Funding And Pay-off Agreement

FUNDING AND PAY-OFF AGREEMENT
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THIS FUNDING AND PAY-OFF AGREEMENT (this "AGREEMENT") is made and entered into as of January 31, 2005 by and among Compagnie Teckn-O-Laser Global/Teckn-O-Laser Global Company, a Nova Scotia unlimited liability company ("TARGET"), Teckn-O-Laser Company/Compagnie Teckn-O-Laser, an unlimited liability company amalgamated under the laws of Nova Scotia and a wholly owned subsidiary of Target ("CANCO"), Tecknolaser USA Inc., a Delaware corporation and initially a wholly owned subsidiary of Target ("USCO"), each of Yvon Leveille, Alain Lachambre, each on behalf of himself and on behalf of any entity named in the respective signature block on the signature page hereof, and Celine Plourde (the preceding individuals, in their respective capacities, are collectively referred to as the "TOLG SHAREHOLDERS"), Adsero Corp., a Delaware corporation ("ADSERO"), YAC Corp., a Delaware corporation ("YAC"), 3091732 Nova Scotia Company, a Nova Scotia unlimited liability company and wholly owned subsidiary of YAC ("CALLCO"), 3091503 Nova Scotia Company, a Nova Scotia unlimited liability company ("TAC"), Barrington Bank International Limited, a Bahamian banking company ("LENDER"), and the Caisse de depot et placement du Quebec, an entity formed by statute under the laws of Quebec ("CDP"). The parties to this Agreement are sometimes referred to herein individually as a "PARTY" and collectively as the "PARTIES".


RECITALS
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1. Lender is going to make a loan to Canco in the principal amount of
Cdn.$2.0 million (the "LOAN") pursuant to the terms of that certain
Loan Agreement between Lender and Canco (the "LOAN AGREEMENT"), the
proceeds of which Loan are going to be used to pay a dividend to
Target.


2. Adsero is raising funds through private placements of its equity and
convertible debt, the equity portion of which shall be in the minimum
amount specified in the Loan Agreement (collectively, the "PRIVATE
PLACEMENT"). Adsero shall deposit $2,100,000 (including the gross
proceeds of the Private Placement, the "ADSERO EQUITY") into the
Acquisition Escrow Account (as defined in Section 1.1(a)(i) below).


3. Target is indebted to CDP pursuant to existing debentures or other
instruments issued by Target to CDP (the "CDP DEBT"). The amounts
required by CDP to repay the CDP Debt is reflected in a payoff letter
by CDP addressed to Canco and Lender (a copy of which is attached as
Exhibit F, hereinafter the "CDP PAYOFF LETTER"). Target will use the
Loan proceeds of Canco's dividend (i) to repay the CDP Debt, (ii) to
make a loan of $150,000 to TAC (the "TARGET LOAN"), (iii) to subscribe
for Canco shares valued at $750,000, and (iv) to pay fees aggregating
approximately $500,000, including (A) the legal fees described in
Exhibit D (the "LENDER'S LEGAL FEES") and (B) other fees in connection
with the transactions contemplated hereby.


4. After the payments described in Recital 3 are completed (other than the
payment of the fees described in clause (iv)(B)), Adsero will close the
Private Placement and then subscribe for shares of YAC and contribute
the Adsero Equity to YAC in consideration for such YAC shares; YAC will
pay for shares of Callco that YAC has acquired and contribute the
Adsero Equity to Callco in consideration for such Callco shares, and
Callco will pay for shares of TAC that Callco has acquired and
contribute the Adsero Equity to TAC in consideration for such TAC
shares. Upon the conclusion of the foregoing steps, the organizational
structure will be as set forth on Exhibit A.


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5. TAC will use (i) the Adsero Equity, and (i) the proceeds of the Target
Loan to acquire the entirety of equity interest in Target currently
held by the TOLG Shareholders and by CDP (the latter being the "CDP
Equity"; the CDP Debt and the CDP Equity are collectively referred to
as the "CDP INTEREST", and the aggregate amount required to be
delivered to CDP for the CDP Interest is hereinafter referred to as the
"CDP PAYOFF AMOUNT"). The shares held by the TOLG Shareholders will be
acquired pursuant to the Share Purchase Agreement by and among the
parties hereto other than CDP and Lender (the "SHARE PURCHASE
AGREEMENT"). Concurrently with the payments described in the preceding
sentence, (a) Adsero will issue to the TOLG Shareholders preferred
shares of Adsero entitling the TOLG Shareholders to the voting rights
set forth in Adsero's certificate of incorporation, as amended, and (b)
TAC will issue to the TOLG Shareholders preferred shares of TAC and
shares of TAC that are exchangeable into shares of Adsero.


6. The parties find it necessary and desirable to enter into this
Agreement in order to, inter alia, (i) govern the terms under, and the
order in which, executed copies (originals, pdf or facsimile) of the
documents, instruments, agreements and other materials required for the
closing contemplated hereby (collectively, the "CLOSING DOCUMENTS")
shall be delivered and released in connection with the consummation of
the transactions described in Recitals 1-5 above and certain
agreements, instruments and other documents related thereto, including
(a) the Share Purchase Agreement and the Loan Agreement, and (b) govern
the terms under, and the order in which, payments will be made in
connection with the closing of all of the Transactions.


ARTICLE 1
DOCUMENT ESCROW
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1.1 DELIVERIES INTO ESCROW.


(a) Each party agrees to deliver all of the Closing Documents to
be delivered in connection with the Closing into escrow to the
following counsel:


(i) Closing Documents related to the Loan Agreement have
been delivered to the Montreal office of Davies Ward
Phillips & Vineberg LLP, counsel to Lender ("LOAN
ESCROW AGENT"); and


(ii) Closing Documents related to the Share Purchase
Agreement and the repayment and acquisition, as
applicable, of the CDP Interest (the "CDP
ACQUISITION") have been delivered to Charette Nantel
("ACQUISITION ESCROW AGENT"; each of Loan Escrow
Agent and Acquisition Escrow Agent is hereby referred
to as an "ESCROW AGENT" and collectively as the
"ESCROW AGENTS").


Each of the Parties shall promptly give Notice (as defined in
paragraph (b) below) confirming each of (y) the delivery to
the applicable Escrow Agent of all of such Party's Closing
Documents, as contemplated herein, and any funds (the "ESCROW
FUNDS") required to be delivered into the Escrow Accounts
established pursuant to Section 1.1(c) below, and (z) the
satisfaction of all of the conditions precedent to such
Party's transactions (by way of non-exhaustive example, the
conditions to funding under the Loan Agreement and the
conditions to consummating the acquisition and share exchange
contemplated in the Share Purchase Agreement), other than the
steps set forth in Section 2.2 of this Agreement. The Parties
hereby direct each Escrow Agent to hold such Closing Documents
and the Escrow Funds in escrow subject to the terms of this


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Agreement, until such Closing Documents and Escrow Funds are
released from escrow in accordance herewith. After the
aforementioned Notice from all of the respective Parties as
described in the first sentence of this paragraph, each Escrow
Agent shall deliver a Notice that this Agreement has become
binding upon all of the Parties, and thereafter the release of
the Closing Documents and Escrow Funds will be subject to the
requirements of this Agreement.


On the CLOSING DATE (as described in Section 2.1(a)), which
shall be no sooner than two Business Days after the later of
the Notices delivered by the Escrow Agents, the transactions
described in Section 2.2 shall be implemented. For purposes of
the foregoing, a "BUSINESS DAY" is a day on which banks in
Quebec are authorized to be closed or on which the Toronto
Stock Exchange is closed for trading.


(b) Notices to be made under this Agreement shall be sufficient if
made to the individuals set forth on Exhibit B attached
hereto, if made to such individuals by e-mail transmission, by
facsimile, by hand-delivery, or in person using the contact
information provided in such Exhibit B (a "Notice").


(c) Each party also acknowledges that the following funds have
been wired into an escrow account (each, an "ESCROW ACCOUNT")
held by the applicable Escrow Agent:


(i) Adsero has caused the Adsero Equity, as described in
Recital 2, to be wired to the trust account of the
Acquisition Escrow Agent (the "ACQUISITION ESCROW
FUNDS").


(ii) Lender has caused Loan proceeds of $2,000,000 to be
wired to the trust account of the Loan Escrow Account
(the "LOAN ESCROW FUNDS").


1.2 INITIATION/ BINDING NATURE OF OBLIGATIONS. Without in any way
diminishing Section Section 1.1(a) above, once the Notices from Escrow
Agents are received by the Parties reflecting that all closing
deliveries and the Escrow Funds described in Section 1.1(c) have been
received, each Party shall thereafter be and hereby is, subject to the
terms of this Agreement, obligated to take the actions designated to be
taken by such Party in Article 2 below. If the Parties become so
obligated, any instructions or directions set forth herein shall be
irrevocable, the parties hereby acknowledging and agreeing that these
instructions are coupled with an interest. If the Parties do not become
so obligated on or before February 2, 2005, then each Escrow Agent
shall return the Closing Documents and the applicable Escrow Funds to
the Party that delivered same to it.


1.3 ESCROW ACCOUNT. The parties agree that due to the short timeframe for
delivering the Escrow Funds to the applicable Party, neither Escrow
Agent shall be required to invest such funds in an interest-bearing
account. If, at the sole discretion of an Escrow Agent, the applicable
Escrow Funds are invested, then all interest shall be delivered by the
applicable Escrow Agent to the Party that so delivered such Escrow
Funds, and no other party shall have any claim thereto. Each Party
agrees to provide the applicable Escrow Agent with such information,
forms and certifications as may be required in connection with the
establishment of the Escrow Account.


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ARTICLE 2
FUNDING/ TRANSACTION STEPS
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2.1 TRANSACTION PROCESS.


(a) The Parties shall agree upon a Closing Date, and in the
absence of such a unanimous choice of Closing Date, the
Closing Date deemed to have been chosen shall be the Business
Day that is two Business Days from the date of the last
Party's Notice under the first sentence of the penultimate
paragraph of Section 1.1(a).


(b) All transactions to be effected pursuant to Section 2.2
involving the transfer of funds shall be effected by delivery
of checks. The parties acknowledge and agree that delivery of
checks from the Escrow Accounts to each party at its notice
address set forth on Exhibit B in the amounts set forth in
Exhibit D, shall constitute good delivery of such funds.
Exhibit E sets forth the net payments required after giving
effect to the directions in Section 2.2. If all of the
Transactions described in Section 2.2 are not completed in a
timely manner, then all funds advanced or paid shall be
returned promptly (but in no event later than five (5)
Business Days after the Closing Date) to the Party that
initiated the advance or payment of such funds into escrow.


2.2 FLOW OF FUNDS.


(a) For purposes of this Section 2.2 and elsewhere herein,
reference is hereby made to the list of defined "Transactions"
set forth in Exhibit C attached hereto.


(b) The following Parties shall take the actions described below
in the order set forth below, although the Closing Documents
effecting these Transactions shall only be released as set
forth in Section 2.3:


(i) On the Closing Date, Lender shall make the Loan
required pursuant to Transaction 1, but subject to
the payment directions set forth in paragraphs (ii),
(iii), (v) and (vi)(B) below. Lender hereby directs
that Loan Escrow Agent cause the delivery (by check)
to Canco of the Escrow Funds that Lender deposited
into the Loan Escrow Account (subject to the
directions in the provisions referred to above).


(ii) In respect of Transaction 2, Canco hereby directs
Lender to advance (on the Closing Date) the proceeds
of the Loan from Transaction 1 to the order or
direction of Target.


(iii) in respect of Transaction 3, Target hereby directs


(A) Lender to re-direct to Canco $750,000 of the
Loan proceeds in consideration for the
issuance of additional shares of Canco to
Target;


(B) Lender to use a portion of the Loan proceeds
in full repayment of the CDP Debt (in
accordance with the CDP Payoff Letter). CDP
hereby acknowledges that the CDP Payoff
Letter is hereby incorporated herein by
reference, and that upon receipt of payment
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