having a value equal to the amount elected under subsection 20(24)
      of the Income Tax Act and the equivalent provisions of any applicable provincial
      or territorial statute, is being transferred by the Vendor as a payment for
      the
      assumption of such future obligations by the Purchaser.

     

    (2) Other
      Tax Elections.
      The
      Purchaser and the Vendor shall also execute and deliver such other Tax elections
      and forms as they may mutually agree upon.

     

    2.12       Other
      Adjustments.
      The
      following shall apply:

     

    (1) General.
      Adjustments shall be made as of the Closing Date for prepaid rents (and interest
      accrued on them, if any), security deposits (and interest accrued on them,
      if
      any), realty taxes, local improvement rates and charges, water and assessment
      rates, utilities, fuel, licenses necessary for the operation of the Leased
      Premises and all other items normally adjusted between a vendor and purchaser
      in
      respect of the sale of property similar to the Leased Premises.

     

    (2) Closing
      Date.
      The
      Purchaser shall receive all income and pay all expenses in respect of the
      Purchased Assets for the Closing Date and the period thereafter.

     

    
      
         

      

      
        -
          19 -

        
          

        

      

      
         

      

    

    (3) Insurance.
      Insurance premiums shall not be adjusted as of the Closing Date, but insurance
      shall remain the responsibility of the Vendor until the Closing Date, and
      thereafter the Purchaser shall be responsible for placing its own insurance.
      Notwithstanding the foregoing, (i) the Vendor and Merrimac shall maintain
      insurance in respect of the Leased Premises and such insurance shall remain
      the
      responsibility of the Vendor and Merrimac until the end of the Technology
      Transfer Period; and (ii) the Vendor and Merrimac shall add the Purchaser as
      a
      beneficiary and loss payee of the insurance in respect of the Leased Premises
      for the Technology Transfer Period.

     

    ____________________________________

     

    
      
         

      

      
        -
          20 -

        
          

        

      

      
         

      

    

    ARTICLE
      3

    REPRESENTATIONS
      AND WARRANTIES

     

    3.1         
      Representations
      and Warranties of the Vendor and Merrimac.
      As a
      material inducement to the Purchaser’s entering into this Agreement and
      completing the transactions contemplated by this Agreement and acknowledging
      that the Purchaser is entering into this Agreement in reliance upon the
      representations and warranties of the Vendor and Merrimac set out in this
      Section 3.1,
      the
      Vendor and Merrimac jointly and severally represent and warrant to the Purchaser
      as follows:

     

    (1) Incorporation
      and Corporate Power of the Vendor and Merrimac.
      The
      Vendor and Merrimac are corporations incorporated, organized and subsisting
      under the laws of the jurisdictions of their incorporation. The Vendor has
      sent
      to the appropriate Person all annual returns and financial statements required
      to be sent under the laws of the jurisdictions of their incorporation. The
      Vendor and Merrimac have the corporate power, authority and capacity to execute
      and deliver this Agreement and all other agreements and instruments to be
      executed by them as contemplated herein and to perform their other obligations
      hereunder and under all such other agreements and instruments. The Vendor has
      the corporate power, authority and capacity to own and dispose of the Purchased
      Assets to the Purchaser. No act or proceeding has been taken or authorized
      by or
      against the Vendor and Merrimac by any other Person in connection with the
      dissolution, liquidation, winding up, bankruptcy or insolvency of the Vendor
      or
      Merrimac or with respect to any amalgamation, merger, consolidation, arrangement
      or reorganization of, or relating to, the Vendor or Merrimac and no such
      proceedings have been Threatened by any other Person.

     

    (2) Authorization
      by the Vendor and Merrimac.
      The
      execution and delivery of this Agreement and all other agreements and
      instruments to be executed by it as contemplated herein and the completion
      of
      the transactions contemplated hereby and thereby have been duly authorized
      by
      all necessary corporate action on the part of the Vendor and Merrimac and their
      respective shareholders.

     

    (3) Enforceability
      of Obligations.
      This
      Agreement constitutes a valid and binding obligation of the Vendor and Merrimac
      enforceable against the Vendor and Merrimac in accordance with its terms,
      subject to limitations on enforcement imposed by bankruptcy, insolvency,
      reorganization or other laws affecting the enforcement of the rights of
      creditors and others and to the extent that equitable remedies such as specific
      performance and injunctions are only available in the discretion of the court
      from which they are sought. The Vendor and Merrimac are not insolvent within
      the
      meaning of the Bankruptcy
      and Insolvency Act
      (Canada)
      and will not become insolvent as a result of the Closing. There is no Legal
      Proceeding in progress, pending, or Threatened against or affecting the Vendor
      or Merrimac or affecting the title of the Vendor to any of the Purchased Assets
      at law or in equity. There are no grounds on which any such Legal Proceeding
      might be commenced and there is no Order outstanding against or affecting the
      Vendor or Merrimac which, in any such case, affects adversely or might affect
      adversely the ability of the Vendor or Merrimac to enter into this Agreement
      or
      to perform their obligations hereunder.

     

    
      
         

      

      
        -
          21 -

        
          

        

      

      
         

      

    

    (4) Residence
      of the Vendor.
      The
      Vendor is not a non-resident of Canada for purposes of section 116 of the
Income
      Tax Act.

     

    (5) Qualification
      to do Business.
      The
      Vendor is registered, licensed or otherwise qualified to do business under
      the
      laws of the jurisdictions specified in Schedule 3.1(8) and neither the
      character nor the location of the properties and assets owned by the Vendor
      nor
      the nature of the Business requires registration, licensing or other
      qualification under the laws of any other jurisdiction. The Vendor has all
      necessary corporate power, authority, and capacity to carry on the Business
      and
      to own or lease and operate the Purchased Assets as now carried on and owned
      or
      leased and operated.

     

    (6) Financial
      Statements.
      The
      Financial Statements have been prepared in accordance with GAAP consistently
      applied throughout the periods to which they relate, subject, in the case of
      the
      Interim Financial Statements, to usual year-end adjustments and the exclusion
      of
      footnotes. The balance sheets contained in the Financial Statements fairly
      present the financial position of the Business as of their respective dates
      and
      the statements of earnings and retained earnings contained in the Financial
      Statements fairly present the revenues, earnings and results of operations
      for
      the periods indicated. The Financial Statements are accurate and complete in
      all
      material respects and are based upon and are consistent with the Books and
      Records.

     

    (7) Books
      and Records.
      The
      Vendor has made available to the Purchaser all Books and Records. All material
      financial transactions of the Business have been accurately recorded in the
      Financial Records in accordance with sound business and financial practice
      and
      the Financial Records accurately reflect the basis for the financial condition
      and the revenues, expenses and results of operations of the Business as of
      and
      to the date hereof. All Books and Records are in the full possession and
      exclusive control of, and are owned exclusively by, the Vendor and are not
      dependent upon any computerized or other system, program or device that is
      not
      exclusively owned and controlled by the Vendor.

     

    (8) Title
      to and Sufficiency of Purchased Assets.
      The
      Vendor has good and marketable legal and beneficial title to all of the
      Purchased Assets, free and clear of any and all Liens, except for Permitted
      Liens. The Purchased Assets constitute all of the property and assets used
      or
      held for use in connection with the Business and are sufficient to permit the
      continued operation of the Business in substantially the same manner as
      conducted in the year ended on the date of the most recent Annual Financial
      Statements. Schedule 3.1(8) sets out a complete and accurate list of all
      locations where the Purchased Assets are situate, including a brief description
      of the Purchased Assets situate at each location. There is no agreement, option
      or other right or privilege outstanding in favour of any Person for the purchase
      from the Vendor of the Business or of any of the Purchased Assets
      other
      than the purchase of Inventories in the Ordinary Course of
      Business.

     

    (9) Personal
      Property.
      Schedule 3.1(9) lists each item of Personal Property which had a book value
      in
      the Financial Records, at the date of the most recent Annual Financial
      Statements, of more than $5,000 or is otherwise material to the Business. Each
      item of Personal Property is in good operating condition and repair, ordinary
      wear and tear excepted, and is suitable and adequate for the purpose for which
      it has been designed.

     

    
      
         

      

      
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          22 -

        
          

        

      

      
         

      

    

    (10)  Leased
      Premises.

     

    
      	 	
              (a)

            	
              Schedule
                3.1(10) lists all of the Premises Leases and sets out, in respect
                of each
                Premises Lease: the municipal address and applicable unit or premises
                leased; the date of the Premises Lease and any amendments to it;
                the
                parties to the Premises Lease; the remaining term and any unexpired
                options to extend or renew; the current basic rent; and the amount
                of any
                prepaid rent, deposit and identification of any guarantee or indemnity
                or
                security given in respect of the Premises Lease; any current or future
                rent-free or reduced rent occupancy. The information set out in Schedule
                3.1(10) is true and complete.

            

    

     

    
      	 	
              (b)

            	
              Each
                Premises Lease is valid and subsisting, in full force and effect,
                unamended by oral or written agreement, and the Vendor is entitled
                to the
                full benefit and advantage of each Premises Lease in accordance with
                its
                terms. Each Premises Lease is in good standing and there has not
                been any
                default by any party under any Premises Lease nor is there any dispute
                between the Vendor and any landlord or tenant under any Premises
                Lease.

            

    

     

    
      	 	
              (c)

            	
              A
                full copy of each Premises Lease has been delivered to the Purchaser.
                There are no arrears of rent or other defaults under any Premises
                Lease
                nor are there any disputes between the parties
                thereto.

            

    

     

    
      	 	
              (d)

            	
              The
                current uses of each property subject to a Premises Lease comply
                with
                Applicable Law.

            

    

     

    (11) Personal
      Property Leases.
      Schedule 3.1(11) lists all the Personal Property Leases and identifies those
      which cannot be terminated by the Vendor without liability at any time upon
      less
      than 30 days’ notice or which involve payment by the Vendor in the future of
      more than $10,000. Each Personal Property Lease is in full force and effect
      and
      has not been amended, and the Vendor is entitled to the full benefit and
      advantage of each Personal Property Lease in accordance with its terms. Each
      Personal Property Lease is in good standing and there has not been any default
      by any party under any Personal Property Lease nor any dispute between the
      Vendor and any other party under any Personal Property Lease.

     

    (12) Contracts.
      Schedule
      3.1(12) lists or identifies all Contracts. Except as disclosed in Schedule
      3.1(12) the Vendor is not party to any Contract with any current or former
      director, officer or employee of the Vendor or with any Affiliate of the Vendor
      or other Related Person of the Vendor. Neither the Vendor nor any other party
      to
      any Contract is in default under any Contract and there has not occurred any
      event which, with the lapse of time or giving of notice or both, would
      constitute a default under any Contract by the Vendor or any other party to
      any
      Contract. Each Contract is in full force and effect, unamended by written or
      oral agreement, and the Vendor is entitled to the full benefit and advantage
      of
      each Contract in accordance with its terms. The Vendor has not received any
      notice of a default by the Vendor under any Contract or of a dispute between
      the
      Vendor and any other Person in respect of any Contract. Except as disclosed
      in
      Schedule 3.1(12), no Consent is required nor is any notice required to be given
      under any Contract by any party thereto or any other Person in connection with
      the completion of the transactions contemplated by this Agreement in order
      to
      allow the Purchaser to acquire all rights of the Vendor under such Contract.
      The
      completion of the transactions contemplated by this Agreement will not afford
      any party to any of the Leases or other Contracts or any other Person the right
      to terminate any Lease or other Contract nor will the completion of such
      transactions result in any additional or more onerous obligation on the
      Purchaser under any Lease or other Contract.

     

    
      
         

      

      
        -
          23 -

        
          

        

      

      
         

      

    

    (13) Receivables.
      All
      Receivables are recorded in the Financial Records and the Receivables are valid
      obligations which arose in the Ordinary Course of Business and are collectible,
      in the aggregate, at their full face value and are not subject to any set-off
      or
      counterclaim. 

     

    (14) Inventories.
      The
      Inventories consist of items that are current and of good and merchantable
      quality and not subject to any write-down or write-off. The portion of the
      Inventories consisting of finished products is saleable in the Ordinary Course
      of Business at normal prices. The portion of the Inventories consisting of
      raw
      materials and work-in-progress is of a quality useable in the production of
      finished products. Current Inventory levels are consistent with the level of
      Inventories that has been maintained in the operation of the Business prior
      to
      the date hereof in accordance with the operation of the Business in the Ordinary
      Course of Business. No items included in the Inventories are held by the Vendor
      on a consignment basis.

     

    (15) Regulatory
      Approvals.
      Except
      as set forth in Schedule 3.1(15), no Regulatory Approval or filing with, notice
      to, or waiver from any Governmental Authority is required to be obtained or
      made
      by the Vendor or Merrimac: (a) in connection with the execution and delivery
      of,
      and performance by the Vendor of its obligations under, this Agreement or the
      consummation of the transactions contemplated hereby; (b) to permit the
      Purchaser to carry on the Business after the Closing as the Business is
      currently carried on by the Vendor.

     

    (16) Computer
      Systems.

     

    
      	 	
              (a)

            	
              The
                Computer Systems adequately meet the data processing and other computing
                needs of the Business as presently conducted. The Computer Systems
                function, operate, process and compute in accordance with all Applicable
                Laws, industry standards and trade
                practices.

            

    

     

    
      	 	
              (b)

            	
              The
                Vendor has measures in place, consistent with current industry standards
                and practices, to ensure that the Computer Systems contain appropriate
                virus protection and security measures to safeguard against the
                unauthorized use, copying, disclosure, modification, theft or destruction
                of and access to, system programs and data files comprised by the
                Computer
                Systems. The Vendor has and maintains an accurate and confidential
                listing
                of all applicable accounts, passwords, encryption algorithms and
                programs
                or other access keys required to ensure secure and proper access
                by the
                Vendor and its Employees to the system programs and data files comprised
                by the Computer Systems. The data processing and data storage facilities
                used by the Vendor in connection with the operation of the Business
                are
                adequately and properly protected and consistent with current industry
                standards and practices.

            

    

     

    
      
         

      

      
        -
          24 -

        
          

        

      

      
         

      

    

     

    
      	 	
              (c)

            	
              The
                Vendor has and maintains back-up systems and disaster recovery and
                business continuity plans, consistent with current industry standards,
                to
                adequately and properly ensure the continuing availability of the
                functionality provided by the Computer Systems in the event of any
                malfunction of, or other form of disaster affecting, the Computer
                Systems.

            

    

     

    
      	 	
              (d)

            	
              The
                Vendor is, or at the Closing Time will be, in possession of (i) the
                object
                code and user manuals for all application software which is used
                in the
                Business; and the source code and all documentation required for
                effective
                use thereof, for all application software used in the Business, except
                that application software set out in Schedule 3.1(16). Except as
                set out
                in Schedule 3.1(16), as of the Closing Time, the source code for
                all
                application software set out in Schedule 3.1(16) will be held in
                escrow by
                third party escrow agents for the benefit of the Vendor, pursuant
                to the
                terms of written source code escrow agreements. The Vendor has furnished
                to the Purchaser true, correct and complete copies of all such source
                code
                escrow agreements.

            

    

     

    (17) Purchased
      Intellectual Property.

     

    
      	 	
              (a)

            	
              Schedule
                3.1(17) lists all of the registrations and applications for registration
                of the Purchased Intellectual Property included in the Purchased
                Intellectual Property. All of the registrations and applications
                for
                registration of the Purchased Intellectual Property are valid and
                subsisting, in good standing and are recorded in the name of the
                Vendor.
                No application for registration of any Purchased Intellectual Property
                has
                been rejected, withdrawn or
                opposed.

            

    

     

    
      	 	
              (b)

            	
              The
                Vendor is the first and only owner of the Purchased Intellectual
                Property
                and is entitled to the exclusive and uninterrupted use of the Purchased
                Intellectual Property without payment of any royalty or other fees.
                No
                Person has any right, title or interest in any of the Purchased
                Intellectual Property and all such Persons have waived their moral
                rights
                in any copyright works within the Purchased Intellectual Property.
                The
                Vendor has diligently protected its legal rights to the exclusive
                use of
                the Purchased Intellectual Property. The Vendor has maintained all
                registrations necessary or desirable to protect its rights in the
                Purchased Intellectual Property.

            

    

     

    
      	 	
              (c)

            	
              The
                list in Schedule 3.1(17) includes all Legal Proceedings relating to
                the Purchased Intellectual Property which are currently outstanding
                or
                Threatened.

            

    

     

    
      	 	
              (d)

            	
              The
                Employees and all consultants and independent contractors retained
                by the
                Vendor have agreed to maintain the confidentiality of confidential
                Purchased Intellectual Property and have provided waivers of all
                moral
                rights in copyright works included in the Purchased Intellectual
                Property.

            

    

     

    
      	 	
              (e)

            	
              All
                of the Vendor’s permissions and licences to use the Purchased Intellectual
                Property of other Persons (including software and computer programs)
                are
                disclosed in Schedule 3.1(17). The Vendor has not permitted or
                licensed any Person to use any of the Purchased Intellectual Property
                except as disclosed in Schedule 3.1(17).
                Each licence referred to in Schedule 3.1(17) is in full force and
                effect
                and neither the Vendor nor any
                licensor or licensee is in default of its obligations
                thereunder.

            

    

     

    
      
         

      

      
        -
          25 -

        
          

        

      

      
         

      

    

     

    
      	 	
              (f)

            	
              No
                Person has challenged the validity of any of the registrations or
                applications for registration of the Purchased Intellectual Property
                or
                the Vendor’s rights to any of the Purchased Intellectual
                Property.

            

    

     

    
      	 	
              (g)

            	
              To
                the knowledge of the Vendor, neither the use of the Purchased Intellectual
                Property nor the conduct of the Business has infringed or currently
                infringes upon the intellectual property rights of any other Person
                nor
                has the Vendor received any notice of infringement nor does the Vendor
                have knowledge of any facts that could reasonably be expected to
                form the
                basis of Legal Proceedings which could constitute a bona
                fide
                claim for infringement as such.

            

    

     

    
      	 	
              (h)

            	
              Except
                as set out in Schedule 3.1(17), to the knowledge of the Vendor no
                other Person has infringed the Vendor’s rights to the Purchased
                Intellectual Property, nor does the Vendor have knowledge of any
                facts
                that could form the basis for a claim of infringement. No licensee
                of any
                Purchased Intellectual Property has called on the Vendor to take
                proceedings for infringement pursuant to section 50 of the Trade-marks
                Act (Canada),
                nor does the Vendor have knowledge of any facts that could form the
                basis
                for a licensee to make such a call.

            

    

     

    
      	 	
              (i)

            	
              There
                is no prohibition or restriction on the use of the Purchased Intellectual
                Property by any Governmental Authority of which the Vendor has
                knowledge.

            

    

     

    (18) Licences
      and Compliance with Applicable Law.
      Schedule 3.1(18) lists all the Licences and identifies those that by their
      terms
      are not transferable. The Licences are the only licences, permits, approvals
      or
      evidences of authority of any Governmental Authority required for the operation
      of the Business and are held by the Vendor free and clear of any and all Liens.
      The Vendor is conducting the Business in accordance with all terms and
      conditions of the Licences and in compliance with Applicable Law. All the
      Licences are valid and are in full force and effect, the Vendor is not in
      violation of any term or provision or requirement of any Licence, and no Person
      has Threatened to revoke, amend or impose any condition in respect of, or
      commenced proceedings to revoke, amend or impose conditions in respect of,
      any
      Licence.

     

    (19) Absence
      of Conflicting Agreements.
      The
      execution, delivery and performance of this Agreement by the Vendor or Merrimac
      and the completion (with any required Consents and Regulatory Approvals and
      the
      giving of any required notices) of the transactions contemplated by this
      Agreement do not and will not result in or constitute any of the
      following:

     

    
      	 	
              (a)

            	
              a
                default, breach or violation or an event that, with notice or lapse
                of
                time or both, would be a default, breach or violation of any of the
                terms,
                conditions or provisions of the articles or by-laws of the Vendor
                or
                Merrimac or of any Contract;

            

    

     

    
      
         

      

      
        -
          26 -

        
          

        

      

      
         

      

    

     

    
      	 	
              (b)

            	
              an
                event which, pursuant to the terms of any Contract, would cause any
                right
                or interest of the Vendor to come to an end or be amended in any
                way that
                is detrimental to the Business or entitle any other Person to terminate
                or
                amend any such right or interest or relieve any other Person of its
                obligations thereunder;

            

    

     

    
      	 	
              (c)

            	
              the
                creation or imposition of any Lien on any of the Purchased Assets;
                or

            

    

     

    
      	 	
              (d)

            	
              the
                violation of any Applicable Law.

            

    

     

    (20) Legal
      Proceedings.
      Except
      as set forth and described in Schedule 3.1(20), there is no Legal Proceeding
      in
      progress, pending or Threatened against or affecting the Vendor, the Business
      or
      any of the Purchased Assets or title thereto, nor is there any factual or legal
      basis on which any such Legal Proceeding might be commenced. There is no Order
      outstanding against or affecting the Vendor, the Business or any of the
      Purchased Assets. Without limiting the generality of the foregoing, except
      as
      set forth and described in Schedule 3.1(20), there is no Legal Proceeding
      involving any product liability claim in progress, pending or Threatened against
      or affecting the Business or the Purchased Assets alleging any defect in, or
      failure to warn concerning any risks or damages inherent in, the design or
      manufacture of or the materials used in any of the products manufactured or
      distributed by or for the Vendor.

     

    (21) Environmental
      Matters.

     

    
      	 	
              (a)

            	
              The
                Business and the Purchased Assets as carried on or used by the Vendor
                and
                its predecessors (including the condition of the Leased Premises
                and the
                waters on or under the Leased Premises) have been carried on and
                used and
                are currently carried on and used in compliance with all Environmental
                Laws.

            

    

     

    
      	 	
              (b)

            	
              The
                Vendor and its predecessors have not used any of the Purchased Assets,
                or
                permitted them to be used, to generate, manufacture, refine, treat,
                transport, store, handle, dispose of, transfer, produce or process
                any
                Hazardous Substance except in compliance with all Environmental Laws.
                In
                particular, no part of the Leased Premises or the Purchased Assets
                contains a Hazardous Substance which exceeds an applicable soil,
                groundwater or other environmental, health or safety criterion or
                standard
                published or enacted by a Governmental Authority having jurisdiction
                over
                the Leased Premises or the Purchased
                Assets.

            

    

     

    
      	 	
              (c)

            	
              The
                Vendor is not, and has not been, subject to any Legal Proceedings
                (i) investigating or alleging the violation or possible violation of
                any Environmental Law in connection with the Business or the Purchased
                Assets or (ii) to determine whether any study or remedial action
                is
                required to respond to a Release or the presence of a Hazardous Substance
                on the Leased Premises or the Purchased
                Assets.

            

    

     

    
      	 	
              (d)

            	
              The
                Environmental Permits listed in Schedule 3.1(21) constitute all
                Environmental Permits which are required for the operation of the
                Business
                or the Purchased Assets, including any machinery, equipment or facility
                included in the Purchased Assets. The Environmental Permits presently
                held
                by the Vendor is valid and in full force and effect, and no violations
                thereof have been experienced, noted or recorded, and no Legal Proceedings
                are pending or Threatened, to revoke or limit any of
                them.

            

    

     

    
      
         

      

      
        -
          27 -

        
          

        

      

      
         

      

    

     

    
      	 	
              (e)

            	
              There
                are no Legal Proceedings in progress, pending or Threatened in which
                it is
                alleged that the Vendor or any predecessor of the Vendor or any Employee
                or any director or officer or former Employee or former director
                or
                officer of the Vendor or agent or any other Person for whom the Vendor
                is
                responsible is liable for a domestic or foreign federal, provincial,
                state, municipal or local clean-up or remediation of lands contaminated
                with Hazardous Substances or for any other remedial or corrective
                action
                under an Environmental Law nor is there any factual or legal basis
                on
                which any such Legal Proceedings might be
                commenced.

            

    

     

    
      	 	
              (f)

            	
              There
                are no circumstances that could reasonably be expected to give rise
                to any
                Legal Proceeding or create any obligation or liability in respect
                of (i)
                the Release or presence of a Hazardous Substance on any Leased Premises
                or
                other Purchased Assets or on land where the Vendor has disposed or
                arranged for the disposal of materials arising from the conduct of
                the
                Business or (ii) the violation of any Environmental Law by the Vendor,
                its
                Employees, agents or others for whom they are responsible in relation
                to
                the Business.

            

    

     

    
      	 	
              (g)

            	
              All
                Hazardous Substances disposed of, treated or stored on lands owned
                or
                occupied by the Vendor or its predecessors or off-site of such lands,
                have
                been disposed of, treated and stored in compliance with all Environmental
                Laws and no part of the Leased Premises or other Purchased Assets
                contains
                a Hazardous Substance which exceeds an applicable soil, groundwater
                or
                other criterion or standard prescribed by an environmental authority
                or
                agency having jurisdiction over the Leased Premises or other Purchased
                Assets, whether or not such criterion or standard constitutes
                Environmental Law.

            

    

     

    
      	 	
              (h)

            	
              The
                Vendor and its predecessors have maintained all environmental and
                operating documents and records Related to the Business in the manner
                and
                for the time periods required by any Environmental Law and have never
                conducted an environmental audit of the Business or any of the Purchased
                Assets. For purposes of this paragraph (h), an environmental audit
                includes any evaluation, assessment, review or study performed at
                the
                request of or on behalf of the Vendor, a prospective purchaser of
                the
                Business or the Purchased Assets or a Governmental Authority, whether
                formally requisitioned or otherwise
                prepared.

            

    

     

    
      	 	
              (i)

            	
              There
                are no underground storage tanks, pits, lagoons, waste disposal sites,
                above-ground storage tanks or materials or other assets containing
                asbestos or polychlorinated biphenyls located on the Leased
                Premises.

            

    

     

    (22) Customers
      and Suppliers.
      Schedule 3.1(22) lists the 10 largest customers and the 10 largest suppliers
      of
      the Business (or such additional customers or suppliers of the Business which
      are sufficient to constitute 10 per cent or more of total sales or purchases,
      as
      the case may be) for the last 12-month period ending immediately before the
      date
      of this Agreement. The Vendor is not aware of, nor has the Vendor received
      notice of, any intention on the part of any such customer or supplier to cease
      doing business with the Vendor or to modify or change in any material manner
      any
      existing arrangement with the Vendor for the purchase or supply of any products
      or services to the Business. The relationships of the Vendor with each of its
      principal suppliers, shippers and customers in respect of the Business are
      satisfactory, and there are no unresolved disputes with any such supplier,
      shipper or customer.

     

    
      
         

      

      
        -
          28 -

        
          

        

      

      
         

      

    

    (23) Products
      and Services.
      The
      products produced by the Business have been manufactured in accordance with,
      and
      meet all requirements of, Applicable Law and meet the specifications in all
      Contracts with customers of the Business relating to the sale of such products.
      Without limiting the generality of this Section 3.1(23), there are no
      claims against the Vendor pursuant to any product warranty or with respect
      to
      the production, distribution or sale of defective or inferior products or with
      respect to any warnings or instructions concerning such products. All services
      provided by the Vendor to the customers of the Business have been provided
      in
      accordance with Applicable Law and the terms of all Contracts relating thereto.
      The Vendor is not in breach of the terms of any Contract relating to the supply
      of products or services or any instrument ancillary thereto.

     

    (24) Insurance.

     

    
      	 	
              (a)

            	
              The
                Vendor maintains fire (with extended risk and casualty coverage),
                general
                liability, business interruption, product liability, use and occupancy
                and
                other forms of insurance with reputable and sound insurers covering
                the
                Purchased Assets and protecting the Business in such amounts and
                against
                such losses and claims as are generally maintained for comparable
                businesses and properties. Schedule 3.1(24)
                sets forth and describes all insurance policies currently maintained
                by
                the Vendor in respect of the Business or the Purchased Assets, including
                a
                brief description of the type of insurance, the name of the insurer,
                policy number, coverage limits, amount of deductible, expiration
                date and
                annual premiums. Each of such insurance policies is valid and subsisting
                and in good standing, there is no default thereunder and the Vendor
                is
                entitled to all rights and benefits
                thereunder.

            

    

     

    
      	 	
              (b)

            	
              Schedule
                3.1(23) sets forth and describes all pending claims under any of
                such
                insurance policies and identifies the most recent inspection reports,
                if
                any, received from insurance underwriters as to the condition or
                insurance
                value of the insured property and assets, copies of which have been
                made
                available to the Purchaser. The Vendor has not failed to give any
                notice
                or present any claim under any of such insurance policies in due
                and
                timely fashion. There are no circumstances which might entitle the
                Vendor
                to make a claim under any of such insurance policies or which might
                be
                required under any of such insurance policies to be notified to the
                insurers and no claim under any of such insurance policies has been
                made
                by the Vendor since December
                31, 2006.

            

    

     

    
      	 	
              (c)

            	
              None
                of such insurance policies is subject to any special or unusual terms
                or
                restrictions or provides for a premium in excess of the stipulated
                or
                normal rate. No notice of cancellation or non-renewal with respect
                to, nor
                disallowance of any claim under, any of such insurance policies has
                been
                received by the Vendor. To the knowledge of the Vendor, there are
                no
                circumstances or occurrences which would or might form the basis
                of a
                material increase in premiums for the current insurance coverage
                maintained by the Vendor.

            

    

     

    
      
         

      

      
        -
          29 -

        
          

        

      

      
         

      

    

     

    
      	 	
              (d)

            	
              The
                Purchaser has been added as a beneficiary and loss payee of the insurance
                in respect of the Leased Premises for the Technology Transfer
                Period.

            

    

     

    (25) December
      18, 2007 Balance.
      Since
      December 18, 2007, the Vendor has not made any payments to Merrimac in any
      amount. Attached hereto as Schedule 3.1(25) is the cash advance balance from
      Merrimac to the Vendor as of December 18, 2007. Any amounts paid since December
      18, 2007, from the Vendor have only been to independent third party suppliers
      of
      the Vendor and such payments have been made in the Ordinary Course of Business,
      and not to Merrimac for any reason. Merrimac agrees that it shall have no claim
      against any of the Purchased Assets.

     

    (26) Sales
      Tax Returns. 
      The
      Vendor has filed all Tax Returns required to be filed by it so as to prevent
      any
      valid Lien (other than a Permitted Lien) of any nature on the Purchased Assets
      and has paid all Taxes relating to the Business which have been due with respect
      to the periods covered by such Tax Returns, or pursuant to any assessment
      received in connection therewith.

     

    (27) GST.
      The
      Purchased Assets constitute all or substantially all of the property that can
      reasonably be regarded as being necessary for the Purchaser to be capable of
      carrying on the Business. The Vendor is registered for GST under Part IX of
      the
Excise
      Tax Act
      (Canada)
      and the Vendor’s GST registration number is 10179 6662 RT0001.

     

    (28) No
      Material Adverse Change.
      Since
      the date of the most recent Interim Financial Statements, except as otherwise
      disclosed herein, including for greater certainty, the continuing deterioration
      of the Vendor’s financial condition and related decrease in cash, liquidity and
      resources, there has been no Material Adverse Change and, to the knowledge
      of
      the Vendor and Merrimac, no event has occurred nor do any circumstances exist
      which could result in a Material Adverse Change.

     

    (29) Absence
      of Certain Changes or Events.
      Since
      the date of the most recent Annual Financial Statements, the Vendor has carried
      on the Business in the Ordinary Course of Business and, in particular, but
      without limitation, has not:

     

    
      	 	
              (a)

            	
              mortgaged,
                pledged, granted a security interest in or otherwise created a Lien
                on any
                of the Purchased Assets, except in the Ordinary Course of Business
                and in
                amounts which, individually and in the aggregate are not material
                to the
                financial condition or operation of the
                Business;

            

    

     

    
      	 	
              (b)

            	
              entered
                into any contract or any other transaction that was not in the Ordinary
                Course of Business;

            

    

     

    
      
         

      

      
        -
          30 -

        
          

        

      

      
         

      

    

     

    
      	 	
              (c)

            	
              revalued
                or disposed of any of the Purchased Assets except for sales of Inventory
                in the Ordinary Course of Business other than as has been disclosed
                in the
                financial statements of Merrimac which have been filed with the Securities
                and Exchange Commission; 

            

    

     

    
      	 	
              (d)

            	
              terminated,
                cancelled, modified or amended in any material respect or received
                notice
                or a request for termination, cancellation, modification or amendment
                of
                any Contract or taken or failed to take any action that would entitle
                any
                party to a Contract to terminate, modify, cancel or amend any Material
                Contract;

            

    

     

    
      	 	
              (e)

            	
              in
                respect of the Business, made any capital expenditure or authorized
                any
                capital expenditure or made any commitment for the purchase, construction
                or improvement of any capital assets except in the Ordinary Course
                of
                Business;

            

    

     

    
      	 	
              (f)

            	
              made
                any change in its accounting principles, policies, practices or
                methods;

            

    

     

    
      	 	
              (g)

            	
              entered
                into any Contract or commitment to hire, or terminated the services
                of,
                any officer or senior management employee with responsibilities for
                matters Related to the Business; or

            

    

     

    
      	 	
              (h)

            	
              agreed,
                committed or entered into any understanding to take any actions enumerated
                in paragraphs (a)
                to
                (g)
                of
                this Section 3.1(29).

            

    

     

    (30) Full
      Disclosure.
      The
      Vendor and Merrimac have disclosed to the Purchaser all information relating
      to
      the Business and the Purchased Assets that would reasonably be expected to
      be
      material to a purchaser of the Business and/or the Purchased
      Assets.

     

    (31) Workplace
      Safety and Insurance Act (Ontario).
      All
      current assessments and other amounts or premiums owed under the Workplace
      Safety and Insurance Act (Ontario) and all similar legislation in other
      jurisdictions, in relation to the Vendor, have been paid or accrued and the
      Vendor has not been subject to any special or penalty assessment or other amount
      or premium under such legislation which has not been paid, except for the sum
      of
      $252.19, which the Vendor will pay and satisfy on Closing.

     

    3.2         
      Representations
      and Warranties of the Purchaser.
      The
      Purchaser represents and warrants to the Vendor and Merrimac as
      follows:

     

    (1) Incorporation
      and Corporate Power.
      The
      Purchaser is a corporation incorporated, organized and subsisting under the
      laws
      of the jurisdiction of its incorporation. The Purchaser has the corporate power,
      authority and capacity to execute and deliver this Agreement and all other
      agreements and instruments to be executed by it as contemplated herein and
      to
      perform its obligations under this Agreement and under all such other agreements
      and instruments.

     

    (2) Authorization
      by Purchaser.
      The
      execution and delivery of this Agreement and all other agreements and
      instruments to be executed by it as contemplated herein and the completion
      of
      the transactions contemplated by this Agreement and all such other agreements
      and instruments have been duly authorized by all necessary corporate action
      on
      the part of the Purchaser.

     

    
      
         

      

      
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          31 -

        
          

        

      

      
         

      

    

    (3) Enforceability
      of Obligations.
      This
      Agreement constitutes a valid and binding obligation of the Purchaser
      enforceable against the Purchaser in accordance with its terms.

     

    (4) Investment
      Canada Act.
      The
      Purchaser is not a “non-Canadian” within the meaning of the ICA.

     

    (5) Excise
      Tax Act.
      The
      Purchaser is registered under Part IX of the Excise
      Tax Act (Canada)
      and its registration number is 102320512 RT0001.

     

    3.3         Commissions.
      Each
      Party represents and warrants to the other Party that such other Party will
      not
      be liable for any brokerage commission, finder’s fee or other similar payment in
      connection with the transactions contemplated by this Agreement because of
      any
      action taken by, or agreement or understanding reached by, that
      Party.

     

    3.4         
      No
      Waiver.
      No
      investigations, inspections, surveys or tests made by or on behalf of the
      Purchaser at any time shall affect, mitigate, waive, diminish the scope of
      or
      otherwise affect any representation or warranty made by the Vendor in or
      pursuant to this Agreement.

     

    ____________________________________

     

    
      
         

      

      
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          32 -

        
          

        

      

      
         

      

    

     

    ARTICLE
      4

    CLOSING
      ARRANGEMENTS

     

    4.1        
       Closing.
      The
      Closing shall take place at 10:00 a.m. on the Closing Date at the offices of
      the
      Purchaser’s Counsel in Toronto, Ontario, or at such other time on the Closing
      Date or such other place as may be agreed orally or in writing by the Vendor,
      Merrimac and the Purchaser.

     

    4.2         
      Vendor’s
      Closing Deliveries.
      At the
      Closing, the Vendor and Merrimac shall deliver or cause to be delivered to
      the
      Purchaser the following documents:

     

    
      	 	
              (a)

            	
              all
                keys, entry devices and passcodes with respect to the Purchased Assets
                including combinations to any locks or
                vaults;

            

    

     

    
      	 	
              (b)

            	
              original
                copies of the Leases and other Contracts and all files and correspondence
                relating to them;

            

    

     

    
      	 	
              (c)

            	
              certificate
                of a senior officer of the Vendor dated as of the Closing Date in
                the form
                of Exhibit C;

            

    

     

    
      	 	
              (d)

            	
              a
                certificate of a senior officer of Merrimac dated as of the Closing
                Date
                in the form of Exhibit C;

            

    

     

    
      	 	
              (e)

            	
              evidence
                in form satisfactory to the Purchaser acting reasonably that the
                Consents
                and Regulatory Approvals have been
                obtained;

            

    

     

    
      	 	
              (f)

            	
              evidence
                in form satisfactory to the Purchaser that any security interests
                mortgages, charges, security agreements, guarantees, liens and other
                encumbrances upon the Purchased Assets in favour of the Bank of Nova
                Scotia or any other similar security interests mortgages, charges,
                security agreements, guarantees, liens and other encumbrances upon
                the
                Purchased Assets as the Purchaser may reasonably request, have been
                released, terminated and
                discharged;

            

    

     

    
      	 	
              (g)

            	
              a
                duplicate copy of the Clearance
                Certificates;

            

    

     

    
      	 	
              (h)

            	
              the
                elections referred to in Sections 2.8,
                2.9
                and 2.11;

            

    

     

    
      	 	
              (i)

            	
              evidence
                satisfactory to the Purchaser that the bulk sales legislation in
                each of
                the jurisdictions in which the Purchased Assets are located has been
                complied with or that the sale of the Purchased Assets is exempt
                from
                compliance with such legislation;

            

    

     

    
      	 	
              (j)

            	
              evidence
                satisfactory to the Purchaser that the Purchaser has been added as
                a
                beneficiary and loss payee to the insurance in respect of the Leased
                Premises for the Technology Transfer
                Period;

            

    

     

    
      	 	
              (k)

            	
              evidence
                satisfactory to the Purchaser that both Brad Bourne and Joe Ricci
                have
                been added as signatories to all of the Vendor’s bank
                accounts;

            

    

     

    
      
         

      

      
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          33 -

        
          

        

      

      
         

      

    

     

    
      	 	
              (l)

            	
              a
                purchase certificate in form satisfactory to the Purchaser from the
                Workplace Safety and Insurance
                Board;

            

    

     

    
      	 	
              (m)

            	
              a
                non-competition agreement substantially in the form of Exhibit D,
                duly
                executed by the Vendor and
                Merrimac;

            

    

     

    
      	 	
              (n)

            	
              a
                customer agreement between the Purchaser and Merrimac in the form
                of
                Exhibit E, whereby Merrimac shall commit to (i) continue to place
                existing
                work at Filtran with the Purchaser; (ii) provide the Purchaser with
                between US$600,000 and US$800,000 of annual business, provided that
                the
                Purchaser meets mutually agreed upon quality, delivery and price
                metrics;
                and (iii) provide the Purchaser with internal costs for parts that
                are
                built in-house by Merrimac and historical prices for parts bought
                from
                outside suppliers; 

            

    

     

    
      	 	
              (o)

            	
              a
                teaming agreement between the Purchaser and Merrimac in the Form
                of
                Exhibit F whereby Merrimac shall partner with the Purchaser for the
                EQ 36
                Program;

            

    

     

    
      	 	
              (p)

            	
              a
                Transitional Services Agreement in the form of Exhibit
                G;

            

    

     

    
      	 	
              (q)

            	
              an
                opinion of Vendor’s Counsel in respect of (i) the Vendor and (ii) Merrimac
                in respect of the enforceability of this Agreement and the ancillary
                agreements to this Agreement, substantially in the form of Exhibit
                H;

            

    

     

    
      	 	
              (r)

            	
              the
                Occupancy Agreement in the form of Exhibit I;
                and

            

    

     

    
      	 	
              (s)

            	
              all
                such other assurances, consents, agreements, documents and instruments
                as
                may be reasonably required by the Purchaser to complete the transactions
                provided for in this Agreement, all of which shall be in form and
                substance satisfactory to the Purchaser, acting
                reasonably.

            

    

     

    4.3          Purchaser’s
      Closing Deliveries.
      At the
      Closing, the Purchaser shall deliver or cause to be delivered to the Vendor
      and
      Merrimac the following documents and payments:

     

    
      	 	
              (a)

            	
              a
                non-competition agreement substantially in the form of Exhibit D,
                duly
                executed by the Vendor and
                Merrimac;

            

    

     

    
      	 	
              (b)

            	
              a
                customer agreement between the Purchaser and Merrimac in the form
                of
                Exhibit E, whereby Merrimac shall commit to (i) continue to place
                existing
                work at Filtran with the Purchaser; (ii) provide the Purchaser with
                between US$600,000 and US$800,000 of annual business, provided that
                the
                Purchaser meets mutually agreed upon quality, delivery and price
                metrics;
                and (iii) provide the Purchaser with internal costs for parts that
                are
                built in-house by Merrimac and historical prices for parts bought
                from
                outside suppliers; 

            

    

     

    
      	 	
              (c)

            	
              a
                teaming agreement between the Purchaser and Merrimac in the Form
                of
                Exhibit F whereby Merrimac shall partner with the Purchaser for the
                EQ 36
                Program;

            

    

     

    
      	 	
              (d)

            	
              a
                Transitional Services Agreement in the form of Exhibit
                G;

            

    

     

    
      
         

      

      
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          34 -

        
          

        

      

      
         

      

    

     

    
      	 	
              (e)

            	
              the
                Occupancy Agreement in the form of Exhibit
                I;

            

    

     

    
      	 	
              (f)

            	
              certificate
                of a senior officer of the Purchaser dated as of the Closing Date
                in the
                form of Exhibit J;

            

    

     

    
      	 	
              (g)

            	
              the
                payment referred to in Section 2.4(a);

            

    

     

    
      	 	
              (h)

            	
              the
                elections referred to in Sections 2.8,
                2.9
                and 2.11;
                and

            

    

     

    
      	 	
              (i)

            	
              all
                such other assurances, consents, agreements, documents and instruments
                as
                may be reasonably required by the Vendor and Merrimac to complete
                the
                transactions provided for in this Agreement, all of which shall be
                in form
                and substance satisfactory to the Vendor and Merrimac, acting
                reasonably.

            

    

     

    4.4          Possession.
      On the
      Closing Date, the Vendor shall deliver or cause to be delivered to the Purchaser
      possession of the Purchased Assets.

     

    4.5         
      Delayed
      Transfer Assets.
      To the
      extent that any Purchased Asset or any claim, right or benefit arising under
      or
      resulting from such Purchased Asset is not capable of being transferred without
      the approval, consent or waiver of any third Person, or if the transfer of
      any
      Purchased Asset would constitute a breach of any obligation under, or a
      violation of, any Applicable Law unless the approval, consent or waiver of
      such
      third Person is obtained (all such Purchased Assets being collectively referred
      to in this Agreement as “Delayed
      Transfer Assets”),
      except
      as otherwise expressly provided in this Agreement and without limiting the
      rights and remedies of the Purchaser contained elsewhere in this Agreement,
      this
      Agreement shall not constitute an agreement to transfer any Delayed Transfer
      Asset unless and until such approval, consent or waiver has been obtained.
      Schedule 4.5 lists all of the Delayed Transfer Assets. After the Closing and
      until all such Delayed Transfer Assets are transferred to the Purchaser, the
      Vendor and Merrimac shall: 

     

    
      	 	
              (a)

            	
              maintain
                its existence and hold the Delayed Transfer Assets in trust for the
                Purchaser;

            

    

     

    
      	 	
              (b)

            	
              comply
                with the terms and provisions of or relating to the Delayed Transfer
                Assets as agent for the Purchaser at the Purchaser’s cost and for the
                Purchaser’s benefit;

            

    

     

    
      	 	
              (c)

            	
              co-operate
                with the Purchaser in any reasonable and lawful arrangements designed
                to
                provide the benefits of the Delayed Transfer Assets to the Purchaser;
                and

            

    

     

    
      	 	
              (d)

            	
              enforce,
                at the request of the Purchaser and at the expense and for the account
                of
                the Purchaser, any rights of the Vendor under or arising from the
                Delayed
                Transfer Assets against any third Person, including the right to
                elect to
                terminate any such rights in accordance with the terms of such rights
                upon
                the written direction of the
                Purchaser.

            

    

     

    
      
         

      

      
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          35 -

        
          

        

      

      
         

      

    

    In
      order
      that the full value of the Delayed Transfer Assets may be realized for the
      benefit of the Purchaser, the Vendor shall, at the request and expense and
      under
      the direction of the Purchaser, in the name of the Vendor or otherwise as the
      Purchaser may specify, take all such action and do or cause to be done all
      such
      things as are, in the opinion of the Purchaser, necessary or proper in order
      that the obligations of the Vendor under such Delayed Transfer Assets may be
      performed in such manner that the value of such Delayed Transfer Assets is
      preserved and enures to the benefit of the Purchaser, and that any moneys due
      and payable and to become due and payable to the Purchaser in and under such
      Delayed Transfer Assets are received by the Purchaser. The Vendor shall promptly
      pay to the Purchaser all moneys collected by or paid to the Vendor in respect
      of
      every such Delayed Transfer Asset. 

     

    4.6         Vendor
      and Merrimac Covenant.
      Merrimac
      and the Vendor agree that an authorized signing officer of the Vendor shall
      immediately endorse all cheques and other instruments relating to the Purchased
      Assets which are received after the Closing Date to the Purchaser in favour
      of
      the Purchaser and provide such cheques or other instruments to the Purchaser
      within one business day of receipt.
      The
      Vendor and Merrimac shall reasonably cooperate with the Purchaser with respect
      to the preparation of any audited historical or pro forma financial statements
      of Purchaser or the Business as may be required under the rules of the Toronto
      Stock Exchange, Ontario Securities Commission or other applicable securities
      commissions in connection with the transaction contemplated hereby, including,
      by way of example and not limitation, execution of management representation
      letters to the auditors with respect to the conduct of the Business prior to
      Closing.

     

    ARTICLE
      5

    SURVIVAL
      AND INDEMNIFICATION 

     

    5.1         
      Survival.
      Subject
      to the provisions of this Article 5, all provisions of this Agreement and of
      any
      other agreement, certificate or instrument delivered pursuant to this Agreement
      shall not merge on Closing but shall survive the execution, delivery and
      performance of this Agreement, the Closing and the execution and delivery of
      any
      transfer documents or other documents of title to the Purchased Assets and
      all
      other agreements, certificates and instruments delivered pursuant to this
      Agreement and the payment of the consideration for the Purchased
      Assets. 

     

    5.2         
      Obligation
      of Merrimac.
      Merrimac agrees to perform all obligations of the Vendor at the time of and
      after the Closing Date pursuant to this Agreement and all ancillary agreements
      hereto, including, without limitation the Transitional Services Agreement,
      in
      the event that the Vendor is unable to perform such obligations for any reason
      including, without limitation, if the Vendor is dissolved, wound-up or subject
      to similar proceedings. 

     

    5.3         
      Indemnity
      by the Vendor and Merrimac.
      The
      Vendor and Merrimac shall jointly and severally indemnify the Purchaser’s
      Indemnified Parties and save them fully harmless against, and will reimburse
      or
      compensate them for, any Damages arising from, in connection with or related
      in
      any manner whatever to:

     

    
      	 	
              (a)

            	
              any
                incorrectness in or breach of any representation or warranty of the
                Vendor
                or Merrimac contained in this Agreement or in any other agreement,
                certificate or instrument executed and delivered pursuant to this
                Agreement;

            

    

     

    
      
         

      

      
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          36 -

        
          

        

      

      
         

      

    

     

    
      	 	
              (b)

            	
              any
                breach or any non-fulfilment of any covenant or agreement on the
                part of
                the Vendor or Merrimac contained in this Agreement or in any other
                agreement, certificate or instrument executed and delivered pursuant
                to
                this Agreement;

            

    

     

    
      	 	
              (c)

            	
              any
                Liability arising from the ownership or operation of the Business
                or the
                Purchased Assets prior to the Closing Date, other than a Liability
                that is
                an Assumed Liability;

            

    

     

    
      	 	
              (d)

            	
              any
                non-compliance by the Vendor with the provisions of any bulk sales
                legislation in any jurisdiction where any of the Purchased Assets
                are
                located except
                as such non-compliance may have been consented to by the Purchaser
                in
                writing.

            

    

     

    
      	 	
              (e)

            	
              defects
                or deficiencies in any product or component thereof manufactured
                or
                distributed/any services provided by the Vendor, in whole or in part,
                prior to the Closing Date;

            

    

     

    
      	 	
              (f)

            	
              any
                Legal Proceeding to which the Vendor is a party at any time on or
                prior to
                the Closing Date, or to which it becomes a party after the Closing
                Date
                arising from facts or circumstances that existed at any time on or
                prior
                to the Closing Date including any Legal Proceeding disclosed in Schedule
                3.1(20);

            

    

     

    
      	 	
              (g)

            	
              any
                breach or alleged breach of any Contract or Lease by the Vendor which
                occurred prior to the Closing Date or any such breach which occurs
                after
                the Closing Date but arises out of a continuation of a course of
                conduct
                which commenced prior to the Closing Date, including any Contract
                disclosed in Schedule 3.1(14);

            

    

     

    
      	 	
              (h)

            	
              the
                Retained Liabilities;
                and

            

    

     

    
      	 	
              (i)

            	
              any
                breach or alleged breach of the Vendor in respect of its obligations
                under
                or in respect of the Pension Plans or
                Employee Plans;

            

    

     

    and,
      for
      greater certainty and without limiting the generality of the provisions of
      Sections 5.3(a)
      and (b),
      the indemnity provided for in this Section 5.3
      shall
      extend to any Damages arising from any act, omission or state of facts of the
      Vendor or Merrimac that occurred or existed prior to the Closing Time, and
      whether or not disclosed in any Schedule to this Agreement. The rights to
      indemnification of the Purchaser’s Indemnified Parties under this Section
5.3
      shall
      apply notwithstanding any inspection or inquiries made by or on behalf of any
      of
      the Purchaser’s Indemnified Parties, or any knowledge acquired or capable of
      being acquired by any of the Purchaser’s Indemnified Parties or facts actually
      known to any of the Purchaser’s Indemnified Parties (whether before or after the
      execution and delivery of this Agreement and whether before or after Closing).
      The waiver of any condition based upon the accuracy of any representation and
      warranty or the performance of any covenant shall not affect the right to
      indemnification, reimbursement or other remedy based upon such representation,
      warranty or covenant.

     

    
      
         

      

      
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          37 -

        
          

        

      

      
         

      

    

    5.4         
      Indemnity
      by Merrimac.
      Merrimac
      shall indemnify the Purchaser’s Indemnified Parties and save them fully harmless
      against, and will reimburse or compensate them for, any Damages arising from,
      in
      connection with or related in any manner whatever to any Liability or Damages
      or
      claim arising in the event that (i) the transaction is challenged, reviewed,
      scrutinized or investigated by a trustee in bankruptcy or any creditor of the
      Vendor; (ii) any claim is made against the Purchaser by a trustee in bankruptcy
      or any creditor of the Vendor; (iii)  the transaction is voided; (iv) a
      claim is made against the Purchaser relating to, or in respect of, the
      non-compliance of the Vendor with the provisions of the Bulk
      Sales Act
      (Ontario) or any other applicable bulk sales legislation, unless such
      non-compliance is consented to by the Purchaser in writing; or (v) a claim
      is
      made by a creditor of the Vendor that the sale transaction contemplated by
      this
      Agreement did not conform or comply in any way with the requirements of the
      Bulk
      Sales Act
      (Ontario) or any other applicable bulk sales legislation, unless such
      non-compliance is consented to by the Purchaser in writing, whether or not
      any
      claim under (i) to (v) is ultimately proven to be well-founded. 

     

    5.5         
      Indemnity
      by the Purchaser.
      The
      Purchaser shall indemnify the Vendor’s Indemnified Parties and save them fully
      harmless against, and will reimburse or compensate them for, any Damages arising
      from, in connection with or related in any manner whatever to:

     

    
      	 	
              (a)

            	
              any
                incorrectness in or breach of any representation or warranty of the
                Purchaser contained in this Agreement or in any other agreement,
                certificate or instrument executed and delivered pursuant to this
                Agreement;

            

    

     

    
      	 	
              (b)

            	
              any
                breach or non-fulfilment of any covenant or agreement on the part
                of the
                Purchaser contained in this Agreement or in any other agreement,
                certificate or instrument executed and delivered pursuant to this
                Agreement;

            

    

     

    
      	 	
              (c)

            	
              any
                action taken by the Vendor or Merrimac pursuant to Section 4.5
                of
                this Agreement under or in respect of any Delayed Transfer Asset;
                and

            

    

     

    
      	 	
              (d)

            	
              the
                Assumed Liabilities.

            

    

     

    5.6         
      Notice
      of Claim.
      If an
      Indemnified Party becomes aware of any act, omission or state of facts that
      may
      give rise to Damages in respect of which a right of indemnification is provided
      for under this Article
      5,
      the
      Indemnified Party shall promptly give written notice thereof (a “Notice
      of Claim”)
      to the
      Indemnifying Party. Such notice shall specify whether the potential Damages
      arise as a result of a claim by a Person against the Indemnified Party (a
“Third
      Party Claim”)
      or
      whether the potential Damages do not so arise (a “Direct
      Claim”),
      and
      shall also specify with reasonable particularity (to the extent that the
      information is available):

     

    
      	 	
              (a)

            	
              the
                factual basis for the Direct Claim or Third Party Claim, as the case
                may
                be; and

            

    

     

    
      	 	
              (b)

            	
              the
                amount of the potential Damages arising therefrom, if
                known.

            

    

     

    
      
         

      

      
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          38 -

        
          

        

      

      
         

      

    

    If,
      through the fault of the Indemnified Party, the Indemnifying Party does not
      receive notice of a particular claim in time effectively to contest the
      determination of any liability susceptible of being contested or to assert
      a
      right to recover an amount under applicable insurance coverage, then the
      liability of the Indemnifying Party to the Indemnified Party under this Article
      5 shall be reduced to the extent that Damages are incurred by the Indemnifying
      Party resulting from the Indemnified Party’s failure to give such notice on a
      timely basis. Nothing in this Section 5.6
      shall be
      construed to affect the time within which a Notice of Claim must be delivered
      pursuant to Sections 5.7(1)
      and
5.7(2)
      in order
      to permit recovery pursuant to Section 5.3(a)
      or
5.5(a)
      as the
      case may be.

     

    5.7         
      Time
      Limits for Delivery of Notice of Claim for Breach of Representations and
      Warranties.

     

    (1) Notice
      by the Purchaser.
      No
      Damages may be recovered from the Vendor or Merrimac pursuant to Section
5.3(a)
      unless a
      Notice of Claim is delivered by the Purchaser on or before the date that is
      2
      years after closing with respect with
      respect to the representations and warranties in Sections 3.1,
      and
      elsewhere under this Agreement. Unless a Notice of Claim has been given on
      or
      before the date set out above with respect to each particular representation
      and
      warranty, the Vendor and Merrimac shall be released on such date from all
      obligations in respect of that particular representation and warranty and from
      the obligation to indemnify the Purchaser’s Indemnified Parties in respect
      thereof pursuant to Section 5.3(a).
      This
      Section 5.7(1)
      shall
      not be construed to impose any time limit on the Purchaser’s right to assert a
      claim to recover Damages under Sections 5.3(b)
      whether
      or not the basis on which such a claim is asserted could also entitle the
      Purchaser to make a claim for Damages pursuant to Section 5.3(a).

     

    (2) Notice
      by the Vendor or Merrimac.
      No
      Damages may be recovered from the Purchaser pursuant to Section 5.5(a)
      unless a
      Notice of Claim is delivered by the Vendor or Merrimac on or before date that
      is
      2 years after Closing.
      Unless a
      Notice of Claim has been given on or before date that is 2 years after Closing
      with respect to each particular representation and warranty, the Purchaser
      shall
      be released on date that is 2 years after Closing from all obligations in
      respect of that particular representation and warranty and from the obligation
      to indemnify the Vendor’s Indemnified Parties in respect thereof pursuant to
      Section 5.5(a).
      This
      Section 5.7(2)
      shall
      not be construed to impose any time limit on the Vendor’s and Merrimac’s right
      to assert a claim to recover Damages under Sections 5.5(b)
      through
(d),
      whether
      or not the basis on which such a claim is asserted could also entitle the Vendor
      and Merrimac to make a claim for Damages pursuant to Section 5.5(a).

     

    5.8         
      Monetary
      Limits on Damages for Breach of Representations and
      Warranties.

     

    
      	 	
              (a)

            	
              No
                Damages may be recovered from the Vendor or Merrimac pursuant to
                paragraph
                5.3(a)
                unless and until the accumulated aggregate amount of Damages of the
                Purchaser’s Indemnified Parties arising pursuant to Section 5.3(a)
                exceeds $50,000, in which event the accumulated aggregate amount
                of all
                such Damages may be recovered. Such limitation shall have no application
                to any claim to recover Damages based on any incorrectness in or
                breach of
                any representation or warranty of the Vendor and Merrimac in Sections
                3.1
                (2), (3), (8), (9), (10), (11), (12), (13), (14), (18), (21), (22),
                (26)
                 and (27) of this Agreement, nor shall it be construed to apply to
                any of
                the indemnities in Sections 5.3(b)
                to
                5.3(i)
                and Section 5.4.

            

    

     

    
      
         

      

      
        -
          39 -

        
          

        

      

      
         

      

    

     

    
      	 	
              (b)

            	
              No
                Damages may be recovered from the Purchaser pursuant to Section
                5.5(a)
                unless and until the accumulated aggregate amount of Damages of the
                Vendor’s Indemnified Parties arising pursuant to Section 5.5(a)
                exceeds $50,000 in which event the accumulated aggregate amount of
                all
                such Damages may be recovered. Such limitation shall have no application
                to any claim to recover Damages based on any incorrectness in or
                breach of
                any representation or warranty of the Purchaser in Sections 3.2(2)
                and (3) of this Agreement, nor shall it be construed to apply to
                any of
                the indemnities in Sections 5.5(a)
                to
                5.5(d).

            

    

     

    5.9         
      Direct
      Claims.
      In the
      case of a Direct Claim, the Indemnifying Party shall have 60 days from receipt
      of notice thereof within which to make such investigation as the Indemnifying
      Party considers necessary or desirable. For the purpose of such investigation,
      the Indemnified Party shall make available to the Indemnifying Party the
      information relied upon by the Indemnified Party to substantiate its right
      to be
      indemnified under this Article
      5,
      together with all such other information as the Indemnifying Party may
      reasonably request. If the Parties fail to agree at or before the expiration
      of
      such 60 day period (or any mutually agreed upon extension thereof), the
      Indemnified Party shall be free to pursue such remedies as may be available
      to
      it.

     

    5.10        Third
      Party Claims.
      In the
      case of a Third Party Claim, the provisions in the following paragraphs of
      this
      Section 5.10
      apply.

     

    
      	 	
              (a)

            	
              The
                Indemnifying Party shall have the right, at its expense, to participate
                in
                but not control the negotiation, settlement or defence of the Third
                Party
                Claim, which control shall rest at all times with the Indemnified
                Party,
                unless the Indemnifying Party:

            

    

     

    
      	 	
              (i)

            	
              irrevocably
                acknowledges in writing complete responsibility for, and agrees to
                indemnify the Indemnified Party in respect of, the Third Party Claim;
                and

            

    

     

    
      	 	
              (ii)

            	
              furnishes
                evidence to the Indemnified Party which is satisfactory to the Indemnified
                Party acting reasonably of its financial ability to indemnify the
                Indemnified Party;

            

    

     

    in
      which
      case the Indemnifying Party may assume such control at its expense through
      counsel of its choice.

     

    
      	 	
              (b)

            	
              If
                the Indemnifying Party elects to assume control as contemplated in
                Section 5.10(a),
                the Indemnifying Party shall reimburse the Indemnified Party for
                all of
                the Indemnified Party’s out-of-pocket expenses incurred as a result of
                such participation or assumption. The Indemnified Party shall continue
                to
                have the right to participate in the negotiation, settlement or defence
                of
                such Third Party Claim and to retain counsel to act on its behalf,
                provided that the fees and disbursements of such counsel shall be
                paid by
                the Indemnified Party unless the Indemnifying Party consents to the
                retention of such counsel at its expense or unless the named parties
                to
                any action or proceeding include both the Indemnifying Party and
                the
                Indemnified Party and a representation of both the Indemnifying Party
                and
                the Indemnified Party by the same counsel would be inappropriate
                due to
                the actual or potential differing interests between them (such as
                the
                availability of different defences), in which case the fees and
                disbursements of such counsel shall be paid by the Indemnifying Party.
                The
                Indemnified Party shall co-operate with the Indemnifying Party so
                as to
                permit the Indemnifying Party to conduct such negotiation, settlement
                and
                defence and for this purpose shall preserve all relevant documents
                in
                relation to the Third Party Claim, allow the Indemnifying Party access
                on
                reasonable notice to inspect and take copies of all such documents
                and
                require its personnel to provide such statements as the Indemnifying
                Party
                may reasonably require and to attend and give evidence at any trial
                or
                hearing in respect of the Third Party
                Claim.

            

    

     

    
      
         

      

      
        -
          40 -

        
          

        

      

      
         

      

    

     

    
      	 	
              (c)

            	
              If,
                having elected to assume control of the negotiation, settlement or
                defence
                of the Third Party Claim, the Indemnifying Party thereafter fails
                to
                conduct such negotiation, settlement or defence with reasonable diligence,
                then the Indemnified Party shall be entitled to assume such control
                and
                the Indemnifying Party shall be bound by the results obtained by
                the
                Indemnified Party with respect to such Third Party
                Claim.

            

    

     

    
      	 	
              (d)

            	
              If
                any Third Party Claim is of a nature such that (i) the Indemnified
                Party
                is required by Applicable Law or any Order, or (ii) it is necessary
                in the
                reasonable view of the Indemnified Party acting in good faith and
                in a
                manner consistent with reasonable commercial practices, in respect
                of (A)
                a Third Party Claim by a customer relating to products or services
                supplied by the Business or (B) a Third Party Claim relating to any
                Contract which is necessary to the ongoing operations of the Business
                or
                any material part thereof in order to avoid material damage to the
                relationship between the Indemnified Party and any of its major customers
                or to preserve the rights of the Indemnified Party under such an
                essential
                Contract, to make a payment to any Person (a “Third
                Party”)
                with respect to the Third Party Claim before the completion of settlement
                negotiations or related legal proceedings, as the case may be, then
                the
                Indemnified Party may make such payment and the Indemnifying Party
                shall,
                promptly after demand by the Indemnified Party, reimburse the Indemnified
                Party for such payment. If the amount of any liability of the Indemnified
                Party under the Third Party Claim in respect of which such a payment
                was
                made, as finally determined, is less than the amount which was paid
                by the
                Indemnifying Party to the Indemnified Party, the Indemnified Party
                shall,
                promptly after receipt of the difference from the Third Party, pay
                the
                amount of such difference to the Indemnifying
                Party.

            

    

     

    
      	 	
              (e)

            	
              If
                the Indemnifying Party fails to assume control of the defence of
                any Third
                Party Claim, the Indemnified Party shall have the exclusive right
                to
                contest, settle or pay the amount claimed and the Indemnifying Party
                shall
                be bound by the results obtained by the Indemnified Party with respect
                to
                such Third Party Claim. Whether or not the Indemnifying Party assumes
                control of the negotiation, settlement or defence of any Third Party
                Claim, the Indemnifying Party shall not settle any Third Party Claim
                without the written consent of the Indemnified Party, which consent
                shall
                not be unreasonably withheld or
                delayed.

            

    

     

    
      
         

      

      
        -
          41 -

        
          

        

      

      
         

      

    

    5.11       
      Interest
      on Damages.
      The
      amount of any Damages which is subject to indemnification hereunder shall bear
      interest from and including the date the Indemnified Party was notified of
      the
      claim for Damages at the Prime Rate calculated from and including such date
      to
      but excluding the date reimbursement of such Damages by the Indemnifying Party
      is made, compounded monthly, and the amount of such interest shall be deemed
      to
      be part of such Damages.

     

    5.12      
      Set-off.
      The
      Purchaser shall be entitled to set off the amount of any Damages subject to
      indemnification under this Agreement against any other amounts payable by the
      Purchaser to the Vendor whether under this Agreement or otherwise,
      provided that the following mandatory procedures shall apply:

     

    
      	 	
              (a)

            	
              The
                Parties agree that they shall use reasonable efforts to settle
                disagreements arising in connection with this Section 5.12.
                

            

    

     

    
      	 	
              (b)

            	
              If
                those attempts fail after a period of ten (10) days from the time
                of
                set-off, then every such disagreement shall be referred to arbitration
                in
                Toronto, Ontario, and conducted in accordance with the provisions
                of the
                Arbitration
                Act
                1991, S.O. 1991, c. 17. 

            

    

     

    
      	 	
              (c)

            	
              The
                decision of the arbitrator shall be rendered within thirty (30) days
                of
                the submission of the matter to the arbitrator and therefore all
                parties
                shall act expeditiously in this regard.

            

    

     

    
      	 	
              (d)

            	
              The
                fees of the arbitrator shall be borne equally by the Parties, provided
                that the prevailing party shall be entitled to an award of reasonable
                legal fees incurred in connection with the arbitration in such amount
                as
                determined by the arbitrator.

            

    

     

    
      	 	
              (e)

            	
              The
                decision of the arbitrator shall be final and binding and no appeal
                shall
                lie therefrom and the award of the arbitrator shall be enforceable
                in a
                court of competent jurisdiction. 

            

    

     

    5.13       
      Limitation
      on Amount of Damages.
      Notwithstanding any other term of this Agreement, the maximum aggregate
      liability of the Vendor and Merrimac under this Agreement, including this
      Article 5, for breaches of covenants, representations or warranties made under
      this Agreement or any other agreement contemplated herein, shall be the amount
      actually paid by the Purchaser to the Vendor under this Agreement under sections
      2.4(a), (b) and (d) hereof. In addition, the indemnity provided by the Vendor
      and Merrimac to the Purchaser in this Article 5 shall be the sole liability
      of
      the Vendor and Merrimac under this Agreement.

     

    ____________________________________

     

    
      
         

      

      
        -
          42 -

        
          

        

      

      
         

      

    

    ARTICLE
      6

    TECHNOLOGY
      TRANSFER PERIOD

     

    6.1         
      Technology
      Transfer Period. During
      the Technology Transfer Period and pursuant to (i) a transitional services
      agreement amongst the Purchaser, the Vendor and Merrimac, dated the date hereof
      (the “Transitional
      Services Agreement”);
      and
      (ii) an occupancy licence in respect of the Leased Premises amongst the Vendor
      and the Purchaser which shall terminate at the end of the Technology Transfer
      Period (the “Occupancy
      Agreement”):

     

    
      	 	
              (a)

            	
              the
                Purchaser shall operate the Business at the Leased
                Premises;

            

    

     

    
      	 	
              (b)

            	
              Merrimac
                shall work with the Purchaser to facilitate the transfer of the Business
                and the customers of the Vendor to the
                Purchaser;

            

    

     

    
      	 	
              (c)

            	
              Merrimac
                shall assist the Purchaser to close any bids made by the Vendor or
                jointly
                made by the Vendor and Merrimac in
                October and November of 2007;

            

    

     

    
      	 	
              (d)

            	
              Merrimac
                shall pay any outstanding amounts owing to Rogers Corporation on
                the date
                that is 49 days after the Closing Date and, in the event that Merrimac
                does not pay such outstanding amounts on the date that is 49 days
                after
                the Closing Date, the Purchaser shall deduct such amounts from the
                amount
                due to the Vendor pursuant to Section 2.4(b) of this Agreement;
                

            

    

     

    
      	 	
              (e)

            	
              the
                Purchaser shall pay a service fee to Merrimac;

            

    

     

    
      	 	
              (f)

            	
              Scot
                Gilbert shall assist the Purchaser pursuant to reasonable requests
                of the
                Purchaser at the Leased Premises with the transfer of the Business
                and
                Merrimac and the Vendor shall be responsible for any fees or other
                amounts
                payable in respect of such services;
                and

            

    

     

    
      	 	
              (g)

            	
              the
                Purchaser shall provide the Vendor with access during all reasonable
                times
                to the Books and Records during the Technology Transfer
                Period.

            

    

     

    For
      greater certainty, the Vendor and Merrimac shall (i) remain responsible for
      the
      Employees, including but not limited to the Employees’ salaries and benefits,
      during the Technology Transfer Period; and (ii) provide notice of termination
      to
      the Employees to be effective at the end of the Technology Transfer
      Period.

     

    ____________________________________

     

     

    
      
         

      

      
        -
          43 -

        
          

        

      

      
         

      

    

     

    ARTICLE
      7

    GENERAL

     

    7.1         
      Expenses.
      Except
      as otherwise expressly provided herein, each Party shall be responsible for
      all
      costs and expenses (including any Taxes imposed on such expenses) incurred
      by it
      in connection with the negotiation, preparation, execution, delivery and
      performance of this Agreement and the transactions contemplated by this
      Agreement (including the fees and disbursements of legal counsel, bankers,
      investment bankers, accountants, brokers and other advisers).

     

    7.2         
      Payment
      of Taxes.
      Except
      as otherwise provided in this Agreement, the Purchaser shall pay all Taxes
      applicable to, or resulting from the transactions contemplated by, this
      Agreement (other than Taxes payable by the Vendor under Applicable Law) and
      any
      filing, registration, recording or transfer fees payable in connection with
      the
      instruments of transfer provided for in this Agreement.

     

    7.3         
      Public
      Announcements.
      Except
      to the extent otherwise required by Applicable Law or with the prior consent
      of
      the other Party, neither Party shall make any public announcement regarding
      this
      Agreement or the transactions contemplated by this Agreement.
      Notwithstanding anything to the contrary herein the Vendor and Merrimac hereby
      consent to a copy of this agreement being filed with the Ontario Securities
      Commission and other applicable securities commissions if, in the view of the
      Purchaser, such filing is required by Applicable Law.

     

    7.4         
      Notices.

     

    (1) Mode
      of Giving Notice.
      Any
      notice, direction, certificate, consent, determination or other communication
      required or permitted to be given or made under this Agreement shall be in
      writing and shall be effectively given and made if (i) delivered
      personally, (ii) sent by prepaid courier service or mail, or
      (iii) sent prepaid by fax or other similar means of electronic
      communication, in each case to the applicable address set out
      below:

     

    
      	 	
              (a)

            	
              if
                to the Vendor or Merrimac, to:

            

    

     

    MERRIMAC
      INDUSTRIES INC.

    Attention: 
      Robert
      V.
      Condon

    Address:   
      41
      Fairfield Place

                        West
      Caldwell, NJ 07006 USA

    Fax:            
      (973)
      882.5981

    

    
      
         

      

      
        -
          44 -

        
          

        

      

      
         

      

    

    with
      a
      copy to:

     

    LABARGE
      WEINSTEIN

    Attention:
       Lawrence
      Weinstein

    Address:   
      515
      Legget Drive, Suite 800 

    Kanata,
      ON K2K 3G4

    Fax:           
      (613)
      599.0018

    

     

    
      	 	
              (b)

            	
              if
                to the Purchaser, to:

            

    

     

    FIRAN
      TECHNOLOGY GROUP CORPORATION

    Attention:
       Brad
      Bourne

    Address:     250
      Finchdene Square

     Scarborough,
      ON 

     M1X
      1A5

    Fax:             
      (416)
      299.1140

    

     

    with
      a
      copy to:

     

    

    BLAKE,
      CASSELS & GRAYDON LLP

    Attention: Eric
      Moncik

    Address:  199
      Bay
      Street, Suite 2800

    Commerce
      Court West

    Toronto,
      ON M5L 1A9

    Fax:            
      (416)
      863.2653

     

    

    (2) Deemed
      Delivery of Notice.
      Any such
      communication so given or made shall be deemed to have been given or made and
      to
      have been received on the day of delivery if delivered, or on the day of faxing
      or sending by other means of recorded electronic communication, provided that
      such day in either event is a Business Day and the communication is so
      delivered, faxed or sent before 4:30 p.m. on such day. Otherwise, such
      communication shall be deemed to have been given and made and to have been
      received on the next following Business Day. Any such communication sent by
      mail
      shall be deemed to have been given and made and to have been received on the
      fifth Business Day following the mailing thereof; provided however that no
      such
      communication shall be mailed during any actual or apprehended disruption of
      postal services. Any such communication given or made in any other manner shall
      be deemed to have been given or made and to have been received only upon actual
      receipt.

     

    (3) Change
      of Address.
      Any
      Party may from time to time change its address under this Section 7.4
      by
      notice to the other Party given in the manner provided by this Section
7.4.

     

    7.5         
      Time
      of Essence.
      Time
      shall be of the essence of this Agreement in all respects.

     

    
      
         

      

      
        -
          45 -

        
          

        

      

      
         

      

    

    7.6         
      Further
      Assurances.
      Each
      Party shall from time to time promptly execute and deliver or cause to be
      executed and delivered all such further documents and instruments and shall
      do
      or cause to be done all such further acts and things in connection with this
      Agreement that the other Party may reasonably
      require as being necessary or desirable in order to effectively carry out or
      better evidence or perfect the full intent and meaning of this Agreement or
      any
      provision hereof.

     

    7.7          Co-operation
      in Filing of Returns.
      The
      Purchaser agrees to provide to the Vendor all reasonable co-operation following
      the Closing Date in connection with the filing of income tax returns of the
      Vendor in respect of which the Books and Records delivered to the Purchaser
      pursuant to this Agreement are relevant.

     

    7.8         
      Entire
      Agreement.
      This
      Agreement constitutes the entire agreement between the Parties pertaining to
      the
      subject matter of this Agreement and supersedes all prior agreements,
      understandings, negotiations and discussions, whether oral or written. There
      are
      no conditions, representations, warranties, obligations or other agreements
      between the Parties in connection with the subject matter of this Agreement
      (whether oral or written, express or implied, statutory or otherwise) except
      or
      explicitly set out in this Agreement or in the agreements referred to in
      Sections 4.2(j), (k), (l) and (m) and 4.3(c), (d) and (e).

     

    7.9         
      Amendment.
      No
      amendment of this Agreement shall be effective unless made in writing and signed
      by the Parties.

     

    7.10      
      Waiver.
      A
      waiver of any default, breach or non-compliance under this Agreement shall
      not
      be effective unless in writing and signed by the Party to be bound by the
      waiver. No waiver shall be inferred from or implied by any failure to act or
      delay in acting by a Party in respect of any default, breach or non-observance
      or by anything done or omitted to be done by the other Party. The waiver by
      a
      Party of any default, breach or non-compliance under this Agreement will not
      operate as a waiver of that Party’s rights under this Agreement in respect of
      any continuing or subsequent default, breach or non-observance (whether of
      the
      same or any other nature).

     

    7.11       
      Severability.
      Any
      provision of this Agreement which is prohibited or unenforceable in any
      jurisdiction will, as to that jurisdiction, be ineffective to the extent of
      such
      prohibition or unenforceability and will be severed from the balance of this
      Agreement, all without affecting the remaining provisions of this Agreement
      or
      affecting the validity or enforceability of such provision in any other
      jurisdiction.

     

    7.12       
      Remedies
      Cumulative.
      The
      rights, remedies, powers and privileges herein provided to a Party are
      cumulative and in addition to and not exclusive of or in substitution for any
      rights, remedies, powers and privileges otherwise available to that
      Party.

     

    7.13      
      Attornment.
      Each
      Party agrees (i) that any action or proceeding relating to this Agreement may
      (but need not) be brought in any court of competent jurisdiction in the Province
      of Ontario, and for that purpose now irrevocably and unconditionally attorns
      and
      submits to the jurisdiction of such Ontario court; (ii) that it irrevocably
      waives any right to, and will not, oppose any such Ontario action or proceeding
      on any jurisdictional basis, including forum
      non conveniens;
      and
      (iii) not to oppose the enforcement against it in any other jurisdiction of
      any
      judgment or order duly obtained from an Ontario court as contemplated by this
      Section 7.13.
      Each of
      the Vendor, Merrimac and the Purchaser irrevocably appoints the following
      Persons as its agent to receive on its behalf service of summons and any other
      legal process which may be served in any action, suit or
      proceeding:

     

    
      
         

      

      
        -
          46 -

        
          

        

      

      
         

      

    

    For
      the
      Purchaser: 

     

    BLAKE,
      CASSELS & GRAYDON LLP

    Attention: Eric
      Moncik

    Address:  
      199
      Bay
      Street, Suite 2800

    Commerce
      Court West

    Toronto,
      ON M5L 1A9

    Fax:
      (416) 863.2653

     

    with
      a
      copy to:

     

    FIRAN
      TECHNOLOGY GROUP CORPORATION

    Attention:
       Brad
      Bourne

    Address:    250
      Finchdene Square

    Scarborough,
      ON 

    M1X
      1A5

    Fax:            
      (416)
      299.1140

    

    For
      the
      Vendor:

     

    LABARGE
      WEINSTEIN

    Attention:
       Lawrence
      Weinstein

    Address:   
      515
      Legget Drive, Suite 800 

    Kanata,
      ON K2K 3G4

    Fax:
      (613) 599.0018

    

    with
      a
      copy to:

     

    MERRIMAC
      INDUSTRIES INC.

    Attention: 
      Robert
      V.
      Condon

    Address:   
      41
      Fairfield Place

    West
      Caldwell, NJ 07006 USA

    Fax:            
      (973)
      882.5981

    

    Such
      service may be made by mailing or delivering a copy of such process to the
      applicable party in care of its agent at the address given in this Section
      7.13
      and each
      of the Parties hereby irrevocably authorizes and directs the respective agents
      to accept such service on their behalf. If and to the extent that such service
      and any summons or other legal process cannot for any reason be effected upon
      the applicable agent as in this Agreement provided, each of the Parties further
      irrevocably consents to the service of any and all legal process in any such
      action, suit or proceeding by the mailing of copies of such process in the
      manner specified in Section 7.4.
      Nothing
      in this Section 7.13
      shall
      affect the rights of the Parties to serve legal process in any other manner
      permitted by Applicable Law.

     

    
      
         

      

      
        -
          47 -

        
          

        

      

      
         

      

    

    7.14      
      Governing
      Law.
      This
      Agreement shall be governed by and construed in accordance with the laws of
      the
      Province of Ontario and the laws of Canada applicable in such Province and
      this
      Agreement shall be treated, in all respects, as an Ontario
      contract.

     

    7.15       Successors
      and Assigns.
      This
      Agreement shall enure to the benefit of, and be binding on, the Parties and
      their respective successors and permitted assigns. Neither Party may assign
      or
      transfer, whether absolutely, by way of security or otherwise, all or any part
      of its respective rights or obligations under this Agreement without the prior
      written consent of the other Party.

     

    7.16       Counterparts.
      This
      Agreement may be executed in counterparts, each of which shall be deemed to
      be
      an original and both of which taken together shall be deemed to constitute
      one
      and the same instrument. To evidence its execution of an original counterpart
      of
      this Agreement, a Party may send a copy of its original signature on the
      execution page hereof to the other Party by facsimile transmission and such
      transmission shall constitute delivery of an executed copy of this Agreement
      to
      the receiving Party.

     

    7.17       Language.
      The
      Parties have required that this Agreement and all deeds, documents and notices
      relating to this Agreement be drawn up in the English language. Les parties
      aux
      présentes ont exigé que le présent contrat et tous autres contrats, documents ou
      avis afférents aux présentes soient rédigés en langue anglaise.

     

    ____________________________________

     

    
      
         

      

      
        -
          48 -

        
          

        

      

      
         

      

    

    IN
      WITNESS WHEREOF the Parties have executed this Agreement as of the date first
      above written.

     

    
      	 	 	 
	 	
              FILTRAN
                MICROCIRCUITS INC.

            
	 
 	 
 	 
 
	 	By:  	/s/ Robert
              V.
              Condon
	 	
              
Name:
              Robert V. Condon
	 	
              Title:
                Vice President

            

    

     

    
      	 	 	 
	 	
              MERRIMAC
                INDUSTRIES, INC.

            
	 
 	 
 	 
 
	 	By:  	/s/ Reynold
              K. Green
	 	
              

              Name:
                Reynold K. Green

            
	 	
              Title:
                President and Chief Operating
                Officer

            

    

     

    
      	 	 	 
	 	
              FIRAN
                TECHNOLOGY GROUP CORPORATION

            
	 
 	 
 	 
 
	 	By:  	/s/ Brad
              Bourne
	 	
              

              Name:
                Brad Bourne

            
	 	
              Title:
                President and Chief Executive
                Officer

            

    

     

    
      
         

      

      
        -
          49 -

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