Document:

EMPLOYMENT AGREEMENT

      EMPLOYMENT AGREEMENT,  dated as of December 29, 2004, by and between IMAGE
INNOVATIONS  HOLDINGS INC., a Nevada  corporation,  having a principal  place of
business at 432 Park Avenue South, New York, New York 10022 (the "Company"), and
Derick  G  Sinclair  having  a  residence  address  at 1550  Ostler  Crt,  North
Vancouver, BC, Canada, V7G2P1 (the "Executive").

                                    RECITALS

      WHEREAS, the Company desires to employ the Executive to render services to
the Company as an executive  officer,  and the Executive  desires to render such
services on behalf of the Company; and

      WHEREAS,  the Company and the Executive  desire to set forth the terms and
conditions  on  which  (i) the  Company  will  employ  the  Executive,  (ii) the
Executive  will render  services to the  Company  and any other  corporation  or
business  entity  controlling,  controlled  by or under common  control with the
Company  (each,  an  "Affiliate"),  and (iii) the Company  will  compensate  the
Executive for such services.

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

      1. Employment.

      The Company hereby employs the Executive, and the Executive hereby accepts
such employment, upon the terms and conditions herein set forth.

      2. Term.

      Subject to the provisions for  termination  provided  herein,  the initial
term of employment of the Executive  under this Agreement  shall be for a period
of two (2) years  commencing  on January 1, 2005 and ending on December 31, 2007
(the "Initial Term").  The Executive's  employment under this Agreement shall be
automatically  extended thereafter for two additional one-year periods (each, an
"Extension  Term") unless either party gives a notice of termination not earlier
than 180 days and not later than 90 days prior to the  expiration of the Initial
Term or any Extension  term. The Initial Term and all Extension  Terms,  if any,
are referred to herein as the "Term."

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      3. Duties and Responsibilities.

      3.1 During  the Term of this  Agreement,  the  Executive  shall  serve the
Company in an executive capacity and shall perform such duties as are reasonably
determined from time to time by the Company's Board of Directors.  The Executive
shall devote his full attention and apply his reasonable  efforts,  energies and
skills,  on a full-time basis, to the business of the Company and each Affiliate
(such   corporations  or  other  business  entities  being  referred  to  herein
collectively  as the  "Image  Group")  and  shall  not  during  the Term of this
Agreement  be  engaged  in any  other  business  activity,  whether  or not such
business activity is pursued for gain, profit, or other pecuniary advantage. The
Company  acknowledges  that the Executive holds existing  positions  outside the
Image Group:  Sole  Officer and  Director for Ribot Farms Ltd.  Sole Officer and
Director  of  Natalma  Industries  Inc.  Sole  Officer  and  Director  of Cosmah
Industries  Inc.  The  Executive  represents  that his  involvement  with  these
entities have no priority over the work he will perform for the Company and will
not interfere with the Executive's  responsibilities  and duties to the Company.
The Executive will provide notice to the Company,  in writing,  of any change in
the status of his positions  outside the Image Group.  Subject to the provisions
of  Section 10 hereof,  the  foregoing  restriction  shall not be  construed  as
preventing  the  Executive  from  investing his assets in such form or manner as
will not require any services on his part in the operation of the affairs of the
companies in which such investments are made.

      3.2 During the Term, the Executive shall serve as and perform the function
of Cheif Financial  Officer and shall perform such other duties and functions as
the  Board  of  Directors  of the  Company  may  determine  consistent  with the
Executive's  experience  and  background.  The  Executive  will  be  one  of the
Company's  principal  operating  officers and, as such, shall conduct and manage
the Company's business in accordance with the policies  established by the Board
of Directors from time to time.

      3.3 The  Executive  shall have a duty to act only in the best  interest of
the Image Group and  acknowledges  that he owes the Image Group a high degree of
trust and loyalty.  While he is employed by the Company, the Executive shall not
take any action that would harm or  detrimentally  impact upon the Image Group's
business.

      3.4 At all times during the performance of this  Agreement,  the Executive
shall strictly adhere to all policies, rules and regulations that have now been,
or may hereafter be, established by the Image Group for his conduct,  including,
but not limited to, all matters set forth in any employee  handbook of the Image
Group,  as adopted and modified from time to time.  The  Executive  shall report
directly to, and shall be subject to the  direction and control of, the Board of
Directors of the Company.

      3.5.  In order to induce the  Company to enter  into this  Agreement,  the
Executive represents and warrants to the Company that (a) the Executive is not a
party or subject  to any  employment  agreement  or  arrangement  with any other
person,  firm,  company,  corporation  or  other  business  entity,  and (b) the
Executive is subject to no restraint,  limitation,  or  restriction by virtue of
any agreement or arrangement or by virtue of any law or rule or otherwise  which
would  impair the  Executive's  right or ability  (i) to enter the employ of the
Company  or any other  member of the Image  Group or (ii) to  perform  fully his
duties and obligations pursuant to this Agreement.

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      4. Compensation.

      4.1 For all services  rendered by the Executive under this Agreement,  the
Company shall pay the Executive,  and the Executive shall accept,  the following
compensation:

            4.1.1 A salary of $156,000 per annum ("Salary");

            4.1.2.100,000  options  to  purchase  shares of the  Company  at the
                  closing  price on January 1, 2005.  All 100,000  options  will
                  vest immediately.

            4.1.3 Such additional compensation in the nature of bonus, incentive
                  compensation,   profit   sharing   or  other   similar   plan,
                  arrangement or program as the Board of Directors may determine
                  from time to time ("Additional Compensation").  The Additional
                  Compensation may be in the form of cash  compensation or stock
                  grants and may be based on performance by the Executive.

      4.2 Unless  otherwise  agreed by the Executive,  the Company shall pay the
Executive's Salary in equal bi-weekly installments and shall pay the Executive's
Additional  Compensation  at such time as the Board of Directors  may  determine
from time to time. The Executive's  Salary and Additional  Compensation shall be
payable  subject to such deductions as are then required by law and such further
deductions as may be agreed to by the Executive in accordance with the Company's
prevailing salary payroll practices.

      4.3 On or about January 1, 2006, the Board of Directors of the Company and
the Executive shall review the Executive's compensation under this Agreement, at
which time such  compensation  may be  adjusted  upon  mutual  agreement  of the
parties.

      5. Benefits.

      5.1 The Executive shall be entitled to four (4) weeks of paid vacation per
calendar  year,  provided  that  the  Executive  shall  not take  more  than two
consecutive weeks of vacation during any year. No portion of any unused vacation
time shall be carried over to a subsequent period unless specifically authorized
by the Board of Directors of the Company.

      5.2 The Executive  shall also be entitled to participate in any pension or
profit sharing plan, stock purchase plan, stock option plan, group life,  dental
or vision insurance plan,  hospitalization insurance plan, medical services plan
and other similar plans, now or hereafter existing, afforded to the employees of
the  Image  Group.  The  company  will  make a  contribution  to the  Executives
Registered Retirement Compensation Plan each year to the maximum permitted under
the Canadian Income Tax Act estimated to be $14,000 for 2005.

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      5.3 The Company  shall  furnish the  Executive  with an office  located in
Vancouver,  British  Columbia or the  surrounding  area,  of a size and with the
furnishings  and other  appointments,  and such other  facilities,  services and
staff, in each case at a level that is consistent with his position,  duties and
responsibilities.

      6.  Expenses.  The Executive  shall be  authorized  to incur  ordinary and
necessary  business  expenses in connection  with the  performance of his duties
hereunder,  including travel expenses and  entertainment  expenses,  as shall be
authorized  by the Board of  Directors of the Company.  Such  expenses  shall be
reimbursed only upon  presentation of paid receipts and/or original invoices and
such other information as shall be required for tax purposes.

      7. Sick  Leave.  The  Executive  shall be entitled to annual sick leave in
length to conform with the Company's general employment practices.

      8. Termination of Employment.

The Executive's employment under this Agreement may be terminated prior to the
expiration of the Term under any of the circumstances set forth in this Section
8.

      8.1 The Executive's employment shall terminate upon Executive's death.

      8.2 The Company may terminate the Executive's employment upon his becoming
"Totally  Disabled."  For purposes of this  Agreement,  the  Executive  shall be
"Totally  Disabled" if the Executive is physically or mentally  incapacitated so
as to render the  Executive  incapable  of  performing  his usual and  customary
duties under this Agreement without unreasonable accommodation.  The Executive's
receipt of disability benefits under the Company's long-term disability benefits
plan (the "LTD Plan") or receipt of Social Security disability benefits shall be
deemed  conclusive  evidence of Total  Disability for purpose of this Agreement;
provided,  however,  that in the  absence  of the  Executive's  receipt  of such
long-term  disability benefits or Social Security benefits,  the Company's Board
of  Directors  may, in its  reasonable  discretion  (but based upon  appropriate
medical evidence), determine that the Executive is Totally Disabled.

      8.3 The Company may terminate the Executive's employment for "Cause." Such
termination shall be effective as of the date specified in the written notice of
termination  provided to  Executive.  For purposes of this  Agreement,  the term
"Cause" shall mean any of the following: (A) conviction (including conviction on
a nolo contendere  plea) of (I) a crime involving the commission by Executive of
a felony or (II) a criminal act  intended to result  directly or  indirectly  in
substantial  gain or  personal  enrichment  to  Executive  at the expense of the
Company,  but excluding any such conviction that results solely from Executive's
title or position with the Company and is not based on his personal conduct;  or
(B) willful  misconduct or gross  negligence in connection  with the business of
the  Company  or an  Affiliate  occurring  after  the  Effective  Date  of  this
Agreement;  or (C) persistent  failure to observe or perform  Executive's duties
and  responsibilities or to comply with Company policies as set forth in Section
3 hereof after written  notice  thereof by the Company;  or (D) breach of any of
the covenants set forth in Section 10, 11 or 12 of this Agreement.

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      8.4 The  Company  may  terminate  the  Executive's  employment  under this
Agreement  without Cause after providing  ninety (90) days' prior written notice
of termination to the Executive.

      8.5  Any  termination  by  the  Company  under  this  Agreement  shall  be
communicated  by notice of termination  to the  Executive.  For purposes of this
Agreement,  a Notice of  Termination  shall mean a notice in writing  that shall
indicate the specific  termination  provision in this  Agreement  relied upon to
terminate the  Executive's  employment  and, if  applicable,  shall set forth in
reasonable  detail  the facts and  circumstances  claimed to provide a basis for
termination of the Executive's employment under the provision so indicated.

      9. Compensation and Benefits Payable Following Termination.

      If the Executive's employment is terminated prior to the expiration of the
Term, the Executive (or his surviving spouse, beneficiary or estate, as the case
may be) shall receive the following compensation and benefits:

      9.1 Upon termination of the Executive's employment under Section 8 hereof,
the Company shall pay the Executive (or his personal representative) any accrued
but unpaid Salary for services  rendered to the date of termination,  the amount
of any compensation previously earned and deferred by the Executive,  any earned
but unpaid incentive  compensation for any calendar year ended prior to the year
in which is employment  terminates,  any accrued but unpaid expenses required to
be reimbursed under this Agreement,  and any vacation pay accrued to the date of
the termination.  The Company shall pay all of the foregoing amounts, except for
earned  but  unpaid  Additional  Compensation,  within 30 days after the date of
termination;  earned but unpaid  Additional  Compensation  for any calendar year
ended prior to the year in which the Executive's  employment terminates shall be
paid at the same time as the Company pays  Additional  Compensation to its other
senior executives.

      9.2 In the event that the  Executive's  employment  is  terminated  by the
Company without Cause pursuant to Section 8.4 above:

      (i)   The Company  shall  continue to provide the Executive the Salary and
            benefits  set forth in  Sections  4.1 and 5.2 above  that would have
            been payable to him if he had continued to perform his normal duties
            and  responsibilities  on a full-time basis until the earlier of (i)
            the expiration of the Term or (ii) his death.

      (ii)  Any amounts payable to the Executive under this Section 9.2 shall be
            reduced by any employment or consulting compensation received by the
            Executive from any source after the termination of this Agreement.

      9.3 If the  Executive's  employment is terminated  for any reason prior to
the last day of a calendar  year,  the Company  shall pay the  Executive (or his
personal  representative)  an amount equal to the pro rata portion (based on the
number  of days of  employment  prior to the  termination  date)  of the  annual
Additional  Compensation that would have been payable to the Executive if he had
continued in employment  through the end of the calendar year.  Such amount will
be paid at the  same  time  and in the  same  manner  as the  annual  Additional
Compensation for such year is paid to other senior executive officers.

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      9.4 Except as may otherwise be provided under this Agreement,

      (i)   any benefits to which the Executive may be entitled  pursuant to the
            plans,  policies  and  arrangements  referred  to in Section 5 above
            shall be determined  and paid in  accordance  with the terms of such
            plans, policies and arrangements; and

      (ii)  the Executive shall have no right to receive any other compensation,
            or to  participate in any other plan,  arrangement or benefit,  with
            respect to future periods after such termination or resignation.

      10. Restrictive Covenants.

      10.1 The Executive  acknowledges  that (i) the business  activities of the
Image Group  include and are  expected  to include the  manufacture  and sale of
celebrity image memorabilia and sports branded products ("Sports Memorabilia and
Branding  Business"),   (ii)  he  will  have  a  major  responsibility  for  the
development,  management and operation of the business of the Company, (iii) the
Company's business is intended to be international in scope, (iv) his employment
by the Company will bring him into close contact with  confidential  information
of the Company, its Affiliates,  its customers,  and its suppliers,  and (v) the
agreements  and covenants  contained in this Section 10 are essential to protect
the business  interests of the Company and that the Company would not enter into
this Agreement but for such agreements and covenants. Accordingly, the Executive
agrees as follows:

      10.1.1 Except as otherwise  specifically  provided for in this  Agreement,
throughout the Employment Period and the Post-Termination  Period (as such terms
are defined in Section 10.2) the Executive  shall not,  directly or  indirectly,
(i) engage in any aspect of the Sports Memorabilia and Branding Business or (ii)
without  limiting the generality of clause (i) above, be or become,  or agree to
be or become,  interested  in or associated  with,  in any capacity  (including,
without  limitation,  as  a  partner,  shareholder,  owner,  officer,  director,
employee,  principal,  agent,  creditor,  trustee,  consultant,  co-venturer  or
otherwise), any individual,  corporation, firm, association,  partnership, joint
venture or other  business  entity,  which is engaged in or which is planning to
engage in any aspect of the Sports Memorabilia and Branding Business;  provided,
however, that the Executive may own, solely as an investment,  securities of any
publicly  held  corporation  traded on any national  securities  exchange in the
United States of America,  if the  Executive is not a  controlling  person of or
member of a group that  controls,  such  corporation  and does not,  directly or
indirectly, own more than 1% of any class of securities of such corporation.

      10.1.2 Throughout the Employment Period and the  Post-Termination  Period,
the  Executive  shall  not,  directly  or  indirectly  (i)  induce or attempt to
influence  any  executive  of any member of the Image Group to leave its employ,
(ii) aid or agree to aid any competitor, customer or supplier of the Image Group
in any attempt to hire any person who shall have been  employed by any member of
the Image Group within the one (1) year period  preceding such requested aid, or
(iii)  induce or attempt to  influence  any person or business  entity who was a
customer or supplier of any member of the Image Group during any portion of such
period to transact  business  with a competitor of the Image Group in the Sports
Memorabilia and Branding Business.

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         10.1.3 Throughout the Employment Period and thereafter, the Executive
shall not disclose to anyone any information about the affairs of any member of
the Image Group, including without limitation, trade secrets, trade "know-how",
inventions, customer lists, client lists, business plans, operational methods,
pricing policies, marketing plans, sales plans, identity of suppliers, trading
positions, sales, profits or other financial information, which is confidential
to any member of the Image Group or is not generally known in the relevant trade
(collectively, "Proprietary Information"), regardless of whether the Executive
developed such Proprietary Information, nor shall the Executive make use of any
such Proprietary Information for his own benefit.

      10.2 For the purposes of this  Agreement  the  following  terms shall have
respective meanings ascribed to them below:

      10.2.1 "Employment Period" means the period of the Executive's  employment
by the Company,  including such period of employment,  if any,  extending beyond
the Term.

      10.2.2 "Post-Termination Period" means the two-year period commencing with
the end of the Employment Period.

      10.3 If the Executive breaches, or threatens to commit a breach of, any of
the provisions of Subsection  10.1 (the  "Restrictive  Covenants"),  the Company
shall have the following rights and remedies, each of which shall be independent
of the others and  severally  enforceable,  and each of which is in addition to,
and not in lieu of, any other  rights and  remedies  available to the Company at
law or in equity:

      10.3.1 The  Executive  shall  account  for and pay over to the Company all
compensation,  profits,  monies, accruals and other benefits derived or received
by the Executive or any person or business entity  affiliated with the Executive
as a result of any action or  transactions  constituting  a breach of any of the
Restrictive Covenants.

      10.3.2  Notwithstanding  the  provisions of Subsection  10.3.1 above,  the
Executive acknowledges and agrees that in the event of a violation or threatened
violation  of any of the  Restrictive  Covenants,  the  Company  shall  have  no
adequate remedy at law and shall therefore be entitled to enforce each provision
by temporary or permanent  injunctive or mandatory  relief obtained in any court
of competent jurisdiction without the necessity of proving damages,  posting any
bond or other security,  and without  prejudice to any other rights and remedies
which may be available at law or in equity.

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      10.4 If any of the Restrictive Covenants,  or any part thereof, is held to
be invalid or  unenforceable,  the same  shall not affect the  remainder  of the
covenant  or  covenants,  which  shall be given full force and  effect,  without
regard to the invalid or unenforceable portions.

      10.5 If any of the Restrictive Covenants,  or any part thereof, is held to
be  unenforceable  because of the duration of such provision or the area covered
thereby, the parties hereto agree that the court making such determination shall
have the power to reduce the duration  and/or area of such provision and, in its
reduced from, such provision shall then be enforceable.

      10.6 The  parties  hereto  intend to and  hereby  confer  jurisdiction  to
enforce the Restrictive Covenants upon the courts of any jurisdiction within the
geographical scope of such Restrictive  Covenants.  In the event that the courts
of any one or more of such  jurisdiction  shall hold such Restrictive  Covenants
wholly unenforceable by reason of the breadth of such scope or otherwise,  it is
the intention of the parties  hereto that such  determination  not bar or in any
way affect the Company's right to the relief provided above in the courts of any
other jurisdictions within the geographical scope of such Restrictive Covenants,
as to breaches of such  covenants in such other  respective  jurisdictions,  the
above  covenants as they relate to each  jurisdiction  being,  for this purpose,
severable into diverse and independent covenants.

      11. Inventions.

      All inventions, discoveries, investigations, improvements, know-how, trade
secrets,  and developments in technology  ("Inventions") that directly relate to
the business carried on, or to be carried on, by any member the Image Group that
have been or shall be made of or reduced to  practice by the  Executive,  either
alone or with  others,  whether the  activity in question  takes place within or
outside the usual  working  hours of the  Executive or on or off the premises of
the Company,  shall be held by the Executive  for the  exclusive  benefit of the
Company,  and the Executive shall assign in writing to the Company,  without any
payment being required or the part of the Company,  all of the right,  title and
interest which he may have acquired in and to any  Inventions.  In addition,  he
shall both  during and at any time prior to two (2) years  after the  Employment
Period,  assist the Company in every way reasonably requested by the Company, at
the expense of the Company  without cost to the Executive  (and with  reasonable
compensation  to the Executive in the event his employment  has then ended),  to
obtain for the Company in any and all  countries,  and to  maintain  and enforce
patents or the reissue or extension thereof on all Inventions which have been or
may be assigned.

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      12. Documentation of Proprietary Information and Inventions.

      All documents,  records, models,  prototypes or other tangible embodiments
or evidence of  Proprietary  Information  or  Inventions,  and all copies of the
foregoing  ("Materials"),  which may at any time be acquired by or come into the
possession of the Executive are the sole and exclusive  property of the Company.
All  Materials  shall be  surrendered  to the  Company  upon the  request by the
Company at any time. In addition,  upon the reasonable request by the Company at
any time,  the Executive  shall prepare  materials  accurately and adequately to
describe,  set forth or embody any  Proprietary  Information  or Inventions  and
deliver the same to the Company in order to  accomplish or complete the transfer
thereof to the Company, and the Executive shall be reimbursed by the Company for
all of his reasonable  out-of-pocket expenses incurred in so doing. During or at
any time prior to two (2) years after the Employment Period, the Executive shall
execute  all  documents  and take all  such  other  action  as the  Company  may
reasonably  require (being  reimbursed  for all of his reasonable  out-of-pocket
expenses  in this  connection)  in  order  to  assign  the  Company  any and all
copyrights and reproduction  rights to any Materials  prepared by him during and
in connection with such employment.

      13. Insurance.

      The Company may, from time to time, apply for,  purchase and maintain,  in
its own name and at its own expense, life, health, accident, disability or other
insurance  upon the  Executive in any sum or sums that it may deem  necessary to
protect its  interests,  and the  Executive  agrees to aid and  cooperate in all
reasonable  respects with the Company in procuring  any and all such  insurance,
including,  without  limitation,  submitting to the usual and customary  medical
examinations, and by filling out, executing and delivering such applications and
other  instruments  in writing as may be  reasonably  required  by an  insurance
company or companies to which an application or applications  for such insurance
may be made by or for the Company.  In order to induce the Company to enter into
this Agreement, the Executive represents and warrants to the Company that to the
best of his  knowledge  the  Executive  is  insurable  at  standard  (non-rated)
premiums.  The Company  acknowledges  that the Executive  has disclosed  that he
suffers  from  hemochromatosis  which may impact his  insurability  at  standard
premiums.

      14. Miscellaneous.

      14.1 This Agreement is a personal  contract,  and the rights and interests
of the Executive hereunder may not be sold,  transferred,  assigned,  pledged or
hypothecated by the Executive,  except as otherwise  expressly  permitted by the
provisions of this Agreement.  The Executive  shall not under any  circumstances
have  any  option  or right  to  require  payment  hereunder  otherwise  than in
accordance with the terms hereof. Except as otherwise expressly provided herein,
the Executive shall not have any power of anticipation, alienation or assignment
of payments contemplated hereunder, and all rights and benefits of the Executive
shall be for the sole  personal  benefit of the  Executive,  and no other person
shall  acquire  any right,  title or interest  hereunder  by reason of any sale,
assignment,  transfer,  claim or judgment or bankruptcy  proceedings against the
Executive;  provided,  however,  that (i) the Executive  shall have the right to
assign his right to receive any payment previously due and owing, subject to all
claims and  defenses of the  Company,  and (ii) in the event of the  Executive's
death, the Executive's  estate,  legal  representatives or beneficiaries (as the
case may be) shall have the right to receive all of the benefits that accrued to
the Executive pursuant to, and in accordance with, the terms of this Agreement.

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      14.2 The  Company  shall have the right to assign  this  Agreement  to any
successor to substantially all of its business or assets,  and the Executive and
any such successor shall be bound by all provisions hereof.

      14.3  Any  notice  required  or  permitted  to be given  pursuant  to this
Agreement  shall be in writing and sent to the party for whom or which intended,
at the address of such party set forth below,  by registered or certified  mail,
return  receipt  requested  or at such  other  address  as  either  party  shall
designate  by notice to the  other in the  manner  provided  herein  for  giving
notice:

                  (a)   If to the Company to:
                                Image Innovations Holdings Inc.
                                432 Park Avenue South
                                New York, New York 10022
                                Attention: Derick Sinclair
                                Facsimile:  (604) 925-5283

                        with a copy to:
                                Snow Becker Krauss P.C.
                                605 Third Avenue
                                New York, New York 10158
                                Attention: Jack Becker, Esq.
                                Facsimile: (212) 949-7052

                  (b)   If to Executive, to:
                                Derick G Sinclair
                                1550 Ostler Crt North
                                Vancouver, BC, V7G2P1 Canada
                                Facsimile: 604 924-8000

      14.7 This Agreement may be executed in  counterparts,  each of which shall
be deemed an original,  but all of which together  shall  constitute one and the
same instrument.

      14.8 If any provision of this Agreement,  or any part thereof,  is held to
be illegal or unenforceable,  the remainder of this Agreement shall nevertheless
remain in full force and effect.

      14.9 Each of the parties  hereto shall,  at any time and from time to time
hereafter,  upon the  reasonable  request of the other,  take further action and
execute,  acknowledge and deliver all such  instruments of further  assurance as
necessary to carry out the provisions of this Agreement.

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      14.10 This  Agreement  contains  the entire  agreement  and  understanding
between the Company and the Executive with respect to the subject matter hereof.
No  representations  or warranties of any kind or nature relating to the Company
or its business, assets, liabilities, operations, future plans or prospects have
been made by or on behalf of the Company to the Executive.

      14.11 All  controversies  or claims  arising  out of or  relating  to this
Agreement,  or the breach  hereof,  shall be subject to the laws of the State of
New York and  submitted  to the  Courts of the State and  County of New York for
resolution.

      IN WITNESS WHEREOF,  the parties hereto have executed this Agreement as of
the date first above written.

                                            IMAGE INNOVATIONS
                                            HOLDINGS INC.:

                                            -------------------------
                                            Arthur Gononsky
                                            Chairman, Compensation Committee

                                            EXECUTIVE:

                                            -------------------------
                                            Derick Sinclair

                                       11SHARE EXCHANGE AGREEMENT

      This SHARE EXCHANGE AGREEMENT, dated as of April 16, 2004, is made by and
among PIVOTAL SELF-SERVICE TECHNOLOGIES INC., a Delaware corporation (the
"Acquiror"), each of the Persons listed on Exhibit A (collectively, the
"Shareholders"), and PHANTOM FIBER CORPORATION, a Canadian corporation (the
"Company").

                                   BACKGROUND

      The Shareholders have agreed to transfer to the Acquiror, and the Acquiror
has agreed to acquire from the Shareholders (i) all of the Shares, which Shares
constitute 100% of the outstanding capital stock of the Company, in exchange for
137,410,735 shares of the Acquiror's Common Stock and (ii) all of the Company
Debentures, in exchange for 30,000,000 shares of the Acquiror's Common Stock and
Warrants to purchase 15,000,000 shares of the Acquiror's Common Stock, all on
the terms and conditions as set forth herein.

                                   SECTION I
                                   DEFINITIONS

      Unless the context otherwise requires, the terms defined in this Section 1
will have the meanings herein specified for all purposes of this Agreement,
applicable to both the singular and plural forms of any of the terms herein
defined.

      1.1. "Accredited Investor" has the meaning set forth in Regulation D under
the Securities Act and set forth on Exhibit B.

      1.2. "Acquired Companies" means, collectively, the Company and the Company
Subsidiaries.

      1.3. "Acquiror Balance Sheet" means the Acquiror's audited consolidated
balance sheet at December 31, 2003.

      1.4. "Acquiror Board" means the Board of Directors of the Acquiror.

      1.5. "Acquiror Companies" means, collectively, the Acquiror and the
Acquiror Subsidiaries.

      1.6. "Acquiror's Common Stock" means the Pivotal Self-Service Technologies
Inc. common stock, par value $0.001 per share.

      1.7. "Acquiror Shares" means, collectively, the 137,410,735 shares of
Acquiror's Common Stock being issued to the Shareholders in exchange for the
Shares and the 30,000,000 shares of Acquiror's Common Stock being issued to the
Shareholders in exchange for the Company Debentures, pursuant to this Agreement.

      1.8. "Acquiror Subsidiaries" means all of the direct and indirect
Subsidiaries of the Acquiror.

<PAGE>

      1.9. "Acquisition Transaction" has the meaning set forth in Section
11.1.7.

      1.10. "Additional Shares" has the meaning set forth in Section 12.3.2.

      1.11. "Affiliate" means any Person that directly or indirectly controls,
is controlled by or is under common control with the indicated Person.

      1.12. "Agreement" means this Share Exchange Agreement, including all
Schedules and Exhibits hereto, as this Share Exchange Agreement may be from time
to time amended, modified or supplemented.

      1.13. "Approved Plans" means a stock option or similar plan for the
benefit of employees or others which has been approved by the stockholders of
the Acquiror.

      1.14. "Business Day" means a day, other than Saturday, on which banks in
New York City are open for business.

      1.15. "Claims Period" has the meaning set forth in Section 12.2.1.

      1.16. "Closing" has the meaning set forth in Section 3.

      1.17. "Closing Date" has the meaning set forth in Section 3.

      1.18. "Code" means the Internal Revenue Code of 1986, as amended.

      1.19. "Common Stock" means the Company's common stock, without par value.

      1.20. "Commission" means the United States Securities and Exchange
Commission or any other federal agency then administering the Securities Act.

      1.21. "Company Balance Sheet" means, on the date of this Agreement, the
Company's unaudited consolidated balance sheet at March 31, 2004 and, on the
Closing Date, the Company's audited consolidated balance sheet at October 31,
2003.

      1.22. "Company Benefit Plans" means employee pension benefit plans,
medical, disability, severance pay, educational, life insurance and other
employee welfare benefit plans, and all other bonus, stock option, stock
purchase or other equity-based compensation arrangements, and incentive,
deferred compensation, supplemental retirement, severance, disability, vacation,
cafeteria and other similar employee benefit plans, policies, programs or
contracts (including those which contain change of control provisions or pending
change of control provisions), and any employment, executive compensation or
severance agreements (including those with change of control provisions or
pending change of control provisions), as amended, modified or supplemented, in
any case that (a) are maintained or contributed to (or to which there was an
obligation to contribute) by any Acquired Company, or (b) were formerly
maintained or contributed to (or to which there was an obligation to
contribute), by any Acquired Company, as well as each plan with respect to which
any Acquired Company has or could have any liability, whether direct or indirect
or actual or contingent (including any liability arising out of an
indemnification, guarantee, hold harmless or similar agreement).

                                     - 1 -
<PAGE>

      1.23. "Company Audited Financial Statements" has the meaning set forth in
Section 8.5.

      1.24. "Company Board" means the Board of Directors of the Company.

      1.25. "Company Debentures" means the convertible debentures of the Company
in the aggregate principal amount of $1,200,000 Canadian Dollars.

      1.26. "Company Indemnified Party" has the meaning set forth in Section
12.3.1.

      1.27. "Company Nominees" means the four individuals designated by the
Shareholders pursuant to Section 2.4 to be nominated for election to the
Acquiror Board to take office if and when the Closing occurs.

      1.28. "Company Preliminary Financial Statements" has the meaning set forth
in Section 5.8.

      1.29. "Company Subsidiary" means Phantom Fiber Inc.

      1.30. "Covered Persons" has the meaning set forth in Section 8.6.3.

      1.31. "Damages" has the meaning set forth in Section 12.2.1.

      1.32. "D&O Insurance" has the meaning set forth in Section 8.6.4.

      1.33. "Distributor" means any underwriter, dealer or other Person who
participates, pursuant to a contractual arrangement, in the distribution of the
securities offered or sold in reliance on Regulation S.

      1.34. "Environmental Laws" means any Law or other requirement relating to
the environment, natural resources, or public or employee health and safety.

      1.35. "Environmental Permit" means all licenses, permits, authorizations,
approvals, franchises and rights required under any applicable Environmental Law
or Order.

      1.36. "Equity Security" means any stock or similar security, including,
without limitation, securities containing equity features and securities
containing profit participation features, or any security convertible into or
exchangeable for, with or without consideration, any stock or similar security,
or any security carrying any warrant, right or option to subscribe to or
purchase any shares of capital stock, or any such warrant or right.

      1.37. "ERISA" means the Employee Retirement Income Security Act of 1974,
as amended.

      1.38. "Exchange Act" means the Securities Exchange Act of 1934, as
amended, or any similar federal statute, and the rules and regulations of the
Commission thereunder, all as the same may be in effect from time to time.

      1.39. "Exhibits" means the several exhibits referred to and identified in
this Agreement.

                                     - 2 -
<PAGE>

      1.40. "GAAP" means, with respect to any Person, United States generally
accepted accounting principles applied on a consistent basis with such Person's
past practices.

      1.41. "Governmental Authority" means any federal or national, state or
provincial, municipal or local government, governmental authority, regulatory or
administrative agency, governmental commission, department, board, bureau,
agency or instrumentality, political subdivision, commission, court, tribunal,
official, arbitrator or arbitral body, in each case whether U.S. or non-U.S.

      1.42. "Indebtedness" means any obligation, contingent or otherwise. Any
obligation secured by a Lien on, or payable out of the proceeds of, or
production from, property of the relevant party will be deemed to be
Indebtedness.

      t 6 0 1.43. "Indebtedness for Borrowed Money" means (a) all Indebtedness
in respect of money borrowed; (b) all Indebtedness evidenced by a promissory
note, bond or similar written obligation to pay money; or (c) all such
Indebtedness guaranteed by the relevant party or for which the relevant party is
otherwise contingently liable.

      1.44. "Indemnified Persons" has the meaning set forth in Section 8.6.2.

      1.45. "Intellectual Property" means all industrial and intellectual
property, including, without limitation, all U.S. and non-U.S. patents, patent
applications, patent rights, trademarks, trademark applications, common law
trademarks, Internet domain names, trade names, service marks, service mark
applications, common law service marks, and the goodwill associated therewith,
copyrights, in both published and unpublished works, whether registered or
unregistered, copyright applications, franchises, licenses, know-how, trade
secrets, technical data, designs, customer lists, confidential and proprietary
information, processes and formulae, all computer software programs or
applications, layouts, inventions, development tools and all documentation and
media constituting, describing or relating to the above, including manuals,
memoranda, and records, whether such intellectual property has been created,
applied for or obtained anywhere throughout the world.

      1.46. "Laws" means, with respect to any Person, any U.S. or non-U.S.
federal, national, state, provincial, local, municipal, international,
multinational or other law (including common law), constitution, statute, code,
ordinance, rule, regulation or treaty applicable to such Person.

      1.47. "Lien" means any mortgage, pledge, security interest, encumbrance,
lien or charge of any kind, including, without limitation, any conditional sale
or other title retention agreement, any lease in the nature thereof and the
filing of or agreement to give any financing statement under the Uniform
Commercial Code of any jurisdiction and including any lien or charge arising by
Law.

      1.48. "Market Price," with respect to Acquiror's Common Stock, shall mean
the average of the reported per share closing bid price and closing ask price of
Acquiror's Common Stock regular way on the OTC Bulletin Board (or, if it is not
then quoted on the OTC Bulletin Board, the over-the-counter market as furnished
by any NASD member firm selected from time to time by the Acquiror for that
purpose) for five (5) consecutive trading days ending with the trading day
immediately prior to the date as of which the Market Price is being determined.

                                     - 3 -
<PAGE>

      1.49. "Material Acquiror Contract" means any and all agreements,
contracts, arrangements, leases, commitments or otherwise, of the Acquiror
Companies, of the type and nature that the Acquiror is required to file with the
Commission.

      1.50. "Material Adverse Effect" means, when used with respect to the
Acquiror Companies or the Acquired Companies, as the case may be, (a) any
material adverse effect on the business, assets, financial condition or results
of operations of the Acquiror Companies or the Acquired Companies, as the case
may be, in each case taken as a whole or (b) any material impairment of the
ability of the Acquiror or the Company, as the case may be, to perform their
respective obligations under this Agreement.

      1.51. "Material Company Contract" means any and all agreements, contracts,
arrangements, leases, commitments or otherwise, of the Acquired Companies, of
the type and nature that would be required to be filed with the Commission if
the Company were a reporting company.

      1.52. "Order" means any award, decision, injunction, judgment, order,
ruling, subpoena, or verdict entered, issued, made, or rendered by any
Governmental Authority.

      1.53. "Organizational Documents" means (a) the articles or certificate of
incorporation and the by-laws or code of regulations of a corporation; (b) the
partnership agreement and any statement of partnership of a general partnership;
(c) the limited partnership agreement and the certificate of limited partnership
of a limited partnership; (d) the articles or certificate of formation and
operating agreement of a limited liability company; (e) any other document
performing a similar function to the documents specified in clauses (a), (b),
(c) and (d) adopted or filed in connection with the creation, formation or
organization of a Person; and (f) any and all amendments to any of the
foregoing.

      1.54. "Outside Date" has the meaning set forth in Section 11.1.3.

      1.55. "Permitted Liens" means (a) Liens for Taxes not yet payable or in
respect of which the validity thereof is being contested in good faith by
appropriate proceedings and for the payment of which the relevant party has made
adequate reserves; (b) Liens in respect of pledges or deposits under workmen's
compensation laws or similar legislation, carriers, warehousemen, mechanics,
laborers and materialmen and similar Liens, if the obligations secured by such
Liens are not then delinquent or are being contested in good faith by
appropriate proceedings conducted and for the payment of which the relevant
party has made adequate reserves; (c) statutory Liens incidental to the conduct
of the business of the relevant party which were not incurred in connection with
the borrowing of money or the obtaining of advances or credits and that do not
in the aggregate materially detract from the value of its property or materially
impair the use thereof in the operation of its business; and (d) Liens that
would not reasonably be expected to have a Material Adverse Effect.

      1.56. "Person" means all natural persons, corporations, business trusts,
associations, companies, partnerships, limited liability companies, joint
ventures and other entities, governments, agencies and political subdivisions.

                                     - 4 -
<PAGE>

      1.57. "Proceeding" means any action, arbitration, audit, hearing,
investigation, litigation, or suit (whether civil, criminal, administrative,
investigative, or informal) commenced, brought, conducted, or heard by or
before, or otherwise involving, any Governmental Authority.

      1.58. "Regulation S" means Regulation S under the Securities Act, as the
same may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission.

      1.59. "Required Acquiror Stockholder Actions" means, collectively, the
vote of the holders of Acquiror's Common Stock approving: (i) the election of
the Company Nominees to the Acquiror Board, to take office if and when the
Closing occurs; (ii) an increase in the authorized number of shares of
Acquiror's Common Stock from 150,000,000 to 400,000,000 shares; (iii) an
increase in the number of shares of Acquiror's Common Stock reserved under stock
option plans from 3,000,000 to 20,000,000, (iv) a change in Acquiror's name to
"Phantom Fiber Corporation," immediately following, and subject to, the Closing.

      1.60. "Returned Shares" has the meaning set forth in Section 12.2.2.

      1.61. "Rule 144" means Rule 144 under the Securities Act, as the same may
be amended from time to time, or any successor statute.

      1.62. "Schedules" means the several schedules referred to and identified
herein, setting forth certain disclosures, exceptions and other information,
data and documents referred to at various places throughout this Agreement.

      1.63. "SEC Documents" has the meaning set forth in Section 6.26.

      1.64. "Section 4(2)" means Section 4(2) under the Securities Act, as the
same may be amended from time to time, or any successor statute.

      1.65. "Securities Act" means the Securities Act of 1933, as amended, or
any similar federal statute, and the rules and regulations of the Commission
thereunder, all as the same will be in effect at the time.

      1.66. "Shares" means, collectively, the 24,983,770 outstanding shares of
Common Stock of the Company.

      1.67. "Subsidiary" means, with respect to any Person, any corporation,
limited liability company, joint venture or partnership of which such Person (a)
beneficially owns, either directly or indirectly, more than 50% of (i) the total
combined voting power of all classes of voting securities of such entity, (ii)
the total combined equity interests, or (iii) the capital or profit interests,
in the case of a partnership; or (b) otherwise has the power to vote or to
direct the voting of sufficient securities to elect a majority of the board of
directors or similar governing body.

      1.68. "Survival Period" has the meaning set forth in Section 12.1.

                                     - 5 -
<PAGE>

      1.69. "Taxes" means all foreign, federal, state or local taxes, charges,
fees, levies, imposts, duties and other assessments, as applicable, including,
but not limited to, any income, alternative minimum or add-on, estimated, gross
income, gross receipts, sales, use, transfer, transactions, intangibles, ad
valorem, value-added, franchise, registration, title, license, capital, paid-up
capital, profits, withholding, payroll, employment, unemployment, excise,
severance, stamp, occupation, premium, real property, recording, personal
property, federal highway use, commercial rent, environmental (including, but
not limited to, taxes under Section 59A of the Code) or windfall profit tax,
custom, duty or other tax, governmental fee or other like assessment or charge
of any kind whatsoever, together with any interest, penalties or additions to
tax with respect to any of the foregoing; and "Tax" means any of the foregoing
Taxes.

      1.70. "Tax Return" means any return, declaration, report, claim for refund
or credit, information return, statement or other similar document filed with
any Governmental Authority with respect to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.

      1.71. "Transaction Documents" means, collectively, all agreements,
instruments and other documents described herein or related hereto, including
the Phantom Fiber Shareholder Agreement and the Halloran Employment Agreement.

      1.72. "Transaction Securities" has the meaning set forth in Section 4.2.1.

      1.73. "U.S." means the United States of America.

      1.74. "U.S. person" has the meaning set forth in Regulation S under the
Securities Act and set forth on Exhibit C hereto.

      1.75. "Warrants" means, warrants issued to holders of Company Debentures
to acquire Acquiror's Common Stock, at $0.084 per share, immediately exercisable
and expiring on the second anniversary of Closing Date.

                                   SECTION II
                   EXCHANGE OF SHARES AND SHARE CONSIDERATION

      2.1. Share Exchange. At the Closing, each of the Shareholders shall
transfer to, and the Acquiror shall acquire from each Shareholder, that number
of Shares and Convertible Debentures set out beside such Shareholder's name on
Exhibit A for the consideration and on the terms set forth in this Agreement.
Subject to Section 3.2, the aggregate consideration for the Shares and the
Company Debentures acquired by Acquiror pursuant to this Agreement shall be
167,410,735 Acquiror Shares to be issued to each Shareholder on a pro rata basis
in accordance with the portion of all of the Shares and Convertible Debentures,
taken together on an as-converted basis, that such Shareholder owns and Warrants
to acquire 15,000,000 shares of Acquiror's Common Stock, to be issued to each
holder of Company Debentures on pro rata basis in accordance with the portion of
all Convertible Debentures that such holder owns, (all as set forth on Exhibit
A).

                                     - 6 -
<PAGE>

      2.2. Withholding. The Acquiror shall be entitled to deduct and withhold
from the Acquiror Shares and Warrants otherwise payable pursuant to this
Agreement to any Shareholder such amounts as it is required to deduct and
withhold with respect to the making of such payment under the Code or any
provision of state, local, provincial or foreign tax Law. To the extent that
amounts are so withheld, such withheld amounts shall be treated for all purposes
of this Agreement as having been paid to the Shareholder in respect of which
such deduction and withholding was made.

      2.3. Section 368 Reorganization. For U.S. federal income tax purposes, the
exchange by the Shareholders of the Shares and Company Debentures for the
Acquiror Shares and Warrants is intended to constitute a "reorganization" within
the meaning of Section 368(a)(1)(B) of the Code. The parties to this Agreement
hereby adopt this Agreement as a "plan of reorganization" within the meaning of
Sections 1.368-2(g) and 1.368-3(a) of the United States Treasury Regulations.
Notwithstanding the foregoing or anything else to the contrary contained in this
Agreement, the parties acknowledge and agree that no party is making any
representation or warranty as to the qualification of the exchange by the
Shareholders of the Shares and Company Debentures for the Acquiror Shares and
Warrants as a reorganization under Section 368 of the Code. The parties
acknowledge and agree that each (i) has had the opportunity to obtain
independent legal and tax advice with respect to the transaction contemplated by
this Agreement, and (ii) is responsible for paying its own Taxes including
without limitation, any adverse Tax consequences that may result if the
transaction contemplated by this Agreement is not determined to qualify as a
reorganization under Section 368 of the Code.

      2.4. Directors of Acquiror at Closing. Prior to the Closing, Acquiror
shall hold a meeting of its stockholders at which the following individuals (the
"Company Nominees") shall be considered for election to the Acquiror Board to
take office if and when the Closing occurs: Gordon Fowler; Jeffrey Halloran;
Graham Simmonds; Stephen Gesner and James Hardy.

                                  SECTION III
                                     CLOSING

      3.1. Closing. The closing (the "Closing") of the share exchange will occur
at the offices of the Acquiror, 13980 Jane Street, King City, Ontario, L7B 1A3,
Canada, on the third business day after the Acquiror Stockholder Approval or at
such later date as all of the closing conditions set forth in Sections 9 and 10
have been satisfied or waived (the "Closing Date"). At the Closing, each
Shareholder shall deliver to Acquiror any Company Debentures and certificate(s)
evidencing the number of Shares held by such Shareholder, all as set forth in
Exhibit A, along with executed stock powers transferring such Shares to the
Acquiror, against delivery to each Shareholder by Acquiror of a certificate
evidencing the number of Acquiror Shares and the Warrants, if any, to which such
Shareholder is entitled pursuant to Section 2.1, as set forth in Exhibit A,
subject to Section 3.2.

      3.2. Adjustment.

            3.2.1. In the event that aggregate Incremental Available Financing
(as defined below) available to the Company subsequent to the transaction
contemplated in this Agreement, and prior to December 31, 2004, is less than
$3,600,000, then the Shareholders will be issued Cashless Warrants (as defined
below) on a pro-rata basis, to purchase up to 40,000,000 Acquiror Shares
effective January 1, 2005 as full and complete damages. "Incremental Available
Financing," means additional financing made available to the Company post
closing from; a) the sale of 620,000 shares of Wireless Age Commumications, Inc.
common stock held by Acquiror, b) proceeds from the sale of the Battery Business
(as defined below), and c) other similar financing arrangements. "Cashless
Warrants, shall mean warrants to purchase Acquiror Shares at an exercise price
of $0.05 per share, a term to expiry of 2 years and immediately exercisable on a
cashless basis. The "Battery Business", means the Acquiror's wholly owned
subsidiary Prime Battery Products Limited and other intellectual property rights
held by the Acquiror including all battery supply and customer agreements,
sub-license agreements, royalty and services agreements and customer lists.

                                   SECTION IV
            REPRESENTATIONS, WARRANTIES AND COVENANTS OF SHAREHOLDERS

                                     - 7 -
<PAGE>

      4.1. Generally. Each Shareholder, severally and not jointly, hereby
represents, warrants and covenants to the Acquiror as follows:

            4.1.1. Authority. Such Shareholder has the right, power, authority
and capacity to execute and deliver this Agreement and each of the Transaction
Documents to which such Shareholder is a party, to consummate the transactions
contemplated by this Agreement and each of the Transaction Documents to which
such Shareholder is a party, and to perform such Shareholder's obligations under
this Agreement and each of the Transaction Documents to which such Shareholder
is a party. This Agreement has been, and each of the Transaction Documents to
which such Shareholder is a party will be, duly and validly authorized and
approved, executed and delivered by such Shareholder. Assuming this Agreement
has been, and the Transaction Documents have been, duly and validly authorized,
executed and delivered by the parties thereto other than such Shareholder, this
Agreement is, and as of the Closing each of the Transaction Documents to which
such Shareholder is a party will have been, duly authorized, executed and
delivered by such Shareholder and constitutes or will constitute the legal,
valid and binding obligation of such Shareholder, enforceable against such
Shareholder in accordance with its terms, except as such enforcement is limited
by general equitable principles, or by bankruptcy, insolvency and other similar
Laws affecting the enforcement of creditors rights generally.

            4.1.2. No Conflict. Neither the execution or delivery by such
Shareholder of this Agreement or any Transaction Document to which such
Shareholder is a party, nor the consummation or performance by such Shareholder
of the transactions contemplated hereby or thereby will, directly or indirectly,
(a) contravene, conflict with, or result in a violation of any provision of the
Organizational Documents of such Shareholder (if such Shareholder is not a
natural person); (b) contravene, conflict with, constitute a default (or an
event or condition which, with notice or lapse of time or both, would constitute
a default) under, or result in the termination or acceleration of, any agreement
or instrument to which such Shareholder is a party or by which the properties or
assets of such Shareholder are bound; or (c) contravene, conflict with, or
result in a violation of, any Law or Order to which such Shareholder, or any of
the properties or assets of such Shareholder, may be subject.

                                     - 8 -
<PAGE>

            4.1.3. Ownership of Shares and Company Debentures. Such Shareholder
owns, of record and beneficially, and has good, valid and indefeasible title to
and the right to transfer to the Acquiror pursuant to this Agreement, the Shares
and Company Debentures set forth beside such Shareholder's name on Exhibit A
free and clear of any and all Liens. There are no options, rights, voting
trusts, stockholder agreements or any other contracts or understandings to which
such Shareholder is a party or by which such Shareholder or such Shareholder's
Shares or Company Debentures are bound with respect to the issuance, sale,
transfer, voting or registration of such Shareholder's Shares or Company
Debentures. At the Closing, the Acquiror will acquire good, valid and marketable
title to such Shareholder's Shares and Company Debentures free and clear of any
and all Liens.

            4.1.4. Litigation. There is no pending Proceeding against such
Shareholder that challenges, or may have the effect of preventing, delaying or
making illegal, or otherwise interfering with, any of the transactions
contemplated by this Agreement and, to the knowledge of such Shareholder, no
such Proceeding has been threatened, and no event or circumstance exists that is
reasonably likely to give rise to or serve as a basis for the commencement of
any such Proceeding.

            4.1.5. No Brokers or Finders. Except as disclosed in Schedule 4.1.5,
no Person has, or as a result of the transactions contemplated herein will have,
any right or valid claim against such Shareholder for any commission, fee or
other compensation as a finder or broker, or in any similar capacity, and such
Shareholder will indemnify and hold the Acquiror harmless against any liability
or expense arising out of, or in connection with, any such claim.

      4.2. Investment Representations. Each Shareholder, severally and not
jointly, hereby represents and warrants to the Acquiror as follows:

            4.2.1. Acknowledgment. Such Shareholder understands and agrees that
none of the Acquiror Shares, any Additional Shares, the Warrants, and shares of
Acquiror's Common Stock issuable upon exercise of the Warrants (collectively,
the "Transaction Securities") have been registered under the Securities Act or
the securities laws of any state of the U.S. and that the issuance of the
Acquiror Shares is being effected in reliance upon an exemption from
registration afforded either under Section 4(2) for transactions by an issuer
not involving a public offering or Regulation S for offers and sales of
securities outside the U.S. to Persons that are not U.S. persons.

            4.2.2. Status. By its execution of this Agreement, such Shareholder
represents and warrants to the Acquiror as indicated on its signature page to
this Agreement, either that:

                  (a) it is an Accredited Investor; or

                  (b) it is not a U.S. person.

            Such Shareholder understands that the Transaction Securities are
being offered and sold to such Shareholder in reliance upon the truth and
accuracy of the representations, warranties, agreements, acknowledgments and
understandings of such Shareholder set forth in this Agreement, in order that
the Acquiror may determine the applicability and availability of the exemptions
from registration of the Transaction Securities on which the Acquiror is
relying.

                                     - 9 -
<PAGE>

            4.2.3. Additional Representations and Warranties of Accredited
Investors. If such Shareholder indicates that it is an Accredited Investor on
its signature page to this Agreement, then such Shareholder further makes the
representations and warranties to the Acquiror set forth on Exhibit D.

            4.2.4. Additional Representations and Warranties of Non-U.S.
Persons. If such Shareholder indicates that it is not a U.S. person on its
signature page to this Agreement, then such Shareholder further makes the
representations and warranties to the Acquiror set forth on Exhibit E.

      4.3. Stock Legends. Each Shareholder hereby agrees with the Acquiror as
follows:

            4.3.1. Securities Act Legend - Accredited Investors. The
certificates evidencing the shares of Acquiror's Common Stock constituting
Transaction Securities issued to those Shareholders who are Accredited
Investors, and each certificate issued in transfer thereof, shall bear the
following legend:

      THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
      UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY STATE
      SECURITIES LAWS AND NEITHER SUCH SECURITIES NOR ANY INTEREST THEREIN MAY
      BE OFFERED, SOLD, PLEDGED, ASSIGNED OR OTHERWISE TRANSFERRED EXCEPT (1)
      PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT
      AND APPLICABLE STATE SECURITIES LAWS OR (2) PURSUANT TO AN AVAILABLE
      EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND
      APPLICABLE STATE SECURITIES LAWS, IN WHICH CASE THE HOLDER MUST, PRIOR TO
      SUCH TRANSFER, FURNISH TO THE COMPANY AN OPINION OF COUNSEL, WHICH COUNSEL
      AND OPINION ARE REASONABLY SATISFACTORY TO THE COMPANY, THAT SUCH
      SECURITIES MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED OR OTHERWISE
      TRANSFERRED IN THE MANNER CONTEMPLATED PURSUANT TO AN AVAILABLE EXEMPTION
      FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND APPLICABLE
      STATE SECURITIES LAWS.

            4.3.2. Securities Act Legend - Non-U.S. Persons. The certificates
evidencing the shares of Acquiror's Common Stock constituting Transaction
Securities issued to those Shareholders who are not U.S. persons, and each
certificate issued in transfer thereof, shall bear the following legend:

      THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
      UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY STATE
      SECURITIES LAWS AND NEITHER SUCH SECURITIES NOR ANY INTEREST THEREIN MAY
      BE OFFERED, SOLD, PLEDGED, ASSIGNED OR OTHERWISE TRANSFERRED EXCEPT (1) IN
      ACCORDANCE WITH THE PROVISIONS OF REGULATION S PROMULGATED UNDER THE
      SECURITIES ACT, AND BASED ON AN OPINION OF COUNSEL, WHICH COUNSEL AND
      OPINION ARE REASONABLY SATISFACTORY TO THE COMPANY, THAT THE PROVISIONS OF
      REGULATION S HAVE BEEN SATISFIED, (2) PURSUANT TO AN EFFECTIVE
      REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND APPLICABLE STATE
      SECURITIES LAWS OR (3) PURSUANT TO AN AVAILABLE EXEMPTION FROM THE
      REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND APPLICABLE STATE
      SECURITIES LAWS, IN WHICH CASE THE HOLDER MUST, PRIOR TO SUCH TRANSFER,
      FURNISH TO THE COMPANY AN OPINION OF COUNSEL, WHICH COUNSEL AND OPINION
      ARE REASONABLY SATISFACTORY TO THE COMPANY, THAT SUCH SECURITIES MAY BE
      OFFERED, SOLD, PLEDGED, ASSIGNED OR OTHERWISE TRANSFERRED IN THE MANNER
      CONTEMPLATED PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION
      REQUIREMENTS OF THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS.
      HEDGING TRANSACTIONS INVOLVING THE SECURITIES REPRESENTED BY THIS
      CERTIFICATE MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE SECURITIES
      ACT.

                                     - 10 -
<PAGE>

            4.3.3. Other Legends. The Warrants shall bear legends analogous to
those set forth in Sections 4.3.1 and 4.3.2, as Acquiror shall reasonably deem
appropriate. The certificates representing the Transaction Securities, and each
certificate issued in transfer thereof, will also bear any other legend required
under any applicable Law, including, without limitation, any U.S. state
corporate and state securities law, or contract.

            4.3.4. Opinion. Such Shareholder shall not transfer any Transaction
Securities pursuant to Regulation S or absent an effective registration
statement under the Securities Act and applicable state securities law covering
the disposition of such Transaction Securities, without first providing the
Acquiror with an opinion of counsel (which counsel and opinion are reasonably
satisfactory to the Acquiror) to the effect that such transfer will be made in
compliance with Regulation S or will be exempt from the registration and the
prospectus delivery requirements of the Securities Act and the registration or
qualification requirements of any applicable U.S. state securities laws.

            4.3.5. Consent. Such Shareholder understands and acknowledges that
the Acquiror may refuse to transfer the Transaction Securities, unless such
Shareholder complies with this Section 4.3 and any other restrictions on
transferability set forth in Exhibits D and E. Such Shareholder consents to the
Acquiror making a notation on its records and giving instructions to any
transfer agent of the Acquiror's Common Stock in order to implement the
restrictions on transfer of the Transaction Securities.

                                     - 11 -
<PAGE>

                                   SECTION V
            REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY

      The Company represents, warrants and covenants to the Acquiror as follows:

      5.1. Organization and Qualification. Each of the Acquired Companies is
duly organized, validly existing and in good standing under the laws of its
jurisdiction of organization, has all requisite authority and power (corporate
and other), governmental licenses, authorizations, consents and approvals to
carry on its business as presently conducted and to own, hold and operate its
properties and assets as now owned, held and operated by it, except where the
failure to be so organized, existing and in good standing or to have such
authority and power, governmental licenses, authorizations, consents or
approvals would not reasonably be expected to have a Material Adverse Effect.
Each of the Acquired Companies is duly qualified, licensed or domesticated as a
foreign corporation in good standing in each jurisdiction wherein the nature of
its activities or its properties owned, held or operated makes such
qualification, licensing or domestication necessary, except where the failure to
be so duly qualified, licensed or domesticated and in good standing would not
reasonably be expected to have a Material Adverse Effect. Schedule 5.1 sets
forth a true, complete and correct list of each Acquired Company's jurisdiction
of organization and each other jurisdiction in which such Acquired Company
presently conducts its business or owns, holds and operates its properties and
assets.

      5.2. Subsidiaries. Except as set forth on Schedule 5.2, no Acquired
Company owns, directly or indirectly, any equity or other ownership interest in
any corporation, partnership, joint venture or other entity or enterprise.

      5.3. Organizational Documents. The Company has delivered true, correct and
complete copies of the Organizational Documents of each Acquired Company to the
Acquiror prior to the execution of this Agreement, and no action has been taken
to amend or repeal such Organizational Documents. No Acquired Company is in
violation or breach of any of the provisions of its Organizational Documents,
except for such violations or breaches as would not reasonably be expected to
have a Material Adverse Effect.

      5.4. Authorization. The Company has all requisite authority and power
(corporate and other), governmental licenses, authorizations, consents and
approvals to enter into this Agreement and each of the Transaction Documents to
which the Company is a party, to consummate the transactions contemplated by
this Agreement and each of the Transaction Documents to which the Company is a
party and to perform its obligations under this Agreement and each of the
Transaction Documents to which the Company is a party. The execution, delivery
and performance by the Company of this Agreement and each of the Transaction
Documents to which the Company is a party and the recording of the transfer of
the Shares have been duly authorized by all necessary corporate action and do
not require from the Company Board or the Shareholders any consent or approval
that has not been validly and lawfully obtained. The execution, delivery and
performance by the Company of this Agreement and each of the Transaction
Documents to which the Company is a party and the recording of the transfer of
the Shares and the Company Debentures requires no authorization, consent,
approval, license, exemption of or filing or registration with any Governmental
Authority or other Person.

                                     - 12 -
<PAGE>

      5.5. No Violation. Neither the execution or delivery by the Company of
this Agreement or any Transaction Document to which the Company is a party, nor
the consummation or performance by the Company of the transactions contemplated
hereby or thereby will, directly or indirectly, (a) contravene, conflict with,
or result in a violation of any provision of the Organizational Documents of any
Acquired Company; (b) contravene, conflict with, constitute a default (or an
event or condition which, with notice or lapse of time or both, would constitute
a default) under, or result in the termination or acceleration of, or result in
the imposition or creation of any Lien under, any agreement or instrument to
which any Acquired Company is a party or by which the properties or assets of
any Acquired Company are bound; (c) contravene, conflict with, or result in a
violation of, any Law or Order to which any Acquired Company, or any of the
properties or assets owned or used by any Acquired Company, may be subject; or
(d) contravene, conflict with, or result in a violation of, the terms or
requirements of, or give any Governmental Authority the right to revoke,
withdraw, suspend, cancel, terminate or modify, any licenses, permits,
authorizations, approvals, franchises or other rights held by any Acquired
Company or that otherwise relate to the business of, or any of the properties or
assets owned or used by, any Acquired Company, except, in the case of clause
(b), (c) or (d), for any such contraventions, conflicts, violations, or other
occurrences which would not reasonably be expected to have a Material Adverse
Effect.

      5.6. Binding Obligations. Assuming this Agreement has and as of the
Closing the Transaction Documents will have been duly and validly authorized,
executed and delivered by the parties thereto other than the Company, this
Agreement has been, and as of the Closing each of the Transaction Documents to
which the Company is a party will be, duly authorized, executed and delivered by
the Company and constitutes or will constitute, as the case may be, the legal,
valid and binding obligations of the Company, enforceable against the Company in
accordance with its terms, except as such enforcement is limited by general
equitable principles, or by bankruptcy, insolvency and other similar Laws
affecting the enforcement of creditors rights generally.

      5.7. Capitalization and Related Matters.

            5.7.1. Capitalization. The authorized capital stock of the Company
consists of an unlimited number of shares of Common Stock, of which 24,983,770
shares are issued and are outstanding. There are $1,200,000 Canadian Dollars
aggregate principal amount of Company Debentures outstanding, plus accrued and
unpaid interest thereon, which are convertible, in the aggregate, into 5,454,545
shares of Common Stock. There are warrants issuable pursuant to the Company
Debentures upon the conversion thereof on a half warrant for each share of
Company Common Stock issued basis, exercisable at CAD$0.60 per share (the
"Company Warrants"). There are also 2,000,000 shares of Company Common Stock
reserved for issuance under Company Stock Options (the "Company Stock Options")
of which 2,000,000 have been granted and 2,000,000 remain unexercised. At
Closing the Company Stock Options will be cancelled and replaced by options
granted under the proposed Acquiror Stock Option Plan. Other than the Company
Debentures, the Company Stock Options and Company Warrants, there are no
outstanding or authorized options, warrants, purchase agreements, participation
agreements, subscription rights, conversion rights, exchange rights or other
securities or contracts that could require the Company to issue, sell or
otherwise cause to become outstanding any of its authorized but unissued shares
of capital stock or any Equity Security or to create, authorize, issue, sell or
otherwise cause to become outstanding any new class of capital stock. There are
no outstanding stockholders' agreements, voting trusts or arrangements,
registration rights agreements, rights of first refusal or other contracts
pertaining to the capital stock of the Company. The Shares and the Company
Debentures are duly authorized, validly issued, fully paid and nonassessable and
have not been issued in violation of any preemptive or similar rights of any
Person or in violation of any Law.

                                     - 13 -
<PAGE>

            5.7.2. No Redemption Requirements. Except as set forth in Schedule
5.7.2, there are no outstanding contractual obligations (contingent or
otherwise) of the Company to retire, repurchase, redeem or otherwise acquire any
outstanding shares of capital stock of, or other ownership interests in, the
Company or to provide funds to or make any investment (in the form of a loan,
capital contribution or otherwise) in any other Person.

            5.7.3. Subsidiaries. The capitalization of each Company Subsidiary
is as set forth on Schedule 5.7.3. The issued and outstanding shares of capital
stock of each Company Subsidiary set forth on such schedule have been duly
authorized and are validly issued and outstanding, fully paid and
non-assessable, and constitute all of the issued and outstanding capital stock
of such Company Subsidiary. The owners of the shares of each of the Company
Subsidiaries set forth on Schedule 5.7.3 own, and have good, valid and
marketable title to, all shares of capital stock of such Company Subsidiaries.
There are no outstanding or authorized options, warrants, purchase agreements,
participation agreements, subscription rights, conversion rights, exchange
rights or other securities or contracts that could require any of the Company
Subsidiaries to issue, sell or otherwise cause to become outstanding any of its
respective authorized but unissued shares of capital stock or Equity Security,
or to create, authorize, issue, sell or otherwise cause to become outstanding
any new class of capital stock. There are no outstanding stockholders'
agreements, voting trusts or arrangements, registration rights agreements,
rights of first refusal or other contracts pertaining to the capital stock of
any of the Company Subsidiaries. None of the outstanding shares of capital stock
of any of the Company Subsidiaries has been issued in violation of any rights of
any Person or in violation of any Law.

      5.8. Financial Statements. Attached as Schedule 5.8 are the Company's
audited consolidated financial statements for the period ended October 31, 2003
and the Company's unaudited consolidated financial statements for the period
ended March 31, 2004, including, in each case, the notes thereto (the "Company
Interim Financial Statements"). The Company Interim Financial Statements: (a)
are in accordance with the books and records of the Acquired Companies; (b)
present fairly the financial condition and the results of operations, changes in
stockholder's equity and cash flow of the Acquired Companies for the periods
therein specified; and (c) have been prepared in accordance with GAAP applied on
a consistent basis during the periods concerned.

      5.9. Shareholders. Exhibit A contains a true and complete list of the
names and addresses of the record and beneficial holders of the Shares and the
Company Debentures. Except as expressly provided in this Agreement, no
Shareholder or holder of any other security of the Company or any other Person
is entitled to any preemptive right, right of first refusal or similar right in
connection with the exchange of the Shares and the Company Debentures or any
other transaction contemplated by this Agreement or the Transaction Documents.
There is no voting trust, agreement or arrangement among any of the Shareholders
affecting the exercise of the voting rights of any Shares.

                                     - 14 -
<PAGE>

      5.10. Compliance with Laws. Except as would not reasonably be expected to
have a Material Adverse Effect: (i) the business and operations of each Acquired
Company have been and are being conducted in accordance with all applicable Laws
and Orders; (ii) no Acquired Company has received notice of any violation (or
any Proceeding involving an allegation of any violation) of any applicable Law
or Order by or affecting such Acquired Company and, to the knowledge of the
Company, no Proceeding involving an allegation of violation of any applicable
Law or Order is threatened or contemplated; and (iii) no Acquired Company is
subject to any obligation or restriction of any kind or character, nor is there,
to the knowledge of the Company, any event or circumstance relating to any
Acquired Company that materially and adversely affects in any way its business,
properties, assets or prospects or that prohibits the Company from entering into
this Agreement or any Transaction Document to which it is a party or would
prevent its performance of or compliance with all or any part of this Agreement
or any Transaction Document to which it is a party or the consummation of the
transactions contemplated hereby and thereby.

      5.11. No Brokers or Finders. Except as disclosed in Schedule 5.11, no
Person has, or as a result of the transactions contemplated herein will have,
any right or valid claim against any Acquired Company for any commission, fee or
other compensation as a finder or broker, or in any similar capacity, and the
Company shall indemnify and hold the Acquiror harmless against any liability or
expense arising out of, or in connection with, any such claim.

      5.12. Employees.

            5.12.1. Schedule 5.12.1 sets forth a true, correct and complete list
of each employee of the Acquired Companies. Except as would not reasonably be
expected to have a Material Adverse Effect, each Acquired Company is in full
compliance with all Laws regarding employment, wages, hours, benefits, the
payment of Taxes, occupational safety and health. No Acquired Company is liable
for the payment of any compensation, damages, Taxes, fines, penalties or other
amounts, however designated, for failure to comply with any of the foregoing
Laws.

            5.12.2. Except as set forth on Schedule 5.12.2, each employee of
each Acquired Company is employed on an at-will basis and no Acquired Company
has any contract with any of its employees which would interfere with such
Acquired Company's ability to discharge its employees.

      5.13. Litigation; Orders. Except as would not reasonably be expected to
have a Material Adverse Effect, there is no Proceeding (whether federal, state,
local or foreign) pending or, to the knowledge of the Company, threatened
against or affecting any Acquired Company or any Acquired Company's properties,
assets, business or employees. To the knowledge of the Company, there is no fact
that might result in or form the basis for any such Proceeding. No Acquired
Company is subject to any Orders.

                                     - 15 -
<PAGE>

      5.14. Interested Party Transactions. Except as disclosed in Schedule 5.14,
no officer, director or stockholder of any Acquired Company or any Affiliate or
"associate" (as such term is defined in Rule 405 of the Commission under the
Securities Act) of any such Person has or has had, either directly or
indirectly, (1) an interest in any Person which (a) furnishes or sells services
or products which are furnished or sold or are proposed to be furnished or sold
by any Acquired Company, or (b) purchases from or sells or furnishes to, or
proposes to purchase from, sell to or furnish any Acquired Company any goods or
services; or (2) a beneficial interest in any contract or agreement to which any
Acquired Company is a party or by which it may be bound or affected.

      5.15. Title to and Condition of Properties. Except as would not reasonably
be expected to have a Material Adverse Effect, each Acquired Company owns (with
good and marketable title in the case of real property) or holds under valid
leases or other rights to use all real property, plants, machinery, equipment
and other personal property necessary for the conduct of its business as
presently conducted, free and clear of all Liens, except Permitted Liens. The
material buildings, plants, machinery and equipment necessary for the conduct of
the business of each Acquired Company as presently conducted are structurally
sound, are in good operating condition and repair and are adequate for the uses
to which they are being put, and none of such buildings, plants, machinery or
equipment is in need of maintenance or repairs, except for ordinary, routine
maintenance and repairs that are not material in nature or cost. The buildings,
plants, machinery, equipment and other personal property of the Acquired
Companies are sufficient for the continued conduct of the Acquired Companies'
businesses after the Closing in substantially the same manner as conducted prior
to the Closing.

      5.16. Board Recommendation; Shareholder Approval. The Company Board, at a
meeting duly called and held, has by unanimous vote of those directors present
(who constituted 100% of the directors then in office), determined that this
Agreement and the transactions contemplated by this Agreement, are advisable and
in the best interests of the Company's Shareholders. The Shareholders, by
unanimous written consent, have approved this Agreement and the transactions
contemplated by this Agreement.

      5.17. Absence of Undisclosed Liabilities. Except as set forth on Schedule
5.17, no Acquired Company has any debt, obligation or liability (whether
accrued, absolute, contingent, liquidated or otherwise, whether due or to become
due, whether or not known to such Acquired Company) arising out of any
transaction entered into at or prior to the Closing, or any act or omission at
or prior to the Closing, except (a) to the extent set forth on or reserved
against on the Company Balance Sheet; or (b) current liabilities incurred and
obligations under agreements entered into, in the usual and ordinary course of
business since October 31, 2003, none of which would reasonably be expected to
have a Material Adverse Effect.

      5.18. Changes. Except as set forth on Schedule 5.18, no Acquired Company
has, since October 31, 2003:

            5.18.1. Ordinary Course of Business. Conducted its business or
entered into any transaction other than in the usual and ordinary course of
business, except for this Agreement.

                                     - 16 -
<PAGE>

            5.18.2. Adverse Changes. Suffered or experienced any change in, or
affecting, its condition (financial or otherwise), properties, assets,
liabilities, business, operations, results of operations or prospects other than
changes, events or conditions in the usual and ordinary course of its business,
none of which would reasonably be expected to have a Material Adverse Effect;

            5.18.3. Loans. Made any loans or advances to any Person other than
travel advances and reimbursement of expenses made to employees, officers and
directors in the ordinary course of business;

            5.18.4. Liens. Created or permitted to exist any Lien on any
material property or asset of the Acquired Companies, other than Permitted
Liens;

            5.18.5. Capital Stock. Issued, sold, disposed of or encumbered, or
authorized the issuance, sale, disposition or encumbrance of, or granted or
issued any option to acquire any shares of its capital stock or any other of its
securities or any Equity Security, or altered the term of any of its outstanding
securities or made any change in its outstanding shares of capital stock or its
capitalization, whether by reason of reclassification, recapitalization, stock
split, combination, exchange or readjustment of shares, stock dividend or
otherwise;

            5.18.6. Dividends. Declared, set aside, made or paid any dividend or
other distribution to any of its stockholders;

            5.18.7. Employees. Materially increased the compensation or other
remuneration or benefits payable or to become payable to any of its directors,
executive officers or employees, except for increases in the ordinary course of
business, or entered into any employment, severance or similar contracts with
any of the foregoing;

            5.18.8. Company Benefit Plans. Adopted, amended or increased the
payments to or benefits under any Company Benefit Plan;

            5.18.9. Material Company Contracts. Entered into, terminated or
modified any Material Company Contract, except for termination upon expiration
in accordance with the terms thereof;

            5.18.10. Claims. Released, waived or cancelled any claims or rights
relating to or affecting such Acquired Company in excess of $10,000 in the
aggregate or instituted or settled any Proceeding involving in excess of $10,000
in the aggregate;

            5.18.11. Discharged Liabilities. Paid, discharged or satisfied any
claim, obligation or liability in excess of $10,000 in the aggregate, except for
liabilities incurred prior to the date of this Agreement in the ordinary course
of business;

            5.18.12. Indebtedness. Created, incurred, assumed or otherwise
become liable for any Indebtedness in excess of $10,000 in the aggregate;

            5.18.13. Guarantees. Guaranteed or endorsed in a material amount any
obligation of any Person;

                                     - 17 -
<PAGE>

            5.18.14. Acquisitions. Acquired the capital stock or other
securities or any ownership interest in, or substantially all of the assets of,
any other Person;

            5.18.15. Accounting. Changed its method of accounting or the
accounting principles or practices used in the preparation of its financial
statements, other than as required by GAAP;

            5.18.16. Intellectual Property. Granted any license, sublicense or
other rights of use with respect to any Intellectual Property of the Acquired
Companies.

            5.18.17. Agreements. Except as set forth on Schedule 5.18.17,
entered into any agreement, or otherwise obligated itself, to do any of the
foregoing.

      5.19. Material Company Contracts.

            5.19.1. The Company has made available to the Acquiror, prior to the
date of this Agreement, true, correct and complete copies of each Material
Company Contract, including each amendment, supplement and modification relating
thereto. Each Material Company Contract is a valid and binding agreement of the
Acquired Company that is party thereto, and is in full force and effect.

            5.19.2. Except as would not reasonably be expected to have a
Material Adverse Effect, no Acquired Company is in breach or default of any
Material Company Contract to which it is a party and, to the knowledge of the
Company, no other party to any Material Company Contract is in breach or default
thereof. No Acquired Company has received notice of the pending or threatened
cancellation, revocation or termination of any Material Company Contract to
which it is a party. There are no renegotiations of, or attempts to renegotiate,
or outstanding rights to renegotiate any material terms of any Material Company
Contract.

      5.20. Tax Matters.

            5.20.1. Except as set forth on Schedule 5.20.1, (a) all material Tax
Returns required to be filed by or on behalf of the Acquired Companies have been
timely filed and all such Tax Returns were (at the time they were filed) and are
true, correct and complete in all material respects; (b) all material Taxes of
each Acquired Company required to have been paid (whether or not reflected on
any Tax Return) have been fully and timely paid, except those Taxes which are
presently being contested in good faith or for which an adequate reserve for the
payment of such Taxes has been established on the Company Balance Sheet; (c) no
waivers of statutes of limitation have been given or requested with respect to
any Acquired Company in connection with any Tax Returns covering such Acquired
Company or with respect to any Taxes payable by it; (d) no Governmental
Authority in a jurisdiction where an Acquired Company does not file Tax Returns
has made a claim, assertion or threat to such Acquired Company that such
Acquired Company is or may be subject to taxation by such jurisdiction; (e) each
Acquired Company has duly and timely collected or withheld, and paid over and
reported to the appropriate Governmental Authority all amounts required to be so
collected or withheld and paid over for all periods under all applicable Laws;
(f) there are no Liens with respect to Taxes on any Acquired Company's property
or assets other than Permitted Liens; (g) there are no Tax rulings, requests for
rulings, or closing agreements relating to any Acquired Company for any period
(or portion of a period) that would affect any period after the date hereof; and
(h) any adjustment of Taxes of an Acquired Company made by a Governmental
Authority in any examination that such Acquired Company is required to report to
the appropriate state, local or foreign taxing authorities has been reported,
and any additional Taxes due with respect thereto have been paid.

                                     - 18 -
<PAGE>

            5.20.2. Each Acquired Company is treated as a corporation for U.S.
federal income tax purposes, and no Acquired Company has made an election under
Treasury Regulation Section 301.7701-3 to be treated as a partnership.

            5.20.3. No Acquired Company is, or has ever been, a controlled
foreign corporation, as that term is defined in Section 957 of the Code and the
Treasury Regulations promulgated thereunder.

            5.20.4. There is no pending Proceeding with respect to any Taxes of
the Acquired Companies, nor, to the knowledge of the Company, is any such
Proceeding threatened. The Company has made available to the Acquiror, prior to
the date of this Agreement, true, correct and complete copies of all Tax
Returns, examination reports and statements of deficiencies assessed or asserted
against or agreed to by the Acquired Companies since their inception and any and
all correspondence with respect to the foregoing.

            5.20.5. No Acquired Company is a party to any Tax allocation or
sharing agreement.

      5.21. Material Assets. The Company Preliminary Financial Statements
reflect, and the Company Audited Financial Statements will reflect, the material
properties and assets (real and personal) owned or leased by each Acquired
Company and necessary for the conduct of its business as presently conducted,
and include all of the operating assets of the Acquired Companies. The Acquired
Companies have good and marketable title to, or a valid leasehold interest in,
such properties and assets, free and clear of all Liens, other than Permitted
Liens. Such properties and assets are sufficient for the continued conduct of
the Acquired Companies' businesses after the Closing in substantially the same
manner as conducted prior to the Closing. No Affiliate of any Acquired Company
or the Shareholders which is not also an Acquired Company owns or otherwise has
any interest in or right to use any properties or assets used or held for use
in, or otherwise arising from or relating to, the business of the Acquired
Companies.

      5.22. Insurance Coverage. The Company has made available to the Acquiror,
prior to the date of this Agreement, true, correct and complete copies of all
insurance policies maintained by each Acquired Company on its properties and
assets. Except as would not reasonably be expected to have a Material Adverse
Effect, all of such policies (a) taken together, provide adequate insurance
coverage for the properties, assets and operations of each Acquired Company for
all risks normally insured against by a Person carrying on the same business as
such Acquired Company, and (b) are sufficient for compliance with all applicable
Laws and Material Company Contracts. All of such policies are valid, outstanding
and in full force and effect and, by their express terms, will continue in full
force and effect following the consummation of the transactions contemplated by
this Agreement. There are no pending claims with respect to any Acquired Company
or its properties or assets under any such insurance policies, and there are no
claims as to which the insurers have notified any Acquired Company that they
intend to deny liability. There is no existing default under any such insurance
policy.

                                     - 19 -
<PAGE>

      5.23. Intellectual Property. Each Acquired Company owns, licenses or
otherwise has the legal right to use all Intellectual Property used in its
business as currently conducted. The Company is not aware of any violation or
infringement of any of the Intellectual Property of any Acquired Company.
Neither the execution nor delivery of this Agreement or the agreements
contemplated by this Agreement, nor the carrying on of the Acquired Companies'
businesses by the employees of the Acquired Companies, nor the conduct of the
Acquired Companies' businesses as proposed will, to the knowledge of the
Company, conflict with or result in a breach of the terms, conditions, or
provisions of, or constitute a default under, any contract, covenant, or
instrument under which any of such employees is now obligated which would have a
material impact on the ability of the Company to conduct its business. To the
knowledge of the Company, it is not necessary for any Acquired Company to use in
its business any inventions, trade secrets or proprietary information of any of
its officers, employees, consultants or persons it currently intends to hire
made prior to their employment with any such Acquired Company, except for
inventions, trade secrets or proprietary information that have been assigned to
such Acquired Company.

      5.24. Employee Benefits. Except as set forth on Schedule 5.24, no Acquired
Company has in effect any employment agreements, consulting agreements, deferred
compensation, pension or retirement agreements or arrangements, bonus,
severance, incentive or profit-sharing plans or arrangements, or labor or
collective bargaining agreements, written or oral. To the knowledge of the
Company, none of the officers or other key employees of any Acquired Company
presently intends to terminate his or her employment. Each Acquired Company is
in compliance in all material respects with all applicable laws and regulations
relating to labor, employment, fair employment practices, terms and conditions
of employment, and wages and hours. Upon termination of the employment of any
employees, no Acquired Company will be obligated to provide advance notice of
termination of employment or be liable to any such employees for so-called
"severance pay" or retiree health benefits. Each Acquired Company is in material
compliance with the terms of all plans, and programs relating to employment,
including, without limitation, those plans and programs listed on Schedule 5.24,
and each such plan or program is in compliance with all of the requirements and
provisions of the Employee Retirement Income Security Act of 1974, as amended
("ERISA") and the Code and is terminable in the discretion of such Acquired
Company without liability to such Acquired Company upon or following such
termination. No such plan, or program has engaged in any "prohibited
transaction" as defined in Section 4975 of the Code or has incurred any
"accumulated funding deficiency" as defined in Section 302 of ERISA, nor has any
reportable event as defined in Section 4043(b) of ERISA occurred with respect to
any such plan or program. No Acquired Company has ever maintained, sponsored or
contributed to any plan which is subject to Title IV of ERISA or Section 412 of
the Code. At no time has any Acquired Company contributed to or been obligated
to contribute to any "multi-employer plan" as defined in Section 3(37) of ERISA.
With respect to each plan listed on Schedule 5.24, all required filings,
including all filings required to be made with the United States Department of
Labor and Internal Revenue Service, have been timely filed.

      5.25. Environmental and Safety Matters.

                                     - 20 -
<PAGE>

            5.25.1. Each Acquired Company has at all times been and is in
material compliance with all Environmental Laws applicable to such Acquired
Company.

            5.25.2. There are no Proceedings pending or threatened against any
Acquired Company alleging the violation of any Environmental Law or
Environmental Permit applicable to such Acquired Company, or alleging that such
Acquired Company is a potentially responsible party for any environmental site
contamination.

            5.25.3. Neither this Agreement nor the consummation of the
transactions contemplated by this Agreement shall impose any obligations to
notify or obtain the consent of any Governmental Authority or third Persons
under any Environmental Laws applicable to any Acquired Company.

      5.26. Product Liability and Recalls.

            5.26.1. Except as would not reasonably be expected to have a
Material Adverse Effect, there are no losses, damages, expenses or liabilities
(whether absolute, accrued, contingent or otherwise) against any Acquired
Company asserted and arising out of or based upon incidents occurring on or
prior to the date hereof with respect to: (a) any product liability or any
similar claim that relates to any of the products designed, developed,
manufactured, produced, distributed, supplied or sold by such Acquired Company
to others; (b) the delivery of faulty services; or (c) any claim for the breach
of any express or limited product warranty, or any similar claim that relates to
any product designed, developed, manufactured, produced, distributed, supplied
or sold, or any service delivered, by such Acquired Company, and the Company has
no knowledge of any product or service defects which could give rise to any such
losses, claims, damages, expenses or liabilities.

            5.26.2. To the knowledge of the Company, there exists no basis for
the recall, withdrawal or suspension by order of any Governmental Authority of
any product designed, developed, manufactured, produced, distributed, supplied
or sold by any Acquired Company. To the knowledge of the Company, there are no
defects in the designs, specifications, or process with respect to any product
designed, manufactured, sold, supplied or distributed by any Acquired Company
that would give rise to any liability. There has been no recall, withdrawal, or
suspension from the market of any product designed, manufactured, sold, supplied
or distributed by any Acquired Company.

                                   SECTION VI
            REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE ACQUIROR

      The Acquiror represents, warrants and covenants to the Shareholders and
the Company as follows:

      6.1. Organization and Qualification. Each of the Acquiror Companies is
duly organized, validly existing and in good standing under the laws of its
jurisdiction of organization, has all requisite authority and power (corporate
and other), governmental licenses, authorizations, consents and approvals to
carry on its business as presently conducted and to own, hold and operate its
properties and assets as now owned, held and operated by it, except where the
failure to be so organized, existing and in good standing, or to have such
authority and power, governmental licenses, authorizations, consents or
approvals would not reasonably be expected to have a Material Adverse Effect.
Each of the Acquiror Companies is duly qualified, licensed or domesticated as a
foreign corporation in good standing in each jurisdiction wherein the nature of
its activities or its properties owned, held or operated makes such
qualification, licensing or domestication necessary, except where the failure to
be so duly qualified, licensed or domesticated and in good standing would not
reasonably be expected to have a Material Adverse Effect. Schedule 6.1 sets
forth a true, complete and correct list of each Acquiror Company's jurisdiction
of organization and each other jurisdiction in which such Acquiror Company
presently conducts its business or owns, holds and operates its properties and
assets.

                                     - 21 -
<PAGE>

      6.2. Subsidiaries. Except as set forth on Schedule 6.2, no Acquiror
Company owns, directly or indirectly, any equity or other ownership interest in
any corporation, partnership, joint venture or other entity or enterprise.

      6.3. Organizational Documents. Acquiror has delivered true, correct and
complete copies of the Organizational Documents of each Acquiror Company to the
Company prior to the execution of this Agreement, and no action has been taken
to amend or repeal such Organizational Documents. No Acquiror Company is in
violation or breach of any of the provisions of its Organizational Documents,
except for such violations or breaches as would not reasonably be expected to
have a Material Adverse Effect.

      6.4. Authorization. The Acquiror has all requisite authority and power
(corporate and other), governmental licenses, authorizations, consents and
approvals to enter into this Agreement and each of the Transaction Documents to
which the Acquiror is a party, to consummate the transactions contemplated by
this Agreement and each of the Transaction Documents to which the Acquiror is a
party and to perform its obligations under this Agreement and each of the
Transaction Documents to which the Acquiror is a party. Except as set forth on
Schedule 6.4, the execution, delivery and performance by the Acquiror of this
Agreement and each of the Transaction Documents to which the Acquiror is a party
have been duly authorized by all necessary corporate action and do not require
from the Acquiror Board or the stockholders of the Acquiror any consent or
approval that has not been validly and lawfully obtained. The execution,
delivery and performance by the Acquiror of this Agreement and each of the
Transaction Documents to which the Acquiror is a party requires no
authorization, consent, approval, license, exemption of or filing or
registration with any Governmental Authority or other Person other than (a) the
filing of a Definitive Proxy Statement and related materials with the Commission
in connection with the Required Acquiror Stockholder Actions; (b) the filing of
a Certificate of Amendment to Acquiror's Certificate of Incorporation with the
Secretary of State of Delaware which, among other things, increases the
authorized number of shares of Acquiror's Common Stock to 400,000,000 shares
(the "Charter Amendment"); and (c) such other customary filings with the
Commission for transactions of the type contemplated by this Agreement.

      6.5. No Violation. Neither the execution or delivery by the Acquiror of
this Agreement or any Transaction Document to which the Acquiror is a party, nor
the consummation or performance by the Acquiror of the transactions contemplated
hereby or thereby will, directly or indirectly, (a) contravene, conflict with,
or result in a violation of any provision of the Organizational Documents of any
Acquiror Company; (b) contravene, conflict with, constitute a default (or an
event or condition which, with notice or lapse of time or both, would constitute
a default) under, or result in the termination or acceleration of, or result in
the imposition or creation of any Lien under, any agreement or instrument to
which any Acquiror Company is a party or by which the properties or assets of
any Acquiror Company are bound; (c) contravene, conflict with, or result in a
violation of, any Law or Order to which any Acquiror Company, or any of the
properties or assets owned or used by any Acquiror Company, may be subject; or
(d) contravene, conflict with, or result in a violation of, the terms or
requirements of, or give any Governmental Authority the right to revoke,
withdraw, suspend, cancel, terminate or modify, any licenses, permits,
authorizations, approvals, franchises or other rights held by any Acquiror
Company or that otherwise relate to the business of, or any of the properties or
assets owned or used by, any Acquiror Company, except, in the case of clause
(b), (c), or (d), for any such contraventions, conflicts, violations, or other
occurrences which would not reasonably be expected to have a Material Adverse
Effect.

                                     - 23 -
<PAGE>

      6.6. Binding Obligations. Assuming this Agreement has been and as of the
Closing the Transaction Documents will have been duly and validly authorized,
executed and delivered by the parties thereto other than the Acquiror, this
Agreement has been, and as of the Closing each of the Transaction Documents to
which the Acquiror is a party will be, duly authorized, executed and delivered
by the Acquiror and constitutes or will constitute, as the case may be, the
legal, valid and binding obligations of the Acquiror, enforceable against the
Acquiror in accordance with its terms, except as such enforcement is limited by
general equitable principles, or by bankruptcy, insolvency and other similar
Laws affecting the enforcement of creditors rights generally.

      6.7. Securities Laws. Assuming the accuracy of the representations and
warranties of the Shareholders contained in Section 4 and Exhibits D and E, the
issuance of the Acquiror Shares pursuant to this Agreement have been or, on or
prior to the Closing Date, will be (a) exempt from the registration and
prospectus delivery requirements of the Securities Act, (b) registered or
qualified (or are exempt from registration and qualification) under the
registration permit or qualification requirements of all applicable state
securities laws, and (c) accomplished in conformity with all other applicable
federal and state securities laws.

      6.8. Capitalization and Related Matters.

            6.8.1. Capitalization. The authorized capital stock of the Acquiror
consists of 150,000,000 shares of the Acquiror's Common Stock, of which (a)
82,704,871 shares are issued and outstanding, and (b) 11,735,589 shares are
reserved for issuance upon the exercise of outstanding options and warrants to
purchase the Acquiror's Common Stock. All issued and outstanding shares of the
Acquiror's Common Stock are duly authorized, validly issued, fully paid and
nonassessable, and have not been issued in violation of any preemptive or
similar rights. Except as disclosed in Schedule 6.8.1 or the SEC Documents,
there are no outstanding or authorized options, warrants, purchase agreements,
participation agreements, subscription rights, conversion rights, exchange
rights or other securities or contracts that could require the Acquiror to
issue, sell or otherwise cause to become outstanding any of its authorized but
unissued shares of capital stock or any securities convertible into,
exchangeable for, or carrying a right or option to purchase, shares of capital
stock or to create, authorize, issue, sell or otherwise cause to become
outstanding any new class of capital stock. There are no outstanding
stockholders' agreements, voting trusts or arrangements, registration rights
agreements, rights of first refusal or other contracts pertaining to the capital
stock of the Acquiror.

                                     - 24 -
<PAGE>

            6.8.2. No Redemption Requirements. Except as set forth in Schedule
6.8.2 or in the SEC Documents, there are no outstanding contractual obligations
(contingent or otherwise) of the Acquiror to retire, repurchase, redeem or
otherwise acquire any outstanding shares of capital stock of, or other ownership
interests in, the Acquiror or to provide funds to or make any investment (in the
form of a loan, capital contribution or otherwise) in any other Person.

            6.8.3. Duly Authorized. Assuming the occurrence of the Required
Acquiror Stockholder Actions and the filing of the Charter Amendment, the
issuance of the Acquiror Shares will be duly authorized and, upon delivery to
the Shareholders of certificates therefor in accordance with the terms of this
Agreement, the Acquiror Shares will have been validly issued, fully paid and
nonassessable, and will be free of preemptive rights and will be free and clear
of all Liens and restrictions, other than Liens created by the Shareholders and
restrictions on transfer imposed by this Agreement and the Securities Act.

            6.8.4. Subsidiaries. The capitalization of each Acquiror Subsidiary
is as set forth on Schedule 6.8.4. The issued and outstanding shares of capital
stock of each Acquiror Subsidiary set forth on such schedule have been duly
authorized and are validly issued and outstanding, fully paid and
non-assessable, and constitute all of the issued and outstanding capital stock
of such Acquiror Subsidiary. The owners of the shares of each of the Acquiror
Subsidiaries set forth on Schedule 6.8.4 own, and have good, valid and
marketable title to, all shares of capital stock of such Acquiror Subsidiaries.
There are no outstanding or authorized options, warrants, purchase agreements,
participation agreements, subscription rights, conversion rights, exchange
rights or other securities or contracts that could require any of the Acquiror
Subsidiaries to issue, sell or otherwise cause to become outstanding any of its
respective authorized but unissued shares of capital stock or Equity Securities
or to create, authorize, issue, sell or otherwise cause to become outstanding
any new class of capital stock. There are no outstanding stockholders'
agreements, voting trusts or arrangements, registration rights agreements,
rights of first refusal or other contracts pertaining to the capital stock of
any of the Acquiror Subsidiaries. None of the outstanding shares of capital
stock of any of the Acquiror Subsidiaries has been issued in violation of any
rights of any Person or in violation of any Law.

            6.8.5. Financial Statements. The Acquiror Balance Sheet, and audited
consolidated statements of income and retained earnings and cash flows of
Acquiror for the year ended December 31, 2003 (collectively with the Acquiror
Balance Sheet, the "Acquiror Financial Statements"), are contained in the SEC
Documents. The Acquiror Financial Statements have been prepared in accordance
with GAAP applied on a consistent basis during the periods involved and fairly
present in all material respects the consolidated financial position of Acquiror
as of the dates thereof and its consolidated results of operations and cash
flows for the periods then ended.

      6.9. Compliance with Laws. Except as would not reasonably be expected to
have a Material Adverse Effect: (i) the business and operations of each Acquiror
Company have been and are being conducted in accordance with all applicable Laws
and Orders; (ii) no Acquiror Company has received notice of any violation (or
any Proceeding involving an allegation of any violation) of any applicable Law
or Order by or affecting such Acquiror Company and, to the knowledge of the
Acquiror, no Proceeding involving an allegation of violation of any applicable
Law or Order is threatened or contemplated; and (iii) no Acquiror Company is
subject to any obligation or restriction of any kind or character, nor is there,
to the knowledge of the Acquiror, any event or circumstance relating to any
Acquiror Company that materially and adversely affects in any way its business,
properties, assets or prospects or that prohibits the Acquiror from entering
into this Agreement or any Transaction Document to which it is a party or would
prevent its performance of or compliance with all or any part of this Agreement
or any Transaction Document to which it is a party or the consummation of the
transactions contemplated hereby or thereby.

                                     - 25 -
<PAGE>

      6.10. No Brokers or Finders. Except as disclosed in Schedule 6.10, no
Person has, or as a result of the transactions contemplated herein will have,
any right or valid claim against any Acquiror Company for any commission, fee or
other compensation as a finder or broker, or in any similar capacity, and the
Acquiror will indemnify and hold the Company harmless against any liability or
expense arising out of, or in connection with, any such claim.

      6.11. Employees.

            6.11.1. Except as set forth on Schedule 6.11.1, the Acquiror
Companies have no employees, independent contractors or other Persons providing
research or other services to them. Except as would not reasonably be expected
to have a Material Adverse Effect, each Acquiror Company is in full compliance
with all Laws regarding employment, wages, hours, benefits, equal opportunity,
collective bargaining, the payment of Social Security and other taxes,
occupational safety and health and plant closing. No Acquiror Company is liable
for the payment of any compensation, damages, taxes, fines, penalties or other
amounts, however designated, for failure to comply with any of the foregoing
Laws.

            6.11.2. Except as set forth on Schedule 6.11.2, each employee of
each Acquiror Company is employed on an at-will basis and no Acquiror Company
has any contract with any of its employees which would interfere with such
Acquiror Company's ability to discharge its employees.

      6.12. Litigation; Orders. Except as would not reasonably be expected to
have a Material Adverse Effect, there is no Proceeding (whether federal, state,
local or foreign) pending or, to the knowledge of the Acquiror, threatened
against or affecting any Acquiror Company or any Acquiror Company's properties,
assets, business or employees. To the knowledge of the Acquiror, there is no
fact that might result in or form the basis for any such Proceeding. No Acquiror
Company is subject to any Orders.

      6.13. Interested Party Transactions. Except as disclosed in Schedule 6.13,
no officer, director or stockholder of any Acquiror Company or any Affiliate or
"associate" (as such term is defined in Rule 405 of the Commission under the
Securities Act) of any such Person has or has had, either directly or
indirectly, (1) an interest in any Person which (a) furnishes or sells services
or products which are furnished or sold or are proposed to be furnished or sold
by any Acquiror Company, or (b) purchases from or sells or furnishes to, or
proposes to purchase from, sell to or furnish any Acquiror Company any goods or
services; or (2) a beneficial interest in any contract or agreement to which any
Acquiror Company is a party or by which it may be bound or affected.

                                     - 26 -
<PAGE>

      6.14. Title to and Condition of Properties. Except as would not reasonably
be expected to have a Material Adverse Effect, each Acquiror Company owns (with
good and marketable title in the case of real property) or holds under valid
leases or other rights to use all real property, plants, machinery, equipment
and other personal property necessary for the conduct of its business as
presently conducted, free and clear of all Liens, except Permitted Liens. The
material buildings, plants, machinery and equipment necessary for the conduct of
the business of each Acquiror Company as presently conducted are structurally
sound, are in good operating condition and repair and are adequate for the uses
to which they are being put, and none of such buildings, plants, machinery or
equipment is in need of maintenance or repairs, except for ordinary, routine
maintenance and repairs that are not material in nature or cost.

      6.15. Absence of Undisclosed Liabilities. Except as set forth on Schedule
6.15 or in the SEC Documents, no Acquiror Company has any debt, obligation or
liability (whether accrued, absolute, contingent, liquidated or otherwise,
whether due or to become due, whether or not known to such Acquiror Company)
arising out of any transaction entered into at or prior to the Closing, or any
act or omission at or prior to the Closing, except (a) to the extent set forth
on or reserved against on the Acquiror Balance Sheet, or (b) current liabilities
incurred and obligations under agreements entered into, in the usual and
ordinary course of business since December 31, 2003, none of which would
reasonably be expected to have a Material Adverse Effect.

      6.16. Changes. Except as set forth on Schedule 6.16 or in the SEC
Documents, no Acquiror Company has, since December 31, 2003:

            6.16.1. Ordinary Course of Business. Conducted its business or
entered into any transaction other than in the usual and ordinary course of
business, except for this Agreement.

            6.16.2. Adverse Changes. Suffered or experienced any change in, or
affecting, its condition (financial or otherwise), properties, assets,
liabilities, business, operations, results of operations or prospects other than
changes, events or conditions in the usual and ordinary course of its business,
none of which would reasonably be expected to have a Material Adverse Effect;

            6.16.3. Loans. Made any loans or advances to any Person other than
travel advances and reimbursement of expenses made to employees, officers and
directors in the ordinary course of business;

            6.16.4. Liens. Created or permitted to exist any Lien on any
material property or asset of the Acquiror Companies, other than Permitted
Liens;

            6.16.5. Capital Stock. Issued, sold, disposed of or encumbered, or
authorized the issuance, sale, disposition or encumbrance of, or granted or
issued any option to acquire any shares of its capital stock or any other of its
securities or any Equity Security, or altered the term of any of its outstanding
securities or made any change in its outstanding shares of capital stock or its
capitalization, whether by reason of reclassification, recapitalization, stock
split, combination, exchange or readjustment of shares, stock dividend or
otherwise;

                                     - 27 -
<PAGE>

            6.16.6. Dividends. Declared, set aside, made or paid any dividend or
other distribution to any of its stockholders;

            6.16.7. Material Acquiror Contracts. Entered into, terminated or
modified any Material Acquiror Contract, except for termination upon expiration
in accordance with the terms thereof;

            6.16.8. Claims. Released, waived or cancelled any claims or rights
relating to or affecting such Acquiror Company in excess of $10,000 in the
aggregate or instituted or settled any Proceeding involving in excess of $10,000
in the aggregate;

            6.16.9. Discharged Liabilities. Paid, discharged or satisfied any
claim, obligation or liability in excess of $10,000 in the aggregate, except for
liabilities incurred prior to the date of this Agreement in the ordinary course
of business;

            6.16.10. Indebtedness. Created, incurred, assumed or otherwise
become liable for any Indebtedness in excess of $10,000 in the aggregate;

            6.16.11. Guarantees. Guaranteed or endorsed in a material amount any
obligation of any Person;

            6.16.12. Acquisitions. Acquired the capital stock or other
securities or any ownership interest in, or substantially all of the assets of,
any other Person;

            6.16.13. Accounting. Changed its method of accounting or the
accounting principles or practices used in the preparation of its financial
statements, other than as required by GAAP;

            6.16.14. Agreements. Except as set forth on Schedule 6.16.14 or in
the SEC Documents, entered into any agreement, or otherwise obligated itself, to
do any of the foregoing.

      6.17. Material Acquiror Contracts.

            6.17.1. Except to the extent filed with the SEC Documents, the
Acquiror has made available to the Company, prior to the date of this Agreement,
true, correct and complete copies of each written Material Acquiror Contract,
including each amendment, supplement and modification thereto. Each Material
Acquiror Contract is a valid and binding agreement of the Acquiror Company that
is party thereto, and is in full force and effect.

            6.17.2. No Defaults. Except as would not reasonably be expected to
have a Material Adverse Effect, no Acquiror Company is in breach or default of
any Material Acquiror Contract to which it is a party and, to the knowledge of
the Acquiror, no other party to any Material Acquiror Contract is in breach or
default thereof. No Acquiror Company has received notice of the pending or
threatened cancellation, revocation or termination of any Material Acquiror
Contract to which it is a party. There are no renegotiations of, or attempts to
renegotiate, or outstanding rights to renegotiate any material terms of any
Material Acquiror Contract.

                                     - 28 -
<PAGE>

      6.18. Tax Matters.

            6.18.1. Except as set forth on Schedule 6.18.1, (a) all material Tax
Returns required to be filed by or on behalf of the Acquiror Companies have been
timely filed and all such Tax Returns were (at the time they were filed) and are
true, correct and complete in all material respects; (b) all material Taxes of
each Acquiror Company required to have been paid (whether or not reflected on
any Tax Return) have been fully and timely paid, except those Taxes which are
presently being contested in good faith or for which an adequate reserve for the
payment of such Taxes has been established on the Acquiror Balance Sheet; (c) no
waivers of statutes of limitation have been given or requested with respect to
any Acquiror Company in connection with any Tax Returns covering such Acquiror
Company or with respect to any Taxes payable by it; (d) no Governmental
Authority in a jurisdiction where an Acquiror Company does not file Tax Returns
has made a claim, assertion or threat to such Acquiror Company that such
Acquiror Company is or may be subject to taxation by such jurisdiction; (e) each
Acquiror Company has duly and timely collected or withheld, paid over and
reported to the appropriate Governmental Authority all amounts required to be so
collected or withheld and paid over for all periods under all applicable laws;
(f) there are no Liens with respect to Taxes on any Acquiror Company's property
or assets other than Permitted Liens; (g) there are no Tax rulings, requests for
rulings, or closing agreements relating to any Acquiror Company for any period
(or portion of a period) that would affect any period after the date hereof; and
(h) any adjustment of Taxes of an Acquiror Company made by a Governmental
Authority in any examination that such Acquiror Company is required to report to
the appropriate state, local or foreign taxing authorities has been reported,
and any additional Taxes due with respect thereto have been paid.

            6.18.2. Each Acquiror Company is treated as a corporation for U.S.
federal income tax purposes, and no Acquiror Company has made an election under
Treasury Regulation Section 301.7701-3 to be treated as a partnership.

            6.18.3. No Acquiror Company is, or has ever been, a controlled
foreign corporation, as that term is defined in Section 957 of the Code and the
Treasury Regulations promulgated thereunder.

            6.18.4. There is no pending Proceeding with respect to any Taxes of
the Acquiror Companies, nor, to the knowledge of the Acquiror, is any such
Proceeding threatened. The Acquiror has made available to the Company, prior to
the date of this Agreement, true, correct and complete copies of all Tax
Returns, examination reports and statements of deficiencies assessed or asserted
against or agreed to by the Acquiror Companies since their inception and any and
all correspondence with respect to the foregoing.

            6.18.5. No Acquiror Company is a party to any Tax allocation or
sharing agreement.

      6.19. Material Assets. The financial statements of the Acquiror set forth
in the SEC Documents reflect the material properties and assets (real and
personal) owned or leased by each Acquiror Company and necessary for the conduct
of its business as presently conducted, and include all of the operating assets
of the Acquiror Companies. The Acquiror Companies have good and marketable title
to, or a valid leasehold interest in, such properties and assets, free and clear
of all Liens, other than Permitted Liens. Such properties and assets are
sufficient for the continued conduct of the Acquiror Companies' businesses after
the Closing in substantially the same manner as conducted prior to the Closing.
No Affiliate of any Acquiror Company which is not also an Acquiror Company owns
or otherwise has any interest in or right to use any properties or assets used
or held for use in, or otherwise arising from or relating to, the business of
the Acquiror Companies.

                                     - 29 -
<PAGE>

      6.20. Insurance Coverage. The Acquiror has made available to the Company,
prior to the date of this Agreement, true, correct and complete copies of all
insurance policies maintained by each Acquiror Company on its properties and
assets. Except as would not reasonably be expected to have a Material Adverse
Effect, all of such policies (a) taken together, provide adequate insurance
coverage for the properties, assets and operations of each Acquiror Company for
all risks normally insured against by a Person carrying on the same business as
such Acquiror Company, and (b) are sufficient for compliance with all applicable
Laws and Material Acquiror Contracts. All of such policies are valid,
outstanding and in full force and effect and, by their express terms, will
continue in full force and effect following the consummation of the transactions
contemplated by this Agreement. There are no pending claims with respect to any
Acquiror Company or its properties or assets under any such insurance policies,
and there are no claims as to which the insurers have notified any Acquiror
Company that they intend to deny liability. There is no existing default under
any such insurance policies.

      6.21. Intellectual Property. Each Acquiror Company owns, licenses or
otherwise has the legal right to use all Intellectual Property for its business
as currently conducted. The Acquiror is not aware of any violation or
infringement of any of the Intellectual Property of any Acquiror Company.
Neither the execution nor delivery of this Agreement or the agreements
contemplated by this Agreement, nor the carrying on of the Acquiror Companies'
businesses by the employees of the Acquiror Companies, nor the conduct of the
Acquiror Companies' businesses as proposed will, to the knowledge of Acquiror,
conflict with or result in a breach of the terms, conditions, or provisions of,
or constitute a default under, any contract, covenant, or instrument under which
any of such employees is now obligated which would have a material impact on the
ability of the Acquiror to conduct its business. To the knowledge of the
Acquiror, it is not necessary for any Acquiror Company to utilize in its
business any inventions, trade secrets or proprietary information of any of its
officers, employees, consultants or persons it currently intends to hire made
prior to their employment with any such Acquiror Company, except for inventions,
trade secrets or proprietary information that have been assigned to such
Acquiror Company.

      6.22. SEC Documents. Except as set forth on Schedule 6.22, the Acquiror
has filed all reports required to be filed by it under the Exchange Act,
including pursuant to Section 13(a) or 15(d) thereof, for the three years
preceding the date hereof (or such shorter period as the Acquiror was required
by law to file such material) (the foregoing materials being collectively
referred to herein as the "SEC Documents"). The SEC Documents comply in all
material respects with the requirements of the Securities Act and the Exchange
Act and the rules and regulations of the Commission promulgated thereunder. All
material agreements to which the Acquiror is a party or to which the property or
assets of the Acquiror are subject have been appropriately filed as exhibits to
the SEC Documents as and to the extent required under the Exchange Act.

                                     - 30 -
<PAGE>

      6.23. Employee Benefits. Except as set forth on Schedule 6.23, no Acquiror
Company has in effect any employment agreements, consulting agreements, deferred
compensation, pension or retirement agreements or arrangements, bonus,
severance, incentive or profit-sharing plans or arrangements, or labor or
collective bargaining agreements, written or oral. To the knowledge of the
Acquiror, none of the officers or other key employees of any Acquiror Company
presently intends to terminate his or her employment. Each Acquiror Company is
in compliance in all material respects with all applicable laws and regulations
relating to labor, employment, fair employment practices, terms and conditions
of employment, and wages and hours. Upon termination of the employment of any
employees, no Acquiror Company will be obligated to provide advance notice of
termination of employment or be liable to any such employees for so-called
"severance pay" or retiree health benefits. Each Acquiror Company is in material
compliance with the terms of all plans, and programs relating to employment,
including, without limitation, those plans and programs listed on Schedule 6.23,
and each such plan or program is in compliance with all of the requirements and
provisions of the Employee Retirement Income Security Act of 1974, as amended
("ERISA") and the Code and is terminable in the discretion of such Acquiror
Company without liability to such Acquiror Company upon or following such
termination. No such plan, or program has engaged in any "prohibited
transaction" as defined in Section 4975 of the Code or has incurred any
"accumulated funding deficiency" as defined in Section 302 of ERISA, nor has any
reportable event as defined in Section 4043(b) of ERISA occurred with respect to
any such plan or program. No Acquiror Company has ever maintained, sponsored or
contributed to any plan which is subject to Title IV of ERISA or Section 412 of
the Code. At no time has any Acquiror Company contributed to or been obligated
to contribute to any "multi-employer plan" as defined in Section 3(37) of ERISA.
With respect to each plan listed on Schedule 6.23, all required filings,
including all filings required to be made with the United States Department of
Labor and Internal Revenue Service, have been timely filed.

      6.24. Environmental and Safety Matters.

            6.24.1. Each Acquiror Company has at all times been and is in
material compliance with all Environmental Laws applicable to such Acquiror
Company.

            6.24.2. There are no Proceedings pending or threatened against any
Acquiror Company alleging the violation of any Environmental Law or
Environmental Permit applicable to such Acquiror Company or alleging that such
Acquiror Company is a potentially responsible party for any environmental site
contamination.

            6.24.3. Neither this Agreement nor the consummation of the
transactions contemplated by this Agreement shall impose any obligations to
notify or obtain the consent of any Governmental Authority or third Persons
under any Environmental Laws applicable to any Acquiror Company.

                                     - 31 -
<PAGE>

      6.25. Board Recommendation. The Acquiror Board, at a meeting duly called
and held, has determined that this Agreement and the transactions contemplated
by this Agreement are advisable and in the best interests of the Acquiror's
stockholders and has duly authorized this Agreement and the transactions
contemplated by this Agreement.

                                  SECTION VII
                  COVENANTS OF THE COMPANY AND THE SHAREHOLDERS

      7.1. Access and Investigation. Between the date of this Agreement and the
Closing Date, the Company shall, and shall cause each Company Subsidiary to, (a)
afford the Acquiror and its agents, advisors and attorneys during normal
business hours, full and free access to each Acquired Company's personnel,
properties, contracts, books and records, and other documents and data, (b)
furnish the Acquiror and its agents, advisors and attorneys with copies of all
such contracts, books and records, and other existing documents and data as the
Acquiror may reasonably request, and (c) furnish the Acquiror and its agents,
advisors and attorneys with such additional financial, operating, and other data
and information as the Acquiror may reasonably request.

      7.2. Operation of the Business of the Company.

            7.2.1. Between the date of this Agreement and the Closing Date, the
Company will, and will cause each Company Subsidiary to:

                  (a) conduct its business only in the ordinary course of
            business;

                  (b) use its best efforts to preserve intact its current
            business organization and business relationships, including, without
            limitation, relationships with suppliers, customers, landlords,
            creditors, officers, employees and agents;

                  (c) obtain the prior written consent of the Acquiror prior to
            taking any action of the type specified in Section 5.18 or entering
            into any Material Company Contract;

                  (d) confer with the Acquiror concerning operational matters of
            a material nature; and

                  (e) otherwise report periodically to the Acquiror concerning
            the status of its business, operations, and finances.

            7.2.2. Notwithstanding the foregoing, between the date of this
Agreement and the Closing Date, the Company shall not, and shall cause each
Company Subsidiary not to, directly or indirectly, without the prior written
consent of the Acquiror, engage in any transaction with, or enter into any
agreement with, the Company or any Company Subsidiary, any officer, director or
stockholder of the Company or any Company Subsidiary, or any Affiliate or
"associate" (as such term is defined in Rule 405 of the Commission under the
Securities Act) of any such Person.

      7.3. No Transfers of Capital Stock.

                                     - 32 -
<PAGE>

            7.3.1. Between the date of this Agreement and the Closing Date, the
Shareholders shall not assign, transfer, mortgage, pledge or otherwise dispose
of any or all of the Shares (or any interest therein) or grant any Person the
option or right to acquire such Shares (or any interest therein).

            7.3.2. Between the date of this Agreement and the Closing Date, the
Company shall not, and shall cause each Company Subsidiary not to, assign,
transfer, mortgage, pledge or otherwise dispose of any or all of the capital
stock of any Acquired Company (or any interest therein) or grant any Person the
option or right to acquire the capital stock of any Acquired Company (or any
interest therein).

      7.4. Required Filings and Approvals.

            7.4.1. As promptly as practicable after the date of this Agreement,
the Company shall, and shall cause each Company Subsidiary to, make all filings
required to be made by it in order to consummate the transactions contemplated
by this Agreement, if applicable. Between the date of this Agreement and the
Closing Date, the Company shall, and shall cause each Company Subsidiary to, (a)
cooperate with the Acquiror with respect to all filings that the Acquiror elects
to make or is required to make in connection with the transactions contemplated
by this Agreement, and (b) cooperate with the Acquiror in obtaining any consents
or approvals required to be obtained by the Acquiror in connection herewith.

            7.4.2. Without limiting the foregoing, the Company and the
Shareholders shall promptly furnish to the Acquiror any information reasonably
requested by the Acquiror in connection with the preparation, filing and mailing
of the Acquiror's proxy statement (the "Acquiror Proxy") for a meeting of its
stockholders to consider, among other things, the Required Acquiror Stockholder
Actions, including, without limitation, information concerning the Acquired
Companies, the Shareholders and the Company Nominees. The Company and each
Shareholder, severally and not jointly, represents and warrants to the Acquiror
that the information supplied by the Company and each Shareholder for inclusion
in the Acquiror Proxy will not, on the date the Acquiror Proxy is filed with the
Commission or first mailed to the stockholders of the Acquiror, contain any
statement which, at such time and in light of the circumstances under which it
shall be made, is false or misleading with respect to any material fact, or omit
to state any material fact required to be stated therein or necessary in order
to make the statements therein not false or misleading. If, at any time prior to
the Closing Date, any information should be discovered by the Company or any
Shareholder which should be set forth in an amendment to the Acquiror Proxy so
that such Acquiror Proxy would not include any misstatement of a material fact
or omit to state any material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading, then the
Company or such Shareholder, as the case may be, shall promptly notify the
Acquiror.

      7.5. Notification. Between the date of this Agreement and the Closing
Date, the Company and the Shareholders will promptly notify the Acquiror in
writing if the Company, the Shareholders or any Company Subsidiary becomes aware
of any fact or condition that causes or constitutes a breach of any of the
representations and warranties of the Company or the Shareholders, as the case
may be, as of the date of this Agreement, or if the Company, any Shareholder or
any Company Subsidiary becomes aware of the occurrence after the date of this
Agreement of any fact or condition that would (except as expressly contemplated
by this Agreement) cause or constitute a breach of any such representation or
warranty had such representation or warranty been made as of the time of
occurrence or discovery of such fact or condition. Should any such fact or
condition require any change in the Schedules to this Agreement if the Schedules
to the Agreement were dated the date of the occurrence or discovery of any such
fact or condition, the Company or the Shareholders, as the case may be, will
promptly deliver to the Acquiror a supplement to the Schedules to the Agreement
specifying such change; provided, however, that such delivery shall not affect
any rights of the Acquiror set forth herein, including the right of the Acquiror
to seek a remedy in damages for losses incurred as a result of such supplemented
disclosure. During the same period, the Company and the Shareholders will, and
will cause each Company Subsidiary to, promptly notify the Acquiror of the
occurrence of any breach of any covenant of the Company or the Shareholders in
this Section 7 or of the occurrence of any event that may make the satisfaction
of the conditions in Section 9 impossible or unlikely.

                                     - 33 -
<PAGE>

      7.6. Company Interim Financial Statements. At least seven days prior to
the Closing, the Company shall deliver to the Acquiror the Company's unaudited
interim consolidated financial statements for the period ended March 31, 2004,
including the notes thereto. The Company Interim Financial Statements shall (a)
be in accordance with the books and records of the Acquired Companies; (b)
present fairly the financial condition and the results of operations, changes in
stockholders' equity and cash flow of the Acquired Companies for the periods
therein specified; and (c) be prepared in accordance with GAAP applied on a
consistent basis during the periods concerned.

      7.7. Closing Conditions. Between the date of this Agreement and the
Closing Date, each of the Company and the Shareholders will use its commercially
reasonable efforts to cause the conditions in Section 9 to be satisfied.

                                  SECTION VIII
                            COVENANTS OF THE ACQUIROR

      8.1. Operation of the Business of the Acquiror. Between the date of this
Agreement and the Closing Date, the Acquiror shall, and shall cause each of the
Acquiror Subsidiaries to:

            8.1.1. conduct its business only in the ordinary course of business;

            8.1.2. use its best efforts to preserve intact the current business
organization and business relationships, including, without limitation,
relationships with suppliers, customers, landlords, creditors, officers,
employees and agents;

            8.1.3. obtain the prior written consent of the Company prior to
taking any action of the type specified in Section 6.16 or entering into any
Material Acquiror Contract;

            8.1.4. confer with the Company concerning operational matters of a
material nature; and

            8.1.5. otherwise report periodically to the Company concerning the
status of its business, operations, and finances.

                                     - 34 -
<PAGE>

      8.2. Required Filings and Approvals.

            8.2.1. As promptly as practicable after the date of this Agreement,
the Acquiror shall, and shall cause each of the Acquiror Subsidiaries to, make
all filings legally required to be made by it to consummate the transactions
contemplated by this Agreement. Between the date of this Agreement and the
Closing Date, the Acquiror shall cooperate with the Company with respect to all
filings that the Company is legally required to make in connection with the
transactions contemplated hereby.

            8.2.2. Without limiting the foregoing, as promptly as practicable
after the execution of this Agreement, the Acquiror shall prepare and file the
Acquiror Proxy with the Commission. The Acquiror will advise the Company,
promptly after it receives notice thereof, of any request by the Commission for
the amendment of the Acquiror Proxy or comments thereon and responses thereto or
requests by the Commission for additional information. The Acquiror shall mail
the Acquiror Proxy to its stockholders as promptly as practicable pursuant to
the Securities Act, the Exchange Act and the rules and regulations of the
Commission related thereto. Acquiror shall use its best efforts to hold the
stockholders meeting relating to the Required Acquiror Stockholder Action as
soon as practicable.

      8.3. Notification. Between the date of this Agreement and the Closing
Date, the Acquiror will promptly notify the Company and the Shareholders in
writing if the Acquiror becomes aware of any fact or condition that causes or
constitutes a breach of any of the representations and warranties of the
Acquiror, as of the date of this Agreement, or if the Acquiror becomes aware of
the occurrence after the date of this Agreement of any fact or condition that
would (except as expressly contemplated by this Agreement) cause or constitute a
breach of any such representation or warranty had such representation or
warranty been made as of the time of occurrence or discovery of such fact or
condition. Should any such fact or condition require any change in the Schedules
to this Agreement if the Schedules to the Agreement were dated the date of the
occurrence or discovery of any such fact or condition, the Acquiror will
promptly deliver to the Company and the Shareholders a supplement to the
Schedules to the Agreement specifying such change; provided, however, that such
delivery shall not affect any rights of the Shareholders set forth herein,
including the right of the Shareholders to seek a remedy in damages for losses
incurred as a result of such supplemented disclosure. During the same period,
the Acquiror will promptly notify the Company and the Shareholders of the
occurrence of any breach of any covenant of the Acquiror in this Section 8 or of
the occurrence of any event that may make the satisfaction of the conditions in
Section 10 impossible or unlikely.

      8.4. Closing Conditions. Between the date of this Agreement and the
Closing Date, the Acquiror will use commercially reasonable efforts to cause the
conditions in Section 10 to be satisfied.

      8.5. Indemnification and Insurance.

            8.5.1. The indemnification provisions set forth in the
Organizational Documents of the Acquiror Companies shall not be amended,
modified or otherwise repealed for a period of six years from the Closing Date
in any manner that would adversely affect the rights thereunder as of the
Closing Date of individuals who at or prior to the Closing Date were directors,
officers, employees or agents of the Acquiror Companies, unless such
modification is required after the Closing Date by Law and then only to the
minimum extent required by such Law.

                                     - 35 -
<PAGE>

            8.5.2. The Acquiror shall, to the fullest extent permitted under
applicable Law or its Organizational Documents, indemnify and hold harmless,
each present and former director, officer or employee of the Acquiror or any
Acquiror Subsidiary (collectively, the "Indemnified Parties") against any costs
or expenses (including attorneys' fees), judgments, fines, losses, claims,
damages, liabilities and amounts paid in settlement in connection with any
Proceeding (x) arising out of or pertaining to the transactions contemplated by
this Agreement or (y) otherwise with respect to any acts or omissions occurring
at or prior to the Closing Date, to the maximum extent permitted by Delaware law
for a period of six years after the Closing Date. In the event of any such
Proceeding (whether arising before or after the Closing Date), (i) any counsel
retained by the Indemnified Parties for any period after the Closing Date shall
be reasonably satisfactory to the Acquiror, (ii) after the Closing Date, the
Acquiror shall pay the reasonable fees and expenses of such counsel, promptly
after statements therefor are received, provided that the Indemnified Parties
shall be required to reimburse the Acquiror for such payments in the
circumstances and to the extent required by the Acquiror's Organizational
Documents, any applicable contract or agreement or applicable Law, and (iii) the
Acquiror shall cooperate in the defense of any such matter; provided, however,
that the Acquiror shall not be liable for any settlement effected without its
written consent (which consent shall not be unreasonably withheld); and
provided, further, that, in the event that any claim or claims for
indemnification are asserted or made within such six-year period, all rights to
indemnification in respect of any such claim or claims shall continue until the
disposition of any and all such claims. The Indemnified Parties as a group may
retain only one law firm to represent them in each applicable jurisdiction with
respect to any single action unless there is, under applicable standards of
professional conduct, a conflict on any significant issue between the positions
of any two or more Indemnified Parties, in which case each Indemnified Party
with respect to whom such a conflict exists (or group of such Indemnified
Parties who among them have no such conflict) may retain one separate law firm
in each applicable jurisdiction.

            8.5.3. The Acquiror shall honor and fulfill in all respects its
obligations pursuant to any indemnification agreements and employment agreements
(the parties under such agreements being referred to as the "Covered Persons")
with the Acquiror's directors and officers existing at or before the Closing
Date.

            8.5.4. In addition, the Acquiror, on a best efforts basis, shall
provide, for a period of not less than six years after the Closing Date, the
Acquiror's current directors and officers with an insurance and indemnification
policy that provides sufficient coverage, as determined in good faith by a
majority of those Persons who were directors of Acquiror on the date of this
Agreement, for events occurring at or prior to the Closing Date (the "D&O
Insurance").

            8.5.5. This Section 8.5 shall survive the consummation of the
transactions contemplated by this Agreement at the Closing Date, is intended to
benefit the Indemnified Parties and the Covered Persons, shall be binding on all
successors and assigns of the Acquiror and shall be enforceable by the
Indemnified Parties and the Covered Persons.

                                     - 36 -
<PAGE>

      8.6. Rule 144 Reporting. With a view to making available to the Acquiror's
stockholders the benefit of certain rules and regulations of the Commission
which may permit the sale of the Acquiror Common Stock to the public without
registration, from and after the Closing Date, the Acquiror agrees to:

            8.6.1. Make and keep public information available, as those terms
are understood and defined in Rule 144; and

            8.6.2. File with the Commission, in a timely manner, all reports and
other documents required of the Acquiror under the Exchange Act.

      8.7. Employment Agreement. Acquiror has entered into an employment
agreement (subject to customary termination provisions) with Jeff Halloran, a
copy of which is included as Schedule 8.7, pursuant to which Acquiror employs
Mr. Halloran as its President and CEO (the "Halloran Employment Agreement").

      8.8. Removal of Officers. Each officer of Acquiror shall either resign or
Acquiror shall cause such officer to be removed, in each case, effective on or
prior to the Closing Date.

                                   SECTION IX
                     CONDITIONS PRECEDENT TO THE ACQUIROR'S
                               OBLIGATION TO CLOSE

      The Acquiror's obligation to acquire the Shares and to take the other
actions required to be taken by the Acquiror at the Closing is subject to the
satisfaction, at or prior to the Closing, of each of the following conditions
(any of which may be waived by the Acquiror, in whole or in part):

      9.1. Accuracy of Representations. The representations and warranties of
the Company and the Shareholders set forth in this Agreement or in any Schedule
or certificate delivered pursuant hereto shall be true and correct in all
material respects as of the date of this Agreement, and shall be deemed repeated
as of the Closing Date and shall then be true and correct in all material
respects, except to the extent a representation or warranty is expressly limited
by its terms to another date and without giving effect to any supplemental
Schedule.

      9.2. Performance by the Company and Shareholders.

            9.2.1. All of the covenants and obligations that the Company and
Shareholders are required to perform or to comply with pursuant to this
Agreement at or prior to the Closing (considered collectively), and each of
these covenants and obligations (considered individually), must have been duly
performed and complied with in all material respects.

            9.2.2. Each document required to be delivered by the Company and the
Shareholders pursuant to this Agreement at or prior to Closing must have been
delivered.

                                     - 37 -
<PAGE>

      9.3. Company Interim Financial Statements. The Company shall have
delivered to the Acquiror the Company Interim Financial Statements in compliance
with Section 7.6, and such Company Audited Financial Statements shall not be
materially worse than the Company Audited Financial Statements for the period
ended October 31, 2003.

      9.4. Certificate of Officer. The Company will have delivered to the
Acquiror a certificate, dated the Closing Date, executed by an officer of the
Company, certifying the satisfaction of the conditions specified in Sections
9.1, 9.2, 9.3 and 9.4.

      9.5. Certificate of Shareholders. Each Shareholder will have delivered to
the Acquiror a certificate, dated the Closing Date, executed by such
Shareholder, if a natural person, or by an authorized officer of such
Shareholder, if an entity, certifying the satisfaction of the conditions
specified in Sections 9.1 and 9.2 solely with respect to such Shareholder.

      9.6. Consents.

            9.6.1. All material consents, waivers, approvals, authorizations or
orders required to be obtained, and all filings required to be made, by the
Company and/or the Shareholders for the authorization, execution and delivery of
this Agreement and the consummation by them of the transactions contemplated by
this Agreement, shall have been obtained and made by the Company or the
Shareholders, as the case may be, except where the failure to receive such
consents, waivers, approvals, authorizations or orders or to make such filings
would not reasonably be expected to have a Material Adverse Effect on the
Company or the Acquiror.

            9.6.2. Without limiting the foregoing, the Acquiror Proxy shall have
been mailed to the stockholders of the Acquiror not less than 10 days prior to
the Closing Date. No Proceeding occasioned by Acquiror Proxy shall have been
initiated or threatened by the Commission (which Proceeding remains unresolved
as of the Closing Date).

            9.6.3. The stockholders of the Acquiror shall have approved the
Required Acquiror Stockholder Action.

      9.7. Documents. The Company and the Shareholders must have caused the
following documents to be delivered to the Acquiror:

            9.7.1. the Company Debentures and share certificates evidencing all
of the Shares held by the Shareholders (as set forth in Exhibit A), along with
executed stock powers transferring such Company Debentures and Shares to the
Acquiror;

            9.7.2. a Secretary's Certificate of the Company, dated the Closing
Date, certifying attached copies of (A) the Organizational Documents of the
Company and each Company Subsidiary, (B) the resolutions of the Company Board
and the Shareholders approving this Agreement and the transactions contemplated
hereby; and (C) the incumbency of each authorized officer of the Company signing
this Agreement and any other agreement or instrument contemplated hereby to
which the Company is a party;

                                     - 38 -
<PAGE>

            9.7.3. a certified certificate of good standing, or equivalent
thereof, of the Company;

            9.7.4. each of the Transaction Documents to which the Company and/or
the Shareholders is a party, duly executed; and

            9.7.5. such other documents as the Acquiror may reasonably request
for the purpose of (i) evidencing the accuracy of any of the representations and
warranties of the Company and the Shareholders pursuant to Section 9.1, (ii)
evidencing the performance of, or compliance by the Company and the Shareholders
with, any covenant or obligation required to be performed or complied with by
the Company or the Shareholders, as the case may be, (iii) evidencing the
satisfaction of any condition referred to in this Section 9, or (iv) otherwise
facilitating the consummation or performance of any of the transactions
contemplated by this Agreement.

      9.8. No Proceedings. Since the date of this Agreement, there must not have
been commenced or threatened against the Acquiror, the Company or any
Shareholder, or against any Affiliate thereof, any Proceeding (which Proceeding
remains unresolved as of the Closing Date) (a) involving any challenge to, or
seeking damages or other relief in connection with, any of the transactions
contemplated by this Agreement, or (b) that may have the effect of preventing,
delaying, making illegal, or otherwise interfering with any of the transactions
contemplated by this Agreement.

                                   SECTION X
              CONDITIONS PRECEDENT TO THE OBLIGATION OF THE COMPANY
                       AND THE SHAREHOLDERS TO THE CLOSING

      The Shareholders' obligation to transfer the Shares and the obligations of
the Company to take the other actions required to be taken by the Company at the
Closing are subject to the satisfaction, at or prior to the Closing, of each of
the following conditions (any of which may be waived by the Company, in whole or
in part):

      10.1. Accuracy of Representations. The representations and warranties of
the Acquiror set forth in this Agreement or in any Schedule or certificate
delivered pursuant hereto shall be true and correct in all material respects as
of the date of this Agreement, and shall be deemed repeated as of the Closing
Date and shall then be true and correct in all material respects, except to the
extent a representation or warranty is expressly limited by its terms to another
date and without giving effect to any supplemental Schedule.

      10.2. Performance by the Acquiror.

            10.2.1. All of the covenants and obligations that the Acquiror are
required to perform or to comply with pursuant to this Agreement at or prior to
the Closing (considered collectively), and each of these covenants and
obligations (considered individually), must have been performed and complied
with in all respects.

            10.2.2. Each document required to be delivered by the Acquiror
pursuant to this Agreement must have been delivered.

                                     - 39 -
<PAGE>

      10.3. Certificate of Officer. The Acquiror will have delivered to the
Company a certificate, dated the Closing Date, executed by an officer of the
Acquiror, certifying the satisfaction of the conditions specified in Sections
10.1 and 10.2.

      10.4. Consents.

            10.4.1. All material consents, waivers, approvals, authorizations or
orders required to be obtained including, without limitation, the Required
Acquiror Stockholder Action, and all filings required to be made including,
without limitation, the filing of the Charter Amendment, by the Acquiror for the
authorization, execution and delivery of this Agreement and the consummation by
it of the transactions contemplated by this Agreement, shall have been obtained
and made by the Acquiror, except where the failure to receive such consents,
waivers, approvals, authorizations or orders or to make such filings would not
reasonably be expected to have a Material Adverse Effect on the Company or the
Acquiror.

            10.4.2. Without limiting the foregoing, the Acquiror Proxy shall
have been mailed to the stockholders of the Acquiror not less than 10 days prior
to the Closing Date. No Proceeding occasioned by the Acquiror Proxy shall have
been initiated or threatened by the Commission (which Proceeding remains
unresolved as of the Closing Date).

      10.5. Documents. The Acquiror must have caused the following documents to
be delivered to the Company and/or the Shareholders:

            10.5.1. share certificates evidencing each Shareholder's pro rata
share of the Acquiror Shares and the Warrants (as set forth in Exhibit A);

            10.5.2. a Secretary's Certificate, dated the Closing Date certifying
attached copies of (A) the Organizational Documents of the Acquiror and each
Acquiror Subsidiary, (B) the resolutions of the Acquiror Board approving this
Agreement and the transactions contemplated hereby; and (C) the incumbency of
each authorized officer of the Acquiror signing this Agreement and any other
agreement or instrument contemplated hereby to which the Acquiror is a party;

            10.5.3. a Certificate of Good Standing of the Acquiror;

            10.5.4. each of the Transaction Documents to which the Acquiror is a
party, duly executed; and

            10.5.5. such other documents as the Company may reasonably request
for the purpose of (i) evidencing the accuracy of any representation or warranty
of the Acquiror pursuant to Section 10.1, (ii) evidencing the performance by the
Acquiror of, or the compliance by the Acquiror with, any covenant or obligation
required to be performed or complied with by the Acquiror, (iii) evidencing the
satisfaction of any condition referred to in this Section 10, or (iv) otherwise
facilitating the consummation of any of the transactions contemplated by this
Agreement.

      10.6. No Proceedings. Since the date of this Agreement, there must not
have been commenced or threatened against the Acquiror, the Company or any
Shareholder, or against any Affiliate thereof, any Proceeding (which Proceeding
remains unresolved as of the Closing Date) (a) involving any challenge to, or
seeking damages or other relief in connection with, any of the transactions
contemplated hereby, or (b) that may have the effect of preventing, delaying,
making illegal, or otherwise interfering with any of the transactions
contemplated hereby.

                                     - 40 -
<PAGE>

      10.7. No Claim Regarding Stock Ownership or Consideration. There must not
have been made or threatened by any Person any claim asserting that such Person
(a) is the holder of, or has the right to acquire or to obtain beneficial
ownership of the Shares or any other Equity Security or ownership interest in,
the Company, or (b) is entitled to all or any portion of the Transaction
Securities.

      10.8. Each officer of Acquiror shall have either resigned or Acquiror
shall have caused such officer to be removed, in each case, effective on or
prior to the Closing Date.

                                   SECTION XI
                                   TERMINATION

      11.1. Termination Events. This Agreement may, by notice given prior to or
at the Closing, be terminated:

            11.1.1. by mutual consent of the Acquiror and the Company;

            11.1.2. by the Acquiror, if any of the conditions in Section 9 have
not been satisfied as of the Closing Date or if satisfaction of such a condition
is or becomes impossible (other than through the failure of the Acquiror to
comply with its obligations under this Agreement) and the Acquiror has not
waived such condition on or before the Closing Date; or (ii) by the Company, if
any of the conditions in Section 10 have not been satisfied as of the Closing
Date or if satisfaction of such a condition is or becomes impossible (other than
through the failure of the Company or any Shareholder to comply with its
obligations under this Agreement) and the Company has not waived such condition
on or before the Closing Date;

            11.1.3. by the Acquiror or the Company, if the Closing has not
occurred other than due to the failure of the Acquiror (in the event the
Acquiror seeks to terminate this Agreement) or other than due to the failure of
the Company or any Shareholder (in the case the Company seeks to terminate this
Agreement) 60 days after the final mailing of the Acquiror Proxy to the
stockholders of the Acquiror (or such later date as the parties may agree upon,
the "Outside Date");

            11.1.4. by either the Acquiror or the Company, if there shall have
been entered a final, nonappealable order or injunction of any Governmental
Authority restraining or prohibiting the consummation of the transactions
contemplated hereby;

            11.1.5. by the Acquiror, if, prior to the Closing Date, the Company
or any Shareholder is in material breach of any representation, warranty,
covenant or agreement herein contained and such breach shall not be cured within
10 days of the date of notice of default served by the Acquiror claiming such
breach; provided, however, that the right to terminate this Agreement pursuant
to this Section 11.1.5 shall not be available to the Acquiror if the Acquiror is
in material breach of this Agreement at the time notice of termination is
delivered;

                                     - 41 -
<PAGE>

            11.1.6. by the Company, if, prior to the Closing Date, the Acquiror
is in material breach of any representation, warranty, covenant or agreement
herein contained and such breach shall not be cured within 10 days of the date
of notice of default served by the Company claiming such breach or, if such
breach is not curable within such 10 day period, such longer period of time as
is necessary to cure such breach; provided, however, that the right to terminate
this Agreement pursuant to this Section 11.1.6 shall not be available to the
Company if the Company or any Shareholder is in material breach of this
Agreement at the time notice of termination is delivered; or

            11.1.7. by the Acquiror, if, prior to the Closing Date, the Acquiror
Board approves any merger, liquidation, recapitalization, consolidation or other
business combination involving the Acquiror or the Acquiror Subsidiaries or any
capital stock or any material portion of the assets of the Acquiror or any
Acquiror Subsidiary, or any combination of the foregoing (an "Acquisition
Transaction"); provided that a majority of the members of the Acquiror Board
have determined in good faith and on reasonable basis, after consultation with
outside counsel and advisors, that (i) such Acquisition Transaction is more
favorable from a financial point of view to the Acquiror's stockholders than the
transactions contemplated by this Agreement and (ii) failure to take such action
would constitute a breach of the fiduciary duties of the Acquiror Board under
applicable Law.

      11.2. Effect of Termination. Each party's right of termination under
Section 11.1 is in addition to any other rights it may have under this Agreement
or otherwise, and the exercise of a right of termination will not be an election
of remedies. If this Agreement is terminated pursuant to Section 11.1, all
further obligations of the parties under this Agreement will terminate, except
that the obligations in Sections 5.12, 6.11, 11.2, and 13 will survive;
provided, however, that if this Agreement is terminated by a party because of
the breach of the Agreement by another party or because one or more of the
conditions to the terminating party's obligations under this Agreement is not
satisfied as a result of another party's failure to comply with its obligations
under this Agreement, the terminating party's right to pursue all legal remedies
will survive such termination unimpaired.

                                  SECTION XII
                            INDEMNIFICATION; REMEDIES

      12.1. Survival. All representations, warranties, covenants, and
obligations in this Agreement shall survive the Closing and expire thirty (30)
days from the date on which the audited financial statements of the Acquiror for
its fiscal year ended December 31, 2004 shall have been filed as part of the
Acquiror's Annual Report on Form 10-K, but in no event earlier than April 30,
2005 (the "Survival Period"). The right to indemnification, payment of Damages
or other remedy based on such representations, warranties, covenants, and
obligations will not be affected by any investigation conducted with respect to,
or any knowledge acquired (or capable of being acquired) at any time, whether
before or after the execution and delivery of this Agreement or the Closing
Date, with respect to the accuracy or inaccuracy of or compliance with, any such
representation, warranty, covenant, or obligation. The waiver of any condition
based on the accuracy of any representation or warranty, or on the performance
of or compliance with any covenant or obligation, will not affect the right to
indemnification, payment of Damages, or other remedy based on such
representations, warranties, covenants, and obligations.

                                     - 42 -
<PAGE>

      12.2. Indemnification by the Company.

            12.2.1. From and after the Closing until (a) the expiration of the
Survival Period, or (b) with respect to a specific claim made by the Acquiror
against the Company prior to the expiration of the Survival Period, until a
court of competent jurisdiction renders a final unappealable decision (or
appeals of a decision are not taken within the time period permitted for filing
same) (the "Claims Period"), the Company shall indemnify and hold harmless the
Acquiror from and against any liabilities, loss, claims, damages (excluding
consequential, punitive and other similar damages), fines, penalties, expenses
(including costs of investigation and defense and reasonable attorneys' fees) or
diminution of value (collectively, "Damages") arising, directly or indirectly,
from or in connection with:

                  (a) any breach of any representation or warranty made by the
            Company in this Agreement or in any certificate delivered by the
            Company pursuant to this Agreement;

                  (b) any breach by the Company of its covenants or obligations
            in this Agreement; or

                  (c) any breach by the Acquiror of any covenants or obligations
            in this Agreement required to be performed by the Acquiror from and
            after the Closing Date, including, without limitation, the covenants
            set forth in Sections 8.6 and 8.7.

            12.2.2. The amount of any and all Damages suffered by the Acquiror
shall be recovered by the return to the Acquiror of a specified number of
Acquiror Shares by the Shareholders (the "Returned Shares"), the amount of which
shall be determined in accordance with Section 12.4 below. All Returned Shares
shall be retired.

            12.2.3. Any claims of the Acquiror pursuant to this Section 12.2 may
be brought on behalf of the Acquiror by those Persons who were stockholders of
the Acquiror immediately prior to the Closing.

      12.3. Indemnification by the Acquiror.

            12.3.1. From and after the Closing until the expiration of the
Claims Period, the Acquiror shall indemnify and hold harmless the Company and
the Shareholders (collectively, the "Company Indemnified Parties"), from and
against any Damages arising, directly or indirectly, from or in connection with:

                  (a) any breach of any representation or warranty made by the
            Acquiror in this Agreement or in any certificate delivered by the
            Acquiror pursuant to this Agreement; or

                                     - 43 -
<PAGE>

                  (b) any breach by the Acquiror of any covenant or obligation
            of the Acquiror in this Agreement required to be performed by the
            Acquiror on or prior to the Closing Date.

            12.3.2. The amount of any and all Damages suffered by a Company
Indemnified Party shall be recovered by the issuance to the Shareholders of a
specified number of additional shares of Acquiror Common Stock (the "Additional
Shares"), the amount of which shall be determined in accordance with Section
12.5 below.

      12.4. Return of Returned Shares. The number of Returned Shares to be
returned by the Shareholders to the Acquiror and retired pursuant to Section
12.2 shall be equal to the aggregate amount of the Damages suffered by the
Acquiror, divided by the Market Price of the Acquiror's Common Stock on the date
that such amount of Damages is finally determined by arbitration or pursuant to
a binding settlement agreement among the stockholders of the Acquiror other than
the Shareholders and the Company Indemnified Parties. The Returned Shares shall
be returned by each Shareholder on a pro rata basis, as determined by such
Shareholder's pro rata share of the Acquiror Shares issuable at Closing as set
forth in Exhibit A.

      12.5. Issuance of Additional Shares. The number of Additional Shares to be
issued to the Shareholders pursuant to Section 12.3 shall be equal to the
aggregate amount of the Damages suffered by the Company Indemnified Parties,
divided by the Market Price of the Acquiror's Common Stock on the date that such
amount of Damages is determined by arbitration or pursuant to a binding
settlement agreement among the stockholders of the Acquiror other than the
Shareholders and the Company Indemnified Parties. The Additional Shares shall be
issued to each Shareholder on a pro rata basis, as determined by such
Shareholder's pro rata share of the Acquiror Shares issuable at Closing as set
forth in Exhibit A.

      12.6. Limitations on Amount - the Shareholders. The Acquiror shall not be
entitled to indemnification pursuant to Section 12.2, unless and until the
aggregate amount of Damages to the Acquiror with respect to such matters under
Section 12.2.1 exceeds $250,000, at which time, subject to the following cap on
the maximum number of Returned Shares to be returned to the Acquiror, the
Acquiror shall be entitled to indemnification for the total amount of such
Damages. The aggregate number of Returned Shares to be returned to the Acquiror
shall not exceed 27,482,147 adjusted for any stock split, reverse stock split,
stock dividend, reclassification, recapitalization, merger or consolidation or
like capital adjustment affecting the Acquiror Common Stock. The Acquiror and
the Shareholders agree that 27,482,147 shares of the Acquiror Common Stock
issuable to Shareholders pursuant to this Agreement shall be held in escrow
pursuant to Section 12.2 for a period of one year following Closing Date, copy
of said Escrow Agreement is included herein as Schedule 12.6.

      12.7. Limitations on Amount - the Acquiror. No Company Indemnified Party
shall be entitled to indemnification pursuant to Section 12.3, unless and until
the aggregate amount of Damages to all Company Indemnified Parties with respect
to such matters under Section 12.3.1 exceeds $250,000, at which time, subject to
the following cap on the maximum number of Additional Shares issuable, the
Company Indemnified Parties shall be entitled to indemnification for the total
amount of such Damages. The Shareholders shall not be issued more than
15,782,000 Additional Shares in the aggregate, adjusted for any stock split,
reverse stock split, stock dividend, reclassification, recapitalization, merger
or consolidation or like capital adjustment affecting the Acquiror Common Stock.

                                     - 44 -
<PAGE>

      12.8. Determining Damages. Materiality qualifications to the
representations and warranties of the Company and the Acquiror shall not be
taken into account in determining the amount of Damages occasioned by a breach
of any such representation and warranty for purposes of determining whether the
baskets set forth in Sections 12.6 and 12.7 have been met.

      12.9. Breach by Shareholders. Nothing in this Section 12 shall limit the
Acquiror's right to pursue any appropriate legal or equitable remedy against any
Shareholder with respect to any Damages arising, directly or indirectly, from or
in connection with: (a) any breach by such Shareholder of any representation or
warranty made by such Shareholder in this Agreement or in any certificate
delivered by such Shareholder pursuant to this Agreement or (b) any breach by
such Shareholder of its covenants or obligations in this Agreement. All claims
of the Acquiror pursuant to this Section 12.9 may be brought on behalf of the
Acquiror by those Persons who were stockholders of the Acquiror immediately
prior to the Closing.

                                  SECTION XIII
                               GENERAL PROVISIONS

      13.1. Expenses. Except as otherwise expressly provided in this Agreement,
each party to this Agreement will bear its respective expenses incurred in
connection with the preparation, execution, and performance of this Agreement
and the transactions contemplated by this Agreement, including all fees and
expenses of agents, representatives, counsel, and accountants. In the event of
termination of this Agreement, the obligation of each party to pay its own
expenses will be subject to any rights of such party arising from a breach of
this Agreement by another party.

      13.2. Public Announcements. The Acquiror shall promptly, but no later than
three days following the effective date of this Agreement, issue a press release
disclosing the transactions contemplated hereby. Between the date of this
Agreement and the Closing Date, the Company and the Acquiror shall consult with
each other in issuing any other press releases or otherwise making public
statements or filings and other communications with the Commission or any
regulatory agency or stock market or trading facility with respect to the
transactions contemplated hereby and neither party shall issue any such press
release or otherwise make any such public statement, filings or other
communications without the prior written consent of the other, which consent
shall not be unreasonably withheld or delayed, except that no prior consent
shall be required if such disclosure is required by law, in which case the
disclosing party shall provide the other party with prior notice of such public
statement, filing or other communication and shall incorporate into such public
statement, filing or other communication the reasonable comments of the other
party.

      13.3. Confidentiality.

            13.3.1. Each Shareholder, the Company and Acquiror (in such
capacity, the "Receiving Parties") shall use the confidential information of
each other party (in such capacity, the "Disclosing Parties") solely for the
purpose of evaluating and consummating the transactions contemplated hereby, and
that such confidential information shall be kept confidential and the Receiving
Parties shall not disclose such confidential information of the Disclosing
Parties in any manner whatsoever; provided, however, that (i) a Receiving Party
may make any disclosure of confidential information to which the Disclosing
Party gives its prior written consent, and (ii) the Acquiror may disclose such
information as is provided to it in writing for inclusion in the Acquiror Proxy.
Without limitation, the Receiving Parties shall maintain the confidential
information of the Disclosing Parties in confidence and limit its use to the
purposes contemplated by this agreement using at least the same degree of care
as it employs in maintaining as secret its own trade secret, proprietary and
confidential information, but always at least a reasonable degree of care.

                                     - 45 -
<PAGE>

            13.3.2. As used in this Section 13.3, "confidential information"
shall be deemed to include all any and all nonpublic information (in whatever
form) disclosed, or made available, to the Receiving Party by or on behalf of
the Disclosing Party with respect to the Disclosing Party, its Affiliates or its
or their respective business, clients or potential clients, including, but not
limited to, financial statements and financial information, marketing plans,
technology, customer lists, the status of ongoing deals, deal pitches and
business forecasts. Notwithstanding the foregoing, the term "confidential
information" does not include information which (i) is or becomes generally
available to the public other than as a result of a breach of this Agreement,
(ii) was within the possession of the Receiving Party prior to its being
furnished to Receiving Party by or on behalf of the Disclosing Party, provided
that the source of such information was reasonably believed by the Receiving
Party not to be bound by a confidentiality agreement with, or other contractual,
legal or fiduciary obligation of confidentiality to, the Disclosing Party or any
other party with respect to such information or (iii) is or becomes available to
the Receiving Party on a non-confidential basis from a source other than the
Disclosing Party or any of their respective representatives, provided that such
source was reasonably believed by the Receiving Party not to be bound by a
confidentiality agreement with or other contractual, legal or fiduciary
obligation of confidentiality to the Disclosing Party or any other party with
respect to such information.

      13.4. Notices. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given or
made if: (i) sent by registered or certified mail, return receipt requested,
postage prepaid; (ii) hand delivered; or (iii) sent by prepaid overnight
carrier, with a record of receipt, in each case to each of the parties at the
address(es) set forth for such party below (or at such other address(es) as
shall be designated by such party by notice to each other party):

       (i)      If to the  Company:  Phantom  Fiber  Corporation  144
                Front Street, Suite 580 Toronto, Ontario M5J 2L7
                CANADA
                Attn: Jeff Halloran, President

        (ii)    If to Acquiror:
                Pivotal Self-Service Technologies Inc.
                13980 Jane Street
                King City, Ontario  L7B 1A3
                CANADA
                Attention:  John G. Simmonds, Chairman and CEO

                                     - 46 -
<PAGE>

                with a copy to:
                Kramer Levin Naftalis & Frankel LLP
                919 Third Avenue
                New York, New York  10022
                USA
                Attention:  Scott S. Rosenblum, Esq.

       (ii)     If to any  Shareholder,  to the  address set forth on
                the  counterpart  signature  page  hereto of for such
                Shareholder.

      13.5. Arbitration. Any dispute or controversy under this Agreement shall
be settled exclusively by arbitration in the City of New York, County of New
York in accordance with the rules of the American Arbitration Association then
in effect. Judgment may be entered on the arbitration award in any court having
jurisdiction.

      13.6. Further Assurances. The parties agree (a) to furnish upon request to
each other such further information, (b) to execute and deliver to each other
such other documents, and (c) to do such other acts and things, all as the other
party may reasonably request for the purpose of carrying out the intent of this
Agreement and the documents referred to in this Agreement.

      13.7. Waiver. The rights and remedies of the parties to this Agreement are
cumulative and not alternative. Neither the failure nor any delay by any party
in exercising any right, power, or privilege under this Agreement or the
documents referred to in this Agreement will operate as a waiver of such right,
power, or privilege, and no single or partial exercise of any such right, power,
or privilege will preclude any other or further exercise of such right, power,
or privilege or the exercise of any other right, power, or privilege. To the
maximum extent permitted by applicable law, (a) no claim or right arising out of
this Agreement or the documents referred to in this Agreement can be discharged
by one party, in whole or in part, by a waiver or renunciation of the claim or
right unless in writing signed by the other party; (b) no waiver that may be
given by a party will be applicable except in the specific instance for which it
is given; and (c) no notice to or demand on one party will be deemed to be a
waiver of any obligation of such party or of the right of the party giving such
notice or demand to take further action without notice or demand as provided in
this Agreement or the documents referred to in this Agreement.

      13.8. Entire Agreement and Modification. This Agreement supersedes all
prior agreements between the parties with respect to its subject matter
(including the letter of intent between the Acquiror and the Company, dated
February 4, 2004) and constitutes (along with the documents referred to in this
Agreement) a complete and exclusive statement of the terms of the agreement
between the parties with respect to its subject matter. This Agreement may not
be amended except by a written agreement executed by the party against whom the
enforcement of such amendment is sought.

                                     - 47 -
<PAGE>

      13.9. Assignments, Successors, and No Third-Party Rights. No party may
assign any of its rights under this Agreement without the prior consent of the
other parties. Subject to the preceding sentence, this Agreement will apply to,
be binding in all respects upon, and inure to the benefit of and be enforceable
by the respective successors and permitted assigns of the parties. Except as set
forth in [Section 8.6 and Section 12.3,] nothing expressed or referred to in
this Agreement will be construed to give any Person other than the parties to
this Agreement any legal or equitable right, remedy, or claim under or with
respect to this Agreement or any provision of this Agreement. This Agreement and
all of its provisions and conditions are for the sole and exclusive benefit of
the parties to this Agreement and their successors and assigns.

      13.10. Severability. If any provision of this Agreement is held invalid or
unenforceable by any court of competent jurisdiction, the other provisions of
this Agreement will remain in full force and effect. Any provision of this
Agreement held invalid or unenforceable only in part or degree will remain in
full force and effect to the extent not held invalid or unenforceable.

      13.11. Section Headings, Construction. The headings of Sections in this
Agreement are provided for convenience only and will not affect its construction
or interpretation. All references to "Section" or "Sections" refer to the
corresponding Section or Sections of this Agreement. All words used in this
Agreement will be construed to be of such gender or number as the circumstances
require. Unless otherwise expressly provided, the word "including" does not
limit the preceding words or terms.

      13.12. Governing Law. This Agreement will be governed by the laws of the
State of New York without regard to conflicts of laws principles.

                                     - 48 -
<PAGE>

      13.13. Shareholder Representative.

            13.13.1. The Acquiror shall be entitled to deal exclusively with
Jeff Halloran (the "Shareholder Representative") as the sole and exclusive
representative and agent of all of the Shareholders in respect of all matters
arising under or pertaining to this Agreement, unless and until the Acquiror
receives notice to the contrary as provided in Section 13.13.2 below. Without
limiting the foregoing, (a) any amounts payable under this Agreement by the
Acquiror to any Shareholder may be paid to the Shareholder Representative for
the account of such Shareholder; (b) any notice, communication, demand, claim,
action or proceeding required or permitted hereunder may be delivered by the
Acquiror to, or brought by the Acquiror against, the Shareholder Representative
in its capacity as agent and representative of the Shareholders with the same
effect, and which shall be binding to the same degree, as if delivered to, or
brought against, the Shareholder individually; (c) any settlement or other
agreement of the Acquiror with the Shareholder in its capacity as agent and
representative of the Shareholders in respect of all matters arising under or
pertaining to this Agreement shall have the same effect, and be binding upon,
the Shareholders to the same degree as if made with the Shareholders
individually; and (d) except as provided in Section 13.13.2, the Acquiror shall
not be required to recognize or respond to, and shall not be bound by, any
notice, communication, demand, claim, action or proceeding delivered to or
brought against the Acquiror by any Shareholder in respect of all matters
arising under or pertaining to this Agreement except through the Shareholder
Representative in its capacity as agent and representative of the Shareholders.

            13.13.2. The Shareholders by notice in writing to the Acquiror
signed by all the Shareholders or their legal representative may designate
another single Person to act as representative and agent of the Shareholders as
provided in Section 13.13.1 above.

      13.14. Termination of Shareholder Agreement. The Shareholders and the
Company hereby agree that the Shareholder Agreement a copy of which is included
herein as Schedule 13.14 shall terminate and be of no further force and effect
immediately prior to the Closing.

      13.15. Counterparts. This Agreement may be executed in one or more
counterparts, each of which will be deemed to be an original copy of this
Agreement and all of which, when taken together, will be deemed to constitute
one and the same agreement.

                                     - 49 -
<PAGE>

                           COUNTERPART SIGNATURE PAGE

      IN WITNESS WHEREOF, the parties have executed and delivered this Share
Exchange Agreement as of the date first written above.

                                       ACQUIROR:

                                       PIVOTAL SELF-SERVICE TECHNOLOGIES INC.

                                       By:______________________________________
                                          Name:
                                          Title:

                                       COMPANY:

                                       PHANTOM FIBER CORPORATION

                                       By:______________________________________
                                          Name:
                                          Title:

<PAGE>

                           COUNTERPART SIGNATURE PAGE
                    (FOR ISSUANCES PURSUANT TO REGULATION S)

      IN WITNESS WHEREOF, the parties have executed and delivered this Share
Exchange Agreement as of the date first written above.

                                       BY SIGNING BELOW, I REPRESENT THAT I AM
                                       NOT A U.S. PERSON.

                                       [ENTITY]

                                       By:  ____________________________
                                            Name:
                                            Title:

OFFSHORE DELIVERY INSTRUCTIONS:
------------------------------

------------------------------------------
  PRINT EXACT NAME IN WHICH YOU WANT
  THE SECURITIES TO BE REGISTERED

Attn:    ____________________________________

Address: ____________________________________

         ____________________________________

         ____________________________________

Phone No.  __________________________________

Facsimile No. _______________________________

<PAGE>

                           COUNTERPART SIGNATURE PAGE

                    (FOR ISSUANCES PURSUANT TO SECTION 4(2))

      IN WITNESS WHEREOF, the parties have executed and delivered this Share
Exchange Agreement as of the date first written above.

                                       BY SIGNING BELOW, I REPRESENT THAT I AM
                                       NOT A U.S. PERSON.

                                       [ENTITY]

                                       By: ____________________________
                                           Name:
                                           Title:

Circle the category under which you are an "accredited investor" pursuant to
Exhibit B:

1        2        3        4        5       6        7        8

------------------------------------------
   PRINT EXACT NAME IN WHICH YOU WANT
      THE SECURITIES TO BE REGISTERED

Attn: ____________________________________

Address: _________________________________

         _________________________________

         _________________________________

Phone No. ________________________________

Facsimile No. ____________________________

<PAGE>

                                    EXHIBIT A

                         SHARES, COMPANY DEBENTURES AND
                         ACQUIROR SHARES TO BE EXCHANGED

<TABLE>
<S>                                                                                                        <C>
Total Shares to be delivered by the Shareholders to Acquiror:                                              24,983,770

Total Company Debentures to be delivered by the Shareholders to Acquiror (in Canadian Dollars               1,200,000
principal amount):

Total Acquiror Shares to be delivered by the Acquiror to the Shareholders:                                167,410,735

Total Warrants to be delivered by the Acquiror to the Shareholders:                                        15,000,000
</TABLE>

<TABLE>
<CAPTION>
                                      NUMBER OF NUMBER OF
                                        SHARES OWNED OR           SHARES          PERCENTAGE OF
                                         ISSUABLE UPON        ISSUABLE UPON        TOTAL SHARES
                                         CONVERSION OF        CONVERSION OF          OWNED ON        PRO RATA SHARE
     NAME AND ADDRESS OF EACH              PREFERRED             COMPANY           AS-CONVERTED        OF ACQUIROR         SHARE OF
            SHAREHOLDER                   SHARES OWNED          DEBENTURES            BASIS              SHARES            WARRANTS
------------------------------------    -----------------     ---------------     ---------------    ---------------- -- -----------
<S>     <C>    <C>    <C>    <C>    <C>    <C>
</TABLE>

<PAGE>

                                    EXHIBIT B

                       DEFINITION OF "ACCREDITED INVESTOR"

The term "accredited investor" means:

(1)   A bank as defined in Section 3(a)(2) of the Securities Act, or a savings
      and loan association or other institution as defined in Section 3(a)(5)(A)
      of the Securities Act, whether acting in its individual or fiduciary
      capacity; a broker or dealer registered pursuant to Section 15 of the
      Securities Exchange Act of 1934; an insurance company as defined in
      Section 2(13) of the Securities Act; an investment company registered
      under the Investment Company Act of 1940 (the "Investment Company Act") or
      a business development company as defined in Section 2(a)(48) of the
      Investment Company Act; a Small Business Investment Company licensed by
      the U.S. Small Business Administration under Section 301(c) or (d) of the
      Small Business Investment Act of 1958; a plan established and maintained
      by a state, its political subdivisions or any agency or instrumentality of
      a state or its political subdivisions for the benefit of its employees, if
      such plan has total assets in excess of $5,000,000; an employee benefit
      plan within the meaning of the Employee Retirement Income Security Act of
      1974 ("ERISA"), if the investment decision is made by a plan fiduciary, as
      defined in Section 3(21) of ERISA, which is either a bank, savings and
      loan association, insurance company, or registered investment advisor, or
      if the employee benefit plan has total assets in excess of $5,000,000 or,
      if a self-directed plan, with investment decisions made solely by persons
      that are accredited investors.

(2)   A private business development company as defined in Section 202(a)(22) of
      the Investment Advisers Act of 1940.

(3)   An organization described in Section 501(c)(3) of the Internal Revenue
      Code, corporation, Massachusetts or similar business trust, or
      partnership, not formed for the specific purpose of acquiring the
      securities offered, with total assets in excess of $5,000,000.

(4)   A director or executive officer of the Acquiror.

(5)   A natural person whose individual net worth, or joint net worth with that
      person's spouse, at the time of his or her purchase exceeds $1,000,000.

(6)   A natural person who had an individual income in excess of $200,000 in
      each of the two most recent years or joint income with that person's
      spouse in excess of $300,000 in each of those years and has a reasonable
      expectation of reaching the same income level in the current year.

(7)   A trust, with total assets in excess of $5,000,000, not formed for the
      specific purpose of acquiring the securities offered, whose purchase is
      directed by a sophisticated person as described in Rule 506(b)(2)(ii)
      (i.e., a person who has such knowledge and experience in financial and
      business matters that he is capable of evaluating the merits and risks of
      the prospective investment).

<PAGE>

(8)   An entity in which all of the equity owners are accredited investors. (If
      this alternative is relied upon, the Shareholder must identify each equity
      owner and provide statements signed by each demonstrating how each is
      qualified as an accredited investor.)

<PAGE>

                                    EXHIBIT C

                           DEFINITION OF "U.S. PERSON"

(1)   "U.S. person" (as defined in Regulation S) means:

      (i)   Any natural person resident in the United States;

      (ii)  Any partnership or corporation organized or incorporated under the
            laws of the United States;

      (iii) Any estate of which any executor or administrator is a U.S. person;

      (iv)  Any trust of which any trustee is a U.S. person;

      (v)   Any agency or branch of a foreign entity located in the United
            States;

      (vi)  Any non-discretionary account or similar account (other than an
            estate or trust) held by a dealer or other fiduciary for the benefit
            or account of a U.S. person;

      (vii) Any discretionary account or similar account (other than an estate
            or trust) held by a dealer or other fiduciary organized,
            incorporated, or (if an individual) resident in the United States;
            and

      (viii) Any partnership or corporation if: (A) organized or incorporated
            under the laws of any foreign jurisdiction; and (B) formed by a U.S.
            person principally for the purpose of investing in securities not
            registered under the Securities Act, unless it is organized or
            incorporated, and owned, by accredited investors (as defined in Rule
            501(a)) who are not natural persons, estates or trusts.

(2)   Notwithstanding paragraph (1) above, any discretionary account or similar
      account (other than an estate or trust) held for the benefit or account of
      a non-U.S. person by a dealer or other professional fiduciary organized,
      incorporated, or (if an individual) resident in the United States shall
      not be deemed a "U.S. person."

(3)   Notwithstanding paragraph (1), any estate of which any professional
      fiduciary acting as executor or administrator is a U.S. person shall not
      be deemed a U.S. person if:

      (i)   An executor or administrator of the estate who is not a U.S. person
            has sole or shared investment discretion with respect to the assets
            of the estate; and

      (ii)  The estate is governed by foreign law.

(4)   Notwithstanding paragraph (1), any trust of which any professional
      fiduciary acting as trustee is a U.S. person shall not be deemed a U.S.
      person if a trustee who is not a U.S. person has sole or shared investment
      discretion with respect to the trust assets, and no beneficiary of the
      trust (and no settlor if the trust is revocable) is a U.S. person.

<PAGE>

(5)   Notwithstanding paragraph (1), an employee benefit plan established and
      administered in accordance with the law of a country other than the United
      States and customary practices and documentation of such country shall not
      be deemed a U.S. person.

(6)   Notwithstanding paragraph (1), any agency or branch of a U.S. person
      located outside the United States shall not be deemed a "U.S. person" if:

      (i)   The agency or branch operates for valid business reasons; and

      (ii)  The agency or branch is engaged in the business of insurance or
            banking and is subject to substantive insurance or banking
            regulation, respectively, in the jurisdiction where located.

(7)   The International Monetary Fund, the International Bank for Reconstruction
      and Development, the Inter-American Development Bank, the Asian
      Development Bank, the African Development Bank, the United Nations, and
      their agencies, affiliates and pension plans, and any other similar
      international organizations, their agencies, affiliates and pension plans
      shall not be deemed "U.S. persons."

<PAGE>

                                    EXHIBIT D

                       ACCREDITED INVESTOR REPRESENTATIONS

Each Shareholder indicating that it is an Accredited Investor, severally and not
jointly, further represents and warrants to the Acquiror as follows:

1.    Such Shareholder qualifies as an Accredited Investor on the basis set
      forth on its signature page to this Agreement.

2.    Such Shareholder has sufficient knowledge and experience in finance,
      securities, investments and other business matters to be able to protect
      such Shareholder's interests in connection with the transactions
      contemplated by this Agreement.

3.    Such Shareholder has consulted, to the extent that it has deemed
      necessary, with its tax, legal, accounting and financial advisors
      concerning its investment in the Acquiror Shares.

4.    Such Shareholder understands the various risks of an investment in the
      Acquiror Shares and can afford to bear such risks for an indefinite period
      of time, including, without limitation, the risk of losing its entire
      investment in the Acquiror Shares.

5.    Such Shareholder has had access to the Acquiror's publicly filed reports
      with the SEC.

6.    Such Shareholder has been furnished during the course of the transactions
      contemplated by this Agreement with all other public information regarding
      the Acquiror that such Shareholder has requested and all such public
      information is sufficient for such Shareholder to evaluate the risks of
      investing in the Acquiror Shares.

7.    Such Shareholder has been afforded the opportunity to ask questions of and
      receive answers concerning the Acquiror and the terms and conditions of
      the issuance of the Acquiror Shares.

8.    Such Shareholder is not relying on any representations and warranties
      concerning the Acquiror made by the Acquiror or any officer, employee or
      agent of the Acquiror, other than those contained in this Agreement.

9.    Such Shareholder is acquiring the Acquiror Shares for such Shareholder's
      own account, for investment and not with a view to distribution or resale
      to others.

10.   Such Shareholder will not sell or otherwise transfer the Acquiror Shares,
      unless either (A) the transfer of such securities is registered under the
      Securities Act or (B) an exemption from registration of such securities is
      available.

11.   Such Shareholder understands and acknowledges that the Acquiror is under
      no obligation to register the Acquiror Shares for sale under the
      Securities Act.

<PAGE>

12.   Such Shareholder consents to the placement of a legend on any certificate
      or other document evidencing the Acquiror Shares substantially in the form
      set forth in Section 4.3.1.

13.   Such Shareholder represents that the address furnished by such Shareholder
      on its signature page to this Agreement and in Exhibit A is such
      Shareholder's principal residence if he is an individual or its principal
      business address if it is a corporation or other entity.

14.   Such Shareholder understands and acknowledges that the Acquiror Shares
      have not been recommended by any federal or state securities commission or
      regulatory authority, that the foregoing authorities have not confirmed
      the accuracy or determined the adequacy of any information concerning the
      Acquiror that has been supplied to such Shareholder and that any
      representation to the contrary is a criminal offense.

15.   Such Shareholder acknowledges that the representations, warranties and
      agreements made by such Shareholder herein shall survive the execution and
      delivery of this Agreement and the purchase of the Acquiror Shares.

<PAGE>

                                    EXHIBIT E

                         NON-U.S. PERSON REPRESENTATIONS

Each Shareholder indicating that it is not a U.S. person, severally and not
jointly, further represents and warrants to the Acquiror as follows:

1.    At the time of (a) the offer by the Acquiror and (b) the acceptance of the
      offer by such Shareholder, of the Acquiror Shares, such Shareholder was
      outside the United States.

2.    No offer to acquire the Acquiror Shares or otherwise to participate in the
      transactions contemplated by this Agreement was made to such Shareholder
      or its representatives inside the United States.

3.    Such Shareholder is not purchasing the Acquiror Shares for the account or
      benefit of any U.S. person, or with a view towards distribution to any
      U.S. person, in violation of the registration requirements of the
      Securities Act.

4.    Such Shareholder will make all subsequent offers and sales of the Acquiror
      Shares either (x) outside of the United States in compliance with
      Regulation S; (y) pursuant to a registration under the Securities Act; or
      (z) pursuant to an available exemption from registration under the
      Securities Act. Specifically, such Shareholder will not resell the
      Acquiror Shares to any U.S. person or within the United States prior to
      the expiration of a period commencing on the Closing Date and ending on
      the date that is one year thereafter (the "Distribution Compliance
      Period"), except pursuant to registration under the Securities Act or an
      exemption from registration under the Securities Act.

5.    Such Shareholder is acquiring the Acquiror Shares for such Shareholder's
      own account, for investment and not for distribution or resale to others.

6.    Such Shareholder has no present plan or intention to sell the Acquiror
      Shares in the United States or to a U.S. person at any predetermined time,
      has made no predetermined arrangements to sell the Acquiror Shares and is
      not acting as a Distributor of such securities.

7.    Neither such Shareholder, its Affiliates nor any Person acting on such
      Shareholder's behalf, has entered into, has the intention of entering
      into, or will enter into any put option, short position or other similar
      instrument or position in the U.S. with respect to the Acquiror Shares at
      any time after the Closing Date through the Distribution Compliance Period
      except in compliance with the Securities Act.

8.    Such Shareholder consents to the placement of a legend on any certificate
      or other document evidencing the Acquiror Shares substantially in the form
      set forth in Section 4.3.2.

9.    Such Shareholder is not acquiring the Acquiror Shares in a transaction (or
      an element of a series of transactions) that is part of any plan or scheme
      to evade the registration provisions of the Securities Act.

<PAGE>

10.   Such Shareholder has sufficient knowledge and experience in finance,
      securities, investments and other business matters to be able to protect
      such Shareholder's interests in connection with the transactions
      contemplated by this Agreement.

11.   Such Shareholder has consulted, to the extent that it has deemed
      necessary, with its tax, legal, accounting and financial advisors
      concerning its investment in the Acquiror Shares.

12.   Such Shareholder understands the various risks of an investment in the
      Acquiror Shares and can afford to bear such risks for an indefinite period
      of time, including, without limitation, the risk of losing its entire
      investment in the Acquiror Shares.

13.   Such Shareholder has had access to the Acquiror's publicly filed reports
      with the SEC.

14.   Such Shareholder has been furnished during the course of the transactions
      contemplated by this Agreement with all other public information regarding
      the Acquiror that such Shareholder has requested and all such public
      information is sufficient for such Shareholder to evaluate the risks of
      investing in the Acquiror Shares.

15.   Such Shareholder has been afforded the opportunity to ask questions of and
      receive answers concerning the Acquiror and the terms and conditions of
      the issuance of the Acquiror Shares.

16.   Such Shareholder is not relying on any representations and warranties
      concerning the Acquiror made by the Acquiror or any officer, employee or
      agent of the Acquiror, other than those contained in this Agreement.

17.   Such Shareholder will not sell or otherwise transfer the Acquiror Shares,
      unless either (A) the transfer of such securities is registered under the
      Securities Act or (B) an exemption from registration of such securities is
      available.

18.   Such Shareholder understands and acknowledges that the Acquiror is under
      no obligation to register the Acquiror Shares for sale under the
      Securities Act.

19.   Such Shareholder represents that the address furnished by such Shareholder
      on its signature page to this Agreement and in Exhibit A is such
      Shareholder's principal residence if he is an individual or its principal
      business address if it is a corporation or other entity.

20.   Such Shareholder understands and acknowledges that the Acquiror Shares
      have not been recommended by any federal or state securities commission or
      regulatory authority, that the foregoing authorities have not confirmed
      the accuracy or determined the adequacy of any information concerning the
      Acquiror that has been supplied to such Shareholder and that any
      representation to the contrary is a criminal offense.

21.   Such Shareholder acknowledges that the representations, warranties and
      agreements made by such Shareholder herein shall survive the execution and
      delivery of this Agreement and the purchase of the Acquiror Shares.

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