ASSET PURCHASE AGREEMENT(SAMPLE)

This sample agreement was reviewed by Robert Millar of McDougall ReadyLaw Firm, Regina, Saskatchewan.

Reprinted from the SKLESI seminar materials: Buying and Selling a Business,May 1994.

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Article 1 -Article 2 -

Article 3 -Article 4 -

Article 5 -

Article 6 -

Article 7 -

Article 8 -

Article 9 -

Index

ASSET PURCHASE AGREEMENT

Interpretation

Purchase and Sale

Representations and Warranties

Survival and Limitations of Representations andWarranties

Covenants

Conditions

Closing

Indemnification and Set-off

General Provisions

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ASSET PURCHASE AGREEMENT

THIS AGREEMENT made as of the day of _

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BETWEEN:

[name of purchaser corporation], a corporationincorporated under the laws of the Province ofSaskatchewan,(the "Purchaser")

OF THE FIRST PART

AND:

[name of vendor corporation], a corporationincorporated under the laws of Saskatchewan,(the "Vendor")

OF THE SECOND PART

AND:

[name of third party, if any], of the City of., in the Province of Saskatchewan,(the "Shareholder")

OF THE THIRD PART

WHEREAS:

1. The Vendor carries on the business of [description];

2. The Vendor wishes to sell, and the Purchaser wishes topurchase, the undertaking and all of the assets of suchbusiness upon the terms and subject to the conditionshereinafter contained;

3. The Shareholder controls the Vendor.

[A] THE PARTIES AGREE AS FOLLOWS:

OR

[B] NOW THEREFORE THIS AGREEMENT WITNESSES that in considerationof the mutual covenants and agreements herein contained and the sumof One ($1.00) Dollar of lawful money of Canada and other good andvaluable consideration paid by each of the parties hereto to eachof the other parties hereto (the receipt and sufficiency of whichare hereby acknowledged), it is agreed among the parties hereto asfollows:

OR

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[e] NOW THEREFORE in consideration of the premises and the mutualagreements and covenants herein contained, the parties heretohereby covenant and agree as follows:

ARTICLE 1

INTERPRETATION

1.1 DEFINED TERMS:

In this Agreement and in the schedules hereto, unless there issomething in the subject matter or context inconsistent therewith,the following terms and expressions will have the followingmeanings:

[A] (a) "Affiliate" of any person means any corporation which,directly or indirectly, is controlled by, controls or isunder direct or indirect common control with such person:

OR

[B] (a) "Affiliate" means affiliates as defined in The BusinessCorporations Act of Saskatchewan [or appropriatestatute]:

(b) "arm's length" will have the meaning ascribed to suchterm under the Income Tax Act, S.C. 1970-71-72, c. 63(Canada) ;

( c ) "Assumed Contracts" means all contracts, agreements,.orders, commitments and other engagements by or withthird parties relating to the Business which are includedin the Purchased Assets including, without limitation,the Customer Contracts and the Leases:

( d) "Assumed Liabilities" means the liabilities of the Vendorwhich are to be assumed by the Purchaser pursuant tosection 2.4 hereof;

[A] (e) "[Audited] Financial Statements" means the auditedconsolidated financial statements of the Vendor as at andfor the fiscal year [date), consisting of a balancesheet, an income statement, a statement of changes infinancial position and [name of any other statement,e.g., statement of retained earnings and deficit]together with the notes thereto and the opinion of theVendor's auditors thereon, a copy of which is attachedhereto as Schedule "A", all prepared in accordance withgenerally accepted accounting principles consistentlyapplied;

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OR

[B] (e) "[Audited] Financial Statements" means the auditedconsolidated financial statements of the Vendor as at andfor the fiscal years ended on [date] in each of the yearsto, inclusive, including the balance sheets, incomestatements, statements of changes in financial position,and [name of any other statement, e.g., statement ofretained earnings and deficit] together with the notes tosuch financial statements [and the opinion of theVendor's auditors on such financial statements], copiesof which are attached hereto as Schedule "A", allprepared in accordance with generally accepted accountingprinciples, consistently applied:

(f) "[Audited] Statements Date" means [date of [Audited]Financial Statements];

(g) "Business" means the business carried on by the Vendorwhich primarily involves [description];

[A] (h) "Business Day" means any day other than a day which is aSaturday, a Sunday or a statutory holiday in [city],[province];

OR

[B] (h) "Business Day" means any day on which the Main Branch ofthe [name] Bank in [city], [province] is open forbusiness;

(i) "Closing Date" means [date], or such other date as theVendor and Purchaser may agree upon;

(j ) "Closing Time" means [time] in [city] on the Closing Dateor such other time on the Closing Date as the partieshereto may agree upon;

(k) "Condition" of the Business means the condition of theassets, liabilities, operations, activities, earnings,prospects, affairs or financial position of the Business:

(1) "Control" means, with respect to any corporation, theownership of more than fifty (50%) percent of the votingshares of that corporation, including any shares whichare voting only upon the occurrence of a contingencywhere such contingency has occurred and is continuing;

(m) "Customer Contracts" means any and all agreements enteredinto between the Vendor and one or more third partiesrelating to the sale or provision of goods or services bythe Vendor to such third parties in connection with the

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Business, including unfilled orders, commitments andother engagements by or with such third parties, all ofwhich are listed in Schedule "B" attached hereto;

(n) "Encumbrances" means mortgages, charges, pledges,security interests, liens, encumbrances, actions, claims,demands and equities of any nature whatsoever orhowsoever arising and any rights or privileges capable ofbecoming any of the foregoing;

(0) "Excluded Assets" means those assets of the Businessreferred to in section 2.3 hereof;

(p) "generally accepted accounting principles" means theaccounting principles so described and promulgated by theCanadian Institute of Chartered Accountants which areapplicable as at the date on which any calculation madehereunder is to be effective or as at the date of anyfinancial statements referred to herein, as the case maybe;

(q) "Interim Financial Statements" means the unauditedconsolidated financial statements of the Vendor as at andfor the [number] month period ended [date] consisting ofa balance sheet, an income statement and a statement ofchanges in financial position together with the notesthereto, a copy of which is attached hereto as Schedule"c" ;

(r) "Interim Period" means the period from and including thedate of this Agreement to and including the Closing Date;

(s) "Leased Premises" means all premises leased by the Vendorunder the Leases;

( t ) "Leases" means the leases and the agreements to leaseunder which the Vendor leases any real property, aslisted in Schedule "0" attached hereto;

( u ) "Licence Rights" means all licence and distributionrights relating to the Business described in Schedule "E"attached hereto;

(v) "person" means and includes any individual, corporation,partnership, firm, joint venture, syndicate, association,trust, government, governmental agency or board orcommission or authority, and any other form of entity ororganization;

(w) "Purchase Price" means the sum of $., which is the amountpayable by the Purchaser to the Vendor for all of thePurchased Assets, as provided herein;

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(x) "Purchased Assets" means the undertaking and assets ofthe Business which are to be sold by the Vendor to thePurchaser pursuant to section 2.1 hereof;

(y) "Real Properties" means the real properties owned by theVendor, which are described in Schedule "F" attachedhereto;

(z) ["Statement of Purchased Assets and Assumed Liabilities"means the statement prepared pursuant to paragraph 2. 6 ( c)hereof]; and

( aa) "Warranty Claim" means a claim made by either thePurchaser or the Vendor based on or with respect to theinaccuracy or non-performance or non-fulfilment or breachof any representation or warranty made by the other partycontained in this Agreement or contained in any documentor certificate given in order to carry out thetransactions contemplated hereby.

1.2 BEST OF KNOWLEDGE:

Any reference herein to lithe best of the knowledge" of the Vendorand the Shareholder will mean the actual knowledge of the Vendorand the Shareholder and the knowledge which they would have had ifthey had conducted a diligent inquiry into the relevant subjectmatter.

1.3 SCHEDULES:

The schedules [listed in the Table of Contents to this Agreementand] which are attached to this Agreement are incorporated intothis Agreement by reference and are deemed to be part hereof.

1.4 CURRENCY:

Unless otherwise indicated, all dollar amounts referred to in thisAgreement are in lawful money of Canada.

1.5 CHOICE OF LAW AND ATTORNMENT:

This Agreement shall be governed by and construed in accordancewith the laws of the Province of Saskatchewan and the laws ofCanada applicable therein.

[A] The parties agree that the courts of the Province ofSaskatchewan will have non-exclusive jurisdiction to determineall disputes and claims arising between the parties.

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OR

[BJ The parties agree that the courts of the Province ofSaskatchewan will have exclusive jurisdiction to determine alldisputes and claims arising between the parties.

1.6 INTERPRETATION NOT AFFECTED BY HEADINGS OR PARTYDRAFTING:

The division of this Agreement into articles, sections, paragraphs,subparagraphs and clauses and the insertion of headings are forconvenience of reference only and shall not affect the constructionor interpretation of this Agreement. The terms "this Agreement","hereof ", "herein", "hereunder" and similar expressions refer tothis Agreement and the schedules hereto and not to any particulararticle, section, paragraph, subparagraph, clause or other portionhereof and include any agreement or instrument supplementary orancillary hereto. Each party hereto acknowledges that it and itslegal counsel have reviewed and participated in settling the termsof this Agreement, and the parties hereby agree that any rule ofconstruction to the effect that any ambiguity is to be resolvedagainst the drafting party shall not be applicable in theinterpretation of this Agreement.

1.7 NUMBER AND GENDER:

In this Agreement, unless there is something in the subject matteror context inconsistent therewith:

(a) words in the singular number include the plural and suchwords shall be construed as if the plural had been used; .

(b) words in the plural include the singular and such wordsshall be construed as if the singular had been used; and

(c) words importing the use of any gender shall include allgenders where the context or party referred to sorequires, and the rest of the sentence shall be construedas if the necessary grammatical and terminologicalchanges had been made.

1.8 TIME OF ESSENCE:

Time shall be of the essence hereof.

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ARTICLE 2

PURCHASE AND SALE

2.1 PURCHASED ASSETS:

On the terms and subject to the fulfilment of the conditionshereof, the Vendor hereby agrees to sell, transfer and assign tothe Purchaser, and the Purchaser hereby agrees to purchase andaccept from the Vendor, the undertaking of the Business as a goingconcern and all properties, assets, rights and interests of theVendor related to the Business of every kind and description andwheresoever situate, except for the Excluded Assets. Withoutlimiting the generality of the foregoing, the Purchased Assets willinclude all assets of the Business shown or reflected in the[Audited] Financial Statements, other than Excluded Assets andassets which have been disposed of or consumed in the ordinarycourse of the Business since the [Audited] Statements Date, andwill include the following assets:

( a ) [Cash and Bank Balances: all cash, bank balances, moneysin the possession of banks and other depositories, termor time deposits, guaranteed investment certificates,treasury bills, other securities and other similar cashor cash-equivalent items owned by the Vendor as of theClosing Time;]

(b) Accounts Receivable: all accounts receivable and loansreceivable relating to the Business as of the ClosingTime;

(c) Inventories: all inventories of or relating to theBusiness as of the Closing Time, including all rawmaterials, manufacturing supplies, packaging materials,work in process and finished goods;

(d) Prepaid Expenses: all prepaid expenses relating to theBusiness as of the Closing Time;

(e) Machinery, Equipment and Fumiture: all machinery,equipment, tools, furniture, furnishings and othermiscellaneous items used in or relating to the Businessincluding, without limitation, all those listed inSchedule "G" attached hereto;

( f ) Leased Equipment and Vehicles: all right, title andinterest of the Vendor in and under leases of equipmentand vehicles used in or relating to the Businessincluding, without limitation, all leases and otheragreements listed in Schedule "H" attached hereto;

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(g) Computer Equipment: all of the Vendor's right, title andinterest in all computer hardware used in the Businessincluding, without limitation, that described in Schedule"I" attached hereto;

(h) Real Properties: all right, title and interest of theVendor in the Real Properties, all of which are describedin Schedule "F" attached hereto;

(i) Leased Premises and Leasehold Improvements: all right,title and interest of the Vendor in and to the LeasedPremises and under the Leases (all of which are describedin Schedule "0" attached hereto) including, withoutlimitation, any prepaid rent and security depositsthereunder and all leasehold improvements owned by theVendor and forming part of the Leased Premises;

(j ) Customer Lists and Information: all customer lists,files, data and information relating to customers andprospective customers of the Business as of the ClosingTime including, without limitation, the customer listwhich has been delivered by the Vendor to the Purchaserprior to the date hereof;

(k) Customer Contracts: all right, title and interest of theVendor in and to all Customer Contracts, all of which arelisted in Schedule "B" attached hereto;

(1) Business Records: all books, records, files anddocuments relating to the Business, including withoutlimitation, books of account, ledgers, journals, salesand purchase records, lists of suppliers, creditinformation, cost and pricing information, businessreports, plans and projections and all othercorrespondence, data and information, financial orotherwise, in any format and media whatsoever, related tothe Business;

(m) Goodwill, Name, Etc.: the goodwill of the Business,together with the exclusive right of the Purchaser torepresent itself as carrying on the Business incontinuation of and in succession to the Vendor, and allrights in and title to the name [name of the Business];

(n) Technology, Intellectual Property and Software: alltrade secrets, research data, designs, proprietaryknow-how, technical information, specifications andmaterials in whatever form or media recording orevidencing technology or proprietary information used inor relating to the Business, and all rights and interestsin and to all inventions, patents, applications forpatents, copyrights, trade marks, trade mark

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registrations, trade names, logos, industrial designs andother intellectual property used in or relating to theBusiness, and all computer software used in the Businessincluding all related code, specifications,documentation, revisions, enhancements and modificationsthereto, in whatever form and media, all of which islisted in Schedule "J" attached hereto;

( 0) Licence Rights: all licence and distribution rightsrelating to the Business granted to the Vendor by anythird party under all contracts and agreements (writtenor oral), all of which are listed in Schedule "E"attached hereto;

(p) Regulatory Licences: all licences, registrations andqualifications of the Business required by anygovernmental or regulatory authority, to the extenttransferable;

(q) Insurance Benefits: any benefits payable under allinsurance policies relating to the Business or the otherPurchased Assets in respect of claims based onoccurrences prior to the Closing Time;

(r) Supply Contracts: the full benefit of all contractsproviding for the supply of goods and services to theBusiness, subject to the Purchaser's review andacceptance of such contracts and agreements prior to theClosing Date;

( s ) Warranty Rights and Maintenance Contracts: the fullbenefit of all warranties and warranty rights (expressand implied) against manufacturers or sellers which applyto any of the Purchased Assets and all maintenancecontracts on machinery, equipment and the other PurchasedAssets, subject to the Purchaser's review and acceptanceof such contracts and agreements prior to the ClosingDate; and

(t) Other Agreements: all of the Vendor's rights, title andinterest to and under all other contracts and agreements(written or oral) relating directly or indirectly to theBusiness, subject to the Purchaser's review andacceptance of such contracts and agreements prior to theClosing Date.

2.2 UNASSIGNABLE CONTRACTS:

If any rights, benefits or remedies (hereinafter, in this section,collectively called the "Rights") under any Assumed Contracts arenot assignable by the Vendor to the Purchaser without the consent

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of the other party thereto (hereinafter, in this section, calledthe "Third Party") and such consent is not obtained, then, unlessthe Purchaser exercises its rights under section 6.2 hereof:

(a) the Vendor will hold the Rights for the benefit of thePurchaser;

(b) the Vendor will, at the request and expense and under thedirection of the Purchaser, in the name of the Vendor orotherwise as the Purchaser shall specify, take all suchactions and do all such things as shall, in the opinionof the Purchaser, be necessary or desirable in order thatthe obligations of the Vendor under such AssumedContracts may be performed in a manner such that thevalue of the Rights shall be preserved and shall enure tothe benefit of the Purchaser and such that all moneysreceivable under the Assumed Contracts may be received bythe Purchaser;

(c) the Vendor will promptly pay over to the Purchaser allsuch moneys collected by the Vendor in respect of suchAssumed Contracts; and

(d) to the extent permitted by the Third Party and provided,in the Purchaser's opinion, it would not be prejudicialto the Purchaser's rights to do so, the Purchaser willperform the obligations under such Assumed Contracts onbehalf of the Vendor, and will indemnify the Vendoragainst all liabilities, costs and expenses incurred bythe Vendor in performing such obligations.

2.3 EXCLUDED ASSETS:

There shall be specifically excluded from the assets beingpurchased and sold hereunder, the following assets, properties,rights and interests of the Vendor related to the Business:

(a) [Cash and Bank Balances: all cash, bank balances, moneysin the possession of banks and other depositories, termor time deposits, guaranteed investment certificates,treasury bills, other securities and other similar cashor cash-equivalent items owned by the Vendor as of theClosing Date;]

(b) Income Tax Refunds: income tax refunds and other taxrefunds receivable by the Vendor;

(c) Life Insurance: the benefit of insurance policies on thelife of [name(s)]; and

(d) [describe other excluded assets].

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2.4 ASSUMED LIABILITIES:

On the terms and subject to the conditions herein contained, at theClosing Time the Purchaser will assume and thereafter pay, perform,discharge and satisfy the following liabilities of the Vendorrelating to the Business, and will indemnify the Vendor againstsuch liabilities:

(a) trade accounts payable and accrued liabilities to tradecreditors of the Business incurred in the ordinary courseof the. routine daily affairs of the Business and existingas of the Closing Date [in the amounts set forth in theStatement of Purchased Assets and Assumed Liabilities];and

(b) all liabilities and obligations of the Vendor accruing onand after the Closing Date under the Assumed Contracts.

2.5 RETAINED LIABILITIES AND INDEMNITY:

The Purchaser will not assume and will not be liable for, and theVendor will indemnify the Purchaser from and against, allobligations, commitments and liabilities of and claims against theVendor (whether absolute, accrued or contingent) relating to theBusiness, except for the Assumed Liabilities. Without limiting thegenerality of the foregoing, it is agreed that the Purchaser willhave no liability for any of the following obligations orliabilities:

(a) all liabilities in respect of all indebtedness of theVendor to all persons (other than the trade payablesreferred to in paragraph 2.4(a) hereof);

(b) all product liability claims and liabilities for warrantyor product return claims relating to any product orservice of the Business produced, sold, performed ordelivered prior to the Closing Date;

(c) all liabilities for all taxes, duties, levies,assessments and other such charges, including anypenalties, interests and fines with respect thereto,payable by the Vendor to any federal, provincial,municipal or other government or governmental agency,authority, board, bureau or commission, domestic orforeign, including, without limitation, any taxes inrespect of or measured by the sale, consumption orperformance by the Vendor of any product or service priorto the Closing Date and any tax pursuant to The Educationand Health Tax Act or any similar legislation in respectof the Business prior to the Closing Date;

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(d) all liabilities for salary, bonus, vacation pay and othercompensation and all liabilities under employee benefitplans of the Vendor relating to employment of all personsin the Business prior to the Closing Date;

(e) all severance payments, damages for wrongful dismissaland all related costs in respect of the termination bythe Vendor of the employment of any employee of theBusiness who does not accept the Purchaser's offer ofemployment referred to in paragraph 5.2 ( 2) hereof [and inrespect of any employee of the Business who is notoffered employment by the Purchaser]; and

(f) all liabilities for claims for injury, disability, deathor workers' compensation arising from or related toemployment in the Business prior to the Closing Date.

2.6 PURCHASE PRICE:

[A] The price payable by the Purchaser to the Vendor for thePurchased Assets will be the sum of $-.

OR

[B) (a) The Purchase Price payable by the Purchaser to the Vendorfor the Purchased Assets will be the sum of:

(i) $-; and

(ii) the Aggregate Book Value of the Purchased Assets asof the close of business on the day immediatelypreceding the Closing Date [or other date], ashereinafter determined.

(b) For purposes of this section, the "Aggregate Book Valueof the Purchased Assets" means the aggregate of the bookvalues of all the Purchased Assets as set forth in theStatement of Purchased Assets and Assumed Liabilities asat the close of business on the day immediately precedingthe Closing Date [or other date], prepared in accordancewith (c) of this section. .

(c) [The parties] will cause the Statement of PurchasedAssets and Assumed Liabilities to be prepared as at theclose of business on the day immediately preceding theClosing Date [or other date], as soon as possible and, inany event, no later than [date]. The Statement ofPurchased Assets and Assumed Liabilities will set forththe book values as of the close of business on the dayimmediately preceding the Closing Date [or other date] ofthe Purchased Assets and of the Assumed Liabilities,

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determined in accordance with generally acceptedaccounting principles applied on a basis consistent withthe [Audi ted] Financial Statements, except that[exceptions] • The Statement of Purchased Assets andAssumed Liabilities will be audited [by the Vendor'saccounting firm] or by [name], which is an independentaccounting firm jointly selected by the Vendor and thePurchaser] or [jointly by an accounting firm designatedby the Vendor and an accounting firm designated by thePurchaser]. The fees and expenses of such accountingfirm(s) in auditing the Statement of Purchased Assets andAssumed Liabilities will be paid [in equal amounts by theVendor and the Purchaser].

2.7 PAYMENT OF PURCHASE PRICE:

The Purchase Price will be paid and satisfied as follows:

(a) Concurrently with the execution of this Agreement, thePurchaser will pay to [name of deposit holder, oftenVendor's counsel] in trust, by certified cheque or bankdraft, the sum of $. (hereinafter, in this section,called the "Deposit") as a deposit. The Deposit will bedeposited by [name of deposit holder] in aninterest-bearing account of a Canadian chartered bank ortrust company in [city] in the name of [name of depositholder] and will be dealt with in accordance with thefollowing provisions:

(i) If the purchase and sale of the Purchased Assets iscompleted at the Closing Time, the Deposit plus allinterest earned thereon will be released from trust'and applied toward satisfaction of the PurchasePrice;

(ii) If the purchase and sale of the Purchased Assets isnot completed for any reason other than the failureof the Purchaser to satisfy any of the conditionsset out in section 6.03 hereof which is within thereasonable control of the Purchaser, the Depositplus all interest earned thereon will be releasedfrom trust and returned to the Purchaser;

(iii)If the purchase and sale of the Purchased Assets isnot completed due to the failure of the Purchaserto satisfy any of the conditions set out in section6.3 hereof which is within the reasonable controlof the Purchaser, then the Deposit plus allinterest thereon will be released from trust andforfeited and paid to the Vendor [in fullsatisfaction of all damages, losses, costs and

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expenses incurred by the Vendor, and the Vendoracknowledges that it will not have any other remedyor claim against the Purchaser as a result of thesale of the Purchased Assets not being completed].

(b) At the Closing Time, the Purchaser will satisfy a portionof the Purchase Price in an amount equal to $-, being theestimated aggregate book value of the AssumedLiabilities, by the assumption of the AssumedLiabilities.

(c) At the Closing Time, the Purchaser will pay to [name], intrust, by certified cheque or bank draft, the sum of S-,to be held on the terms and subject to the conditions ofan Escrow Agreement in the form of the draft agreementattached hereto as Schedule "K".

(d) At the Closing Time, the Purchaser will pay to theVendor, by certified cheque or bank draft, as an estimateof the balance of the Purchase Price, the sum of $ ­(hereinafter, in this section, called the "EstimatedAmount" ).

(e) As soon as the Statement of Purchased Assets and AssumedLiabilities is completed, the parties will calculate theactual balance of the Purchase Price which should havebeen paid by the Purchaser to the Vendor, which will bethe amount equal to:

(i) the total amount of the Purchase Price;

(ii) minus the sum of the Deposit plus all interestthereon paid to the Vendor pursuant to paragraph(a) of. this section;

(iii )minus the aggregate book value of the AssumedLiabilities as set forth on the Statement ofPurchased Assets and Assumed Liabilities;

(iv) [minus the sum of $[amount] paid by the Purchaserto [name] pursuant to paragraph (c) of thissection].

If the actual balance of the Purchase Price as calculatedpursuant to this paragraph exceeds the Estimated Amountpaid by the Purchaser to the Vendor pursuant to paragraph(d) of this section, then within five (5) Business Daysafter the Statement of Purchased Assets and AssumedLiabilities is completed, the Purchaser will pay to theVendor the amount of such excess by certified cheque orbank draft. I f the Estimated Amount paid by thePurchaser to the Vendor pursuant to paragraph (d) of this

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section exceeds the actual balance of the Purchase Priceas calculated pursuant to this paragraph, then withinfive (5) Business Days after the Statement of PurchasedAssets and Assumed Liabilities is completed, the Vendorwill pay to the Purchaser the amount of such excess bycertified cheque or bank draft.

2.8 ALLOCATION OF PURCHASE PRICE:

The Purchase Price shall be allocated among the Purchased Assets inthe manner provided by Schedule "L" attached hereto. The Vendorand the Purchaser shall file their respective tax returns preparedin accordance with such allocation.

2.9 SECTION 22 ELECTION RE: ACCOUNTS RECEIVABLE:

The Vendor and the Purchaser will jointly execute, and each of themwill file promptly following the Closing Date, an election under s.22 of the Income Tax Act, S.C. 1970-71-72, c. 63 (Canada) withrespect to the accounts receivable of the Business included in thePurchased Assets. Such election will designate the portion of thePurchase Price allocated to the accounts receivable pursuant tosection 2.08 hereof as the consideration paid therefor by the

) Purchaser.

2.10 PAYMENT OF TAXES:

The Purchaser shall be liable for and shall pay all applicablefederal and provincial sales taxes, land transfer taxes, goods andservices taxes, excise taxes and all other taxes (other than incometaxes of the Vendor), duties and other like charges properlypayable upon and in connection with the conveyance and transfer ofthe Purchased Assets to the Purchaser. The Vendor will do andcause to be done such things as are reasonably requested to enablethe Purchaser to comply with such obligation in an efficientmanner.

2.11 GOODS AND SERVICES TAX EXEMPTION:

( a ) The Vendor and the Shareholder hereby represent andwarrant to the Purchaser that:

(i) the Vendor is registered for purposes of Part IX ofthe Exc1se Tax Act, R.S.C. 1985, c. £-13 (Canada)(hereinafter, in this section, called the "GSTLegislation" ) ;

)

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(ii) the Purchased Assets comprise all or substantiallyall of the property used in the Business; and

(iii )the Business is a "commercial activity" for purposesof the GST Legislation.

(b) The Purchaser hereby represents and warrants to theVendor that the Purchaser is registered for purposes ofthe GST Legislation.

(c) The Vendor and the Purchaser will jointly execute inprescribed form, and the Vendor will file within therequired time, an election under s.167(1) of the ExciseTax Act (Canada) that no tax be payable pursuant to theGST Legislation with respect to the purchase and sale ofthe Purchased Assets hereunder.

(d) [The Purchaser will indemnify the Vendor against any tax,interest or penalties arising from a determination thatthe conditions for filing the election pursuant tos.167(1) of the Excise Tax Act (Canada) have not beensatisfied for any reasons other than the inaccuracy ofany of the representations and warranties made by theVendor pursuant to paragraph (a) of this section.]

2.12 ACCOUNTS RECEIVABLE:

(a) The Purchaser will use reasonable efforts to collect allaccounts receivable of the Business included 1n thePurchased Assets in the ordinary course of the Business.Accounts receivable will be deemed to be collected on thebasis that the oldest accounts are collected first,unless a payment by a customer corresponds to thespecific amount of a particular invoice, in which case,the payment will be applied to that invoice, or unless acustomer specifically indicates that a payment is to beapplied toward a particular invoice. The Purchaser willprovide the Vendor with a written report at the end ofeach month following the Closing Date of the amount ofthe accounts receivable included in the Purchased Assetswhich have not been collected from customers to thatdate.

(b) If the amount of the accounts receivable collected by thePurchaser (hereinafter, 1n this section, called the"Collected Amount") within [number] days following theClosing Date is less than the book value of the AccountsReceivable set forth in the Statement of Purchased Assetsand Assumed Liabilities (net of the reserve, if any,reflected in the Statement of Purchased Assets andAssumed Liabilities for bad debts and doubtful accounts)

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(such book value being hereinafter, in this section,called the "Book Value Amount"), then the Purchaser willbe entitled, by written notice given to the Vendor at anytime during the [number] day period thereafter, to selland transfer to the Vendor, and to require the Vendor torepurchase from the Purchaser, the uncollected accountsreceivable included in the Purchased Assets for apurchase price equal to the difference between theCollected Amount and the Book Value Amount. At the timeof such transfer and repurchase, the Purchaser willexecute all documents and do all acts which may bereasonably required by the Vendor so that suchuncollected accounts receivable are validly assigned tothe Vendor, and the Vendor will pay to the Purchaser theamount of the purchase price for such uncollectedaccounts receivable by certified cheque or bank draft.

ARTICLE 3

REPRESENTATIONS AND WARRANTIES

3.1 REPRESENTATIONS AND WARRANTIES BY THE VENDOR AND THESHAREHOLDER:

The Vendor and the Shareholder hereby jointly and severallyrepresent and warrant to the Purchaser as follows, and confirm thatthe Purchaser is relying upon the accuracy of each of suchrepresentations and warranties in connection with the purchase ofthe Purchased Assets and the completion of the other transactionshereunder:

)

(1 ) Corporate Authority and Binding Obligation:

The Vendor has good right, full corporate power andabsolute authority to enter into this Agreement and tosell, assign and transfer the Purchased Assets to thePurchaser in the manner contemplated herein and toperform all of the Purchaser's obligations under thisAgreement. The Shareholder has good right, full powerand authority to enter into this Agreement and to performall of the Shareholder's obligations under thisAgreement. The Vendor and its shareholders and board ofdirectors have taken all necessary or desirable actions,steps and corporate and other proceedings to approve orauthorize, validly and effectively, the entering into,and the execution, delivery and performance of, thisAgreement and the sale and transfer of the PurchasedAssets by the Vendor to the Purchaser. This Agreement isa legal, valid and binding obligation of the Vendor and

18

the Shareholder, enforceable against each of them inaccordance with its terms subject to:

(i) bankruptcy, insolvency, moratorium, reorganizationand other laws relating to or affecting theenforcement of creditors' rights generally; and

(ii) the fact that equitable remedies, including theremedies of specific performance and injunction,may only be granted in the discretion of a court.

(2) No Other Purchase Agreements:

No person has any agreement, option, understanding orcommitment, or any right or privilege (whether by law,preemptive or contractual) capable of becoming anagreement, option or comrnitment, for the purchase orother acquisition from the Vendor of any of the Assets,or any rights or interest therein, other than in theordinary course of the Business.

(3) Contractual and Regulatory Approvals:

Except as specified in Schedule "M" attached hereto, theVendor is not under any obligation, contractual orotherwise, to request or obtain the consent of anyperson, and no permits, licences, certifications,authorizations or approvals of, or notifications to, anyfederal, provincial, municipal or local government orgovernmental agency, board, commission or authority arerequired to be obtained by the Vendor:

(a) in connection with the execution, delivery orperformance by the Vendor of this Agreement or thecompletion of any of the transactions contemplatedherein;

(b) to avoid the loss of any permit, licence,certification or other authorization relating tothe Business; or

(c) in order that the authority of the Purchaser tocarryon the Business in the ordinary course and inthe same manner as presently conducted remains ingood standing and in full force and effect as ofand follOWing the closing of the transactionscontemplated hereunder.

19

Complete and correct copies of any agreements under whichthe Vendor is obligated to request or obtain any suchconsent have been provided to the Purchaser.

(4) Status and Governmental Licences:

(a) The Vendor is a corporation duly incorporated and validlysubsisting in all respects under the laws of itsjurisdiction of incorporation. The Vendor has allnecessary corporate power to own its properties and tocarryon its business as it is now being conducted.

(b) The Vendor holds all necessary licences, registrationsand qualifications in each jurisdiction in which:

(i) it owns or leases any of the Purchased Assets; or

(ii) the nature or conduct of the business or any partthereof, or the nature of the Purchased Assets orany part thereof, makes such qualificationnecessary or desirable to enable the Business to becarried on as now conducted or to enable thePurchased Assets to be owned, leased and operated.

All of the Vendor's licences, registrations andqualifications are listed in Schedule "N" attached heretoand are valid and subsisting. Complete and correctcopies of the licences, registrations and qualificationshave been delivered to the Purchaser. The Vendor is incompliance with all terms and conditions of the licences,registrations and qualifications. There are noproceedings in progress, pending or, to the best of theknowledge of the Vendor and the Shareholder, threatened,which could result in the revocation, cancellation orsuspension of any of the licences, registrations orqualifications.

( 5 ) CODlpliance with Constating Documents, Agreements andLaws:

The execution, delivery and performance of this Agreementand each of the other agreements contemplated or referredto herein by the Vendor, and the completion of thetransactions contemplated hereby, will not constitute orresult in a violation, breach or default, or cause theacceleration of any obligations which are included in theAssumed Liabilities, under:

20

( a ) any term or provision of any of the articles,by-laws or other constating documents of theVendor;

(b) subject to obtaining the contractual consentsreferred to in Schedule "M" hereof, the terms ofany indenture, agreement (written or oral) ,instrument or understanding or other obligation orrestriction to which the Vendor is a party or bywhich it is bound including, without limitation,any of the Assumed Contracts; or

(c) subject to obtaining the regulatory consentsreferred to in Schedule "M" hereof, any term orprovision of any of the Licences or any order ofany court, governmental authority or regulatorybody or any law or regulation of any jurisdictionin which the Business is carried on.

(6) Financial Statements:

(a) The [Audited] Financial Statements have been prepared inaccordance with generally accepted accounting principlesapplied on a basis consistent with that of the previousfiscal year of the Vendor, are true, correct and completein all material respects and present fairly theconsolidated financial condition of the Vendor as of[date], including the consolidated assets and liabilitiesof the Vendor as of [date], and the consolidatedrevenues, expenses and results of the operations of theVendor for the fiscal year ended on [date].

(b) The Interim Financial Statements have been prepared inaccordance with generally accepted accounting principlesapplied on a basis consistent with the Audited FinancialStatements, are true, correct and complete in allmaterial respects and present fairly [in all materialrespects] the consolidated financial condition of theVendor as of [date], including the consolidated assetsand liabilities of the Vendor as of [date], and theconsolidated revenues, expenses and results of theoperations of the Vendor for the [number] month periodended on [date].

(c) The financial condition of the Business is now at leastas good as the financial condition reflected in theInterim Financial Statements.

21

(7) Financial Records:

All material financial transactions of the Business havebeen recorded in the financial books and records of theVendor in accordance with good business practice, andsuch financial books and records:

(a) accurately reflect [in all material respects] thebasis for the financial condition and the revenues,expenses and results of operations of the Businessshown in the Audited Financial Statements and theInterim Financial Statements; and

(b) together with all disclosures made in thisAgreement or in the schedules hereto, presentfairly [in all material respects] the financialcondition and the revenues, expenses and results ofthe operations of the Business as of and to thedate hereof.

No information, records or systems pertainingoperation or administration of the Business arepossession of, recorded, stored, maintainedotherwise dependent upon any other person.

(8) Liabili~ies:

to thein theby or

There are no liabilities (contingent or otherwise) of theVendor of any kind whatsoever in respect of which thePurchaser may become liable on or after the consummationof the transactions contemplated by this Agreement,except the Assumed Liabilities.

(9) Absence of Certain Changes or Events:

Since the Audited Statements Date, the Vendor has not:

(a) incurred any obligation or liability (fixed orcontingent), except normal trade or businessobligations incurred in the ordinary course of theBusiness, none of which is materially adverse tothe Business;

(b) created any Encumbrance upon any of the PurchasedAssets, except as described in this Agreement or inthe schedules hereto;

( c) sold, assigned, transferred, leased or otherwisedisposed of any properties or assets relating to

22

the Business, except in the ordinary course of theBusiness;

(d) purchased, leased or otherwise acquired anyproperties or assets relating to the Business,except in the ordinary course of the Business;

(e) waived, cancelled or written-off any rights,claims, accounts receivable or any amounts payableto the Vendor relating to the Business, except inthe ordinary course of the Business;

(f) entered into any transaction, contract, agreementor commitment relating to the Business, except inthe ordinary course of the Business;

(g) terminated, discontinued, closed or disposed of anyplant, facility or operation relating to theBusiness;

(h) had any supplier of the Business terminate, orcommunicate to the Vendor the intention or threatto terminate, its relationship with the Business,or the intention to substantially reduce thequantity of products or services it sells to theBusiness, except in the case of suppliers whosesales to the Business are not, in the aggregate,material to the Condition of the Business;

(i) had any customer of the Business terminate, orcommunicate to the Vendor the intention or threatto terminate, its relationship with the Business,or the intention to substantially reduce thequantity of products or services it purchases fromthe Business, or its dissatisfaction with theproducts or services sold by the Business, exceptin the case of customers whose purchases from theBusiness are not, in the aggregate, material to theCondition of the Business;

(j) made any material change in the method of billingcustomers or the credit terms made available by theBusiness to customers;

(k) made any material change with respect to any methodof management, operation or accounting in respectof the Business;

(1) suffered any damage, destruction or loss (whetheror not covered by insurance) relating to theBusiness which has materially adversely affected or

23

could materially adversely affect the Condition ofthe Business;

(m) increased any form of compensation or otherbenefits payable or to become payable to any of theemployees of the Business, except increases made inthe ordinary course of the Business which do notexceed [number]%, in the aggregate, of the amountof the aggregate salary compensation payable to allof the employees of the Business prior to suchincrease;

( n) suffered any extraordinary loss relating to theBusiness;

(0) made or incurred any material change in, or becomeaware of any event or condition which is likely toresult in a material change in, the Condition ofthe Business or its relationships with itscustomers, suppliers or employees; or

(p) authorized, agreed or otherwise become committed todo any of the foregoing.

(10) Tax Matters:

(a) For purposes of this Agreement, the term "GovernmentalCharges" means and includes all taxes, customs duties,rates, levies, assessments, reassessments and othercharges, together with all penalties, interest and fineswith respect thereto, payable to any federal, provincial,municipal, local or other government or governmentalagency, authority, board, bureau or commission, domesticor foreign.

(b) The Vendor has paid all Governmental Charges which aredue and payable by it on or before the date hereof. Thereare no actions, suits, proceedings, investigations,enquiries or claims now pending or made or, to the bestof the knowledge of the Vendor and the Shareholder,threatened against the Vendor in respect of GovernmentalCharges. The Vendor has withheld from each amount paidor credited to any person the amount of GovernmentalCharges required to be withheld therefrom and hasremitted such Governmental Charges to the proper tax orother receiving authorities within the time requiredunder applicable legislation.

24

(11) Litigation:

Except for the matters referred to in Schedule "0" attachedhereto, there are no actions, suits or proceedings, judicialor administrative (whether or not purportedly on behalf of theVendor) pending or, to the best of the knowledge of the Vendorand the Shareholder, threatened, by or against or affectingthe Vendor which relate to the Business, at law or in equity,or before or by any court or any federal, provincial,municipal or other governmental department, commission, board,bureau, agency or instrumentality, domestic or foreign.Except for the matters referred to in Schedule "0" there areno grounds on which any such action, suit or proceeding mightbe commenced with any reasonable likelihood of success.

(12) Environmental Hatters:

(a) For the purposes of this Agreement, the following termsand expressions shall have the following meanings:

( i) "Environmental Laws" means all applicable statutes,regulations, ordinances, by-laws, and codes and allinternational treaties and agreements, now orhereafter in existence in Canada (whether federal,provincial or municipal) and in the United States(whether federal, state or local) relating to theprotection and preservation of the environment,occupational health and safety, product safety,product liability or Hazardous Substances,including, without limitation, The EnvironmentalManagement and Protection Act of Saskatchewan, asamended from time to time ( the "EMPA"), and theCanadian Environmental. Protection Act, R. S. C. 1985,c. 16 (4th Supp.), as amended from time to time(the "CEPA").

( ii) "Environmental Permits" includes all orders,permits, certificates, approvals, consents,registrations and licences issued by any authorityof competent jurisdiction under Environmental Laws.

(iii)"Hazardous Substance" means, collectively, anyhazardous substance (as defined in the EMPA), toxicsubstance (as defined in the CEPA), dangerous goods(as defined in the Transportation of DangerousGoods Act, R.S.C. 1985, c. T-17 (Canada), asamended from time to time) or pollutant or anyother substance which when released to the naturalenvironment is likely to cause, at some immediateor future time, material harm or degradation to the

25

natural environment or material risk to humanhealth.

(iv) "Release" means any release, spill, leak, emission,discharge, leach, dumping, escape or other disposalwhich is or has been made in contravention of anyEnvironmental Laws.

(b) Except as disclosed in Schedule "P" attached hereto, theVendor, the operation of the Business, the property andassets owned or used by the Vendor, including thePurchased Assets, and the use, maintenance and operationthereof have been and are in compliance with allEnvironmental Laws. The Vendor has complied with allreporting and monitoring requirements under allEnvironmental Laws. The Vendor has not received anynotice of any non-compliance with any Environmental Laws,and the Vendor has never been convicted of an offence fornon-compliance with any Environmental Laws or been finedor otherwise sentenced or settled such prosecution shortof conviction.

(c) The Vendor has obtained all Environmental Permitsnecessary to conduct the Business and to own, use andoperate the properties and assets of the Vendor. Allsuch Environmental Permits are listed in Schedule "P",and complete and correct copies thereof have beenprovided to the Purchaser. Except as noted in Schedule"P", all Environmental Permits listed therein may bevalidly transferred, and will be transferred, to thePurchaser at or following Closing. No such permits shallbecome void or voidable as a result of the consummationof the transactions contemplated hereby; and no consentto such transactions is required to maintain saidEnvironmental Permits in full force and effect. TheVendor agrees to assist the Purchaser with filing allnecessary applications and transferring or obtaining allnecessary Environmental Permits.

(d) Except as disclosed in Schedule "P", there are noHazardous Substances located on or in any of thePurchased Assets, and no Release of any HazardousSubstances has occurred on or from the Purchased Assetsor has resulted from the operation of the Business.Except as disclosed in Schedule IIp'', the Vendor has notused any of its Purchased Assets to produce, generate,store, handle, transport or dispose of any HazardousSUbstances and none of the Real Properties has been or isbeing used as a landfill or waste disposal site.

(e) Without limiting the generality of the foregoing, exceptas disclosed in Schedule "P", there are no underground or

26

surface storage tanks or urea formaldehyde foaminsulation, asbestos, polychlorinated biphenyls (PCBs) orradioactive substances located on or in any of thePurchased Assets. The Vendor is not, and there is nobasis upon which the Purchaser could become, responsiblefor any clean-up or corrective action under anyEnvironmental Laws. The Vendor has never conducted orcaused to be conducted an environmental audit, assessmentor study of any of the Purchased Assets.

( f ) Except as disclosed in Schedule "P", there are no pendingor proposed changes to Environmental Laws which wouldrender illegal or restrict the manufacture or sale of anyproducts manufactured or sold or services provided by theVendor with respect to the Purchased Assets.

(13) Ti~le ~o Asse~s:

The Vendor is the owner of and has good and marketable titleto all of the Purchased Assets, including, without limitation,all Purchased Assets reflected in the (Audited] FinancialStatements and all Purchased Assets acquired by the Vendorafter the (Audited]

(a) the properties and assets disposed of, utilized orconsumed since the (Audited] Statements Date in theordinary course of the Business; and

(b) the Encumbrances described in Schedule "0" attachedhereto, all of which will be discharged prior to theconveyance of the Purchased Assets to the Purchaser atthe Closing Time.

No other person owns any assets which are being used in theBusiness, except for the Leased Premises and personal propertyleased by the Vendor

(14) Accoun~s Receivable:

The accounts receivable included in the Purchased Assets arosefrom bona fide transactions in the ordinary course of theBusiness and are valid, enforceable and fully collectibleaccounts (subject to a reasonable allowance, consistent withpast practice, for doubtful accounts as previously disclosedin writing to the Purchaser). Such accounts receivable arenot subject to any set-off or counterclaim.

I!

27

(15) Inventory:

The inventory included in the Purchased Assets, subject to areasonable allowance for obsolete inventory (consistent withthe allowances reflected in the Audited Financial Statementsand the Interim Financial Statements), is good and usable andis capable of being processed and sold in the ordinary courseof the Business at normal profit margins.

(16) Real Properties:

(a) Schedule "F" attached hereto lists all real propertiesincluded in the Purchased Assets and sets forth the legaldescription thereof. There are no agreements, options,contracts or commitments to sell, transfer or otherwisedispose of the Real Properties or which would restrictthe ability of the Vendor to transfer the RealProperties. There are no leases, tenancies, licences orother rights of occupancy or use for any portion of theReal Properties, and no person other than the Vendoroccupies or uses any portion of the Real Properties.

(b) The Vendor is the absolute beneficial owner of, and hasgood and marketable title in fee simple to, the RealProperties, free and clear of any and all Encumbrances,except for:

( i ) the Encumbrances described in Schedule "F" attachedhereto;

(ii) liens for current taxes not yet due; and

(iii)rights of parties in possession, zoningrestrictions, easements, encroachments,rights-of-way, reservations and restrictions thatrun with the land and minor title defects (if any)which do not, in the aggregate, materiallyadversely affect the validity of title to or thevalue or marketability of the Real Properties ormaterially adversely affect the use of the RealProperties as they are presently used by the Vendorin connection with the Business.

Complete and correct copies of all documents creating theEncumbrances described in Schedule "F" attached hereto havebeen provided to the Purchaser.

(c) The Real Properties described in Schedule "F" and allbuildings and structures located thereon and the conductof the Business as presently conducted do not violate,and the use thereof in the manner in which presently used

28

is not adversely affected by, any zoning or buildinglaws, ordinances, regulations, covenants or officialplans. The Vendor has not received any notificationalleging any such violation. Such buildings andstructures do not encroach upon any lands not owned bythe Vendor. There are no expropriation, condemnation orsimilar proceedings pending or, to the best of theknowledge of the Vendor and the Shareholder, threatened,with respect to any of the Real Properties or any partthereof.

(17) Leased Premises:

Schedule "0" attached hereto describes all leases oragreements to lease under which the Vendor leases any realproperty relating to the Business. Complete and correctcopies of the Leases have been provided to the Purchaser. TheVendor is entitled to all rights and benefits as lessee underthe Leases and the Vendor has not sublet, assigned, licensedor otherwise conveyed any rights in the Leased Premises or theLeases to any other person. The names of the other parties tothe Leases, the description of the Leased Premises, the term,rent and other amounts payable under the Leases and allrenewal options available under the Leases are accuratelydescribed in Schedule "0". All rental and other payments andother obligations required to be paid and performed by theVendor pursuant to the Leases have been duly paid andperformed; the Vendor is not in default of any of itsobligations under the Leases; and, to the best of theknowledge of the Vendor and the Shareholder, none of thelandlords or other parties to the Leases are in default of anyof their obligations under the Leases. The Vendor is entitledto assign all of its rights and interest under the Leases andin and to the Leased Premises to the Purchaser [subject toobtaining the consents referred to in Schedule "M" attachedhereto]. [Subject to obtaining such consents,] the terms andconditions of the Leases will not be affected by, nor will anyof the Leases be in default as a result of, the completion ofthe transactions contemplated hereunder. The use by theVendor of the Leased Premises is not in breach of anybUilding, zoning or other statute, by-law, ordinance,regulation, covenant, restriction or official plan. TheVendor has adequate rights of ingress to and egress from theLeased Premises for the operation of the Business l.n theordinary course.

(18) Work Orders and Deficiencies:

There are no outstanding work orders, non-compliance orders,deficiency notices or other such notices relative to the Real

29

Properties, the Leased Premises, the other Purchased Assets orthe Business which have been issued by any regulatoryauthority, police or fire department, sanitation, environment,labour, health or other governmental authorities or agencies.There are no matters under discussion with any such

department or authority relating to work orders,non-compliance orders, deficiency notices or other suchnotices. The Business is not being carried on, and none ofthe Real Properties, the Leased Premises or the otherPurchased Assets are being operated, in a manner which is incontravention of any statute, regulation, rule, code, standardor policy. 'No amounts are owing by the Vendor in respect ofthe Real Properties or the Leased Premises to any governmentalauthority or pUblic utility, other than current accounts whichare not in arrears.

(19) Condition of Properties and Equipment:

Each building and structure comprising the Real Propertiesand, to the best of the knowledge of the Vendor and theShareholder, those comprising the Leased Premises, are free ofany structural defect. The heating, ventilating, plumbing,drainage, electrical and air conditioning systems and allother systems used in the Real Properties and the LeasedPremises and all machinery, equipment, tools, furniture,furnishings and materials used in the Business are in goodworking order, fully operational and free of any defect,except for normal wear and tear.

(20) Leases of Personal Property:

Schedule "H" attached hereto describes all leases of equipmentand vehicles used in or relating to the Business. Completeand correct copies of those leases have been provided to thePurchaser. The Vendor is entitled to all rights and benefitsas lessee under those leases, and the Vendor has not sublet,assigned, licensed or otherwise conveyed any rights in thoselicences or in the property leased thereunder to any otherperson. All payments and other obligations required to bepaid and performed by the Vendor under those leases have beenduly paid and performed. The Vendor is not in default of anyits obligations under those leases; and, to the best of theknowledge of the Vendor and the Shareholder, none of thelessors or any other parties to those leases are in default ofany of their obligations under those leases. The Vendor isentitled to assign all of its right and interest under thoseleases and in and to the property leased thereunder to thePurchaser [subject to obtaining the consents referred to inSchedule "M" attached hereto.] [Subject to obtaining suchconsents,) the terms and conditions of those leases will not

30

be affected by, nor will any of those leases be in default asa result of, the completion of the transaction contemplatedhereunder.

(21) Intellectual Property:

(a) Schedule "J" attached hereto lists and contains adescription of:

(i) all patents, patent applications and registrations,trade marks, trade mark applications andregistrations, copyrights, copyright applicationsand registrations, trade names and industrialdesigns, domestic or foreign, owned or used by theVendor relating to the operation of the Business;

(ii) all trade secrets, know-how, inventions and otherintellectual property owned or used by the Vendorrelating to the Business; and

(iii)all computer systems and application software,including without limitation all documentationrelating thereto and the latest revisions of allrelated object and source codes therefor, owned orused by the Vendor relating to the Business,

(all of the foregoing being hereinafter collectively calledthe "Intellectual Property").

(b) The Vendor has good and valid title to all of theIntellectual Property, free and clear of any and allEncumbrances, except in the case of any IntellectualProperty licensed to the Vendor as disclosed in Schedule"J". Complete and correct copies of all agreementswhereby any rights in any of the Intellectual Propertyhave been granted or licensed to the Vendor have beenprovided to the Purchaser. No royalty or other fee isrequired to be paid by the Vendor to any other person inrespect of the use of any of the Intellectual Propertyexcept as provided in such agreements delivered to thePurchaser. The Vendor has protected its rights in theIntellectual Property in the manner and to the extentdescribed in Schedule "J". Except as indicated inSchedule "J", the Vendor has the exclusive right to useall of the Intellectual Property and has not granted anylicence or other rights to any other person in respect ofthe Intellectual Property. Complete and correct copiesof all agreements whereby any rights in any of theIntellectual Property have been granted or licensed bythe Vendor to any other person have been provided to thePurchaser. The Vendor is entitled to assign all of its

)

31

rights and interest in and to the Intellectual Propertyto the Purchaser (subject to obtaining the consentsreferred to in Schedule "Mil attached hereto].

(c) [Subject to obtaining the aforesaid consents,] and exceptas disclosed in Schedule "J" there are no restrictions onthe ability of the Vendor or any successor to or assigneefrom the Vendor to use and exploit all rights in theIntellectual Property. All statements contained in allapplications for registration of the IntellectualProperty were true and correct as of the date of suchapplications. Each of the trade marks and trade namesincluded in the Intellectual Property is in use.

(d) The conduct of the Business and the use of theIntellectual Property does not infringe, and the Vendorhas not received any notice, complaint, threat or claimalleging infringement of, any patent, trade mark, tradename, copyright, industrial design, trade secret or otherIntellectual Property or propriety right of any otherperson, and the conduct of the Business does not includeany activity which may constitute passing off.

(e) The computer systems, including hardware and software arefree from viruses and the Vendor has taken, and willcontinue to take, all steps and implement all proceduresnecessary to ensure, so far as reasonably possible, thatsuch systems are free from viruses and will remain sountil the Closing Time.

(22) Affiliates:

No part of the Business and none of the Purchased Assets areowned or operated by any Affiliate of the Vendor.

(23) Partnerships or Joint Ventures:

The Vendor is not, in relation to any part of the Business, apartner or participant in any partnership, j oint venture,profit-sharing arrangement or other association of any kindand is not party to any agreement under which the Vendoragrees to carryon any part of the Business in such manner orby which the Vendor agrees to share any revenue or profit ofthe Business with any other person.

(24) Customers:

The Vendor has previously delivered to the Purchaser a trueand complete list of all customers of the Business as of the

32

date hereof. The Vendor is the sole and exclusive owner of,and has the unrestricted right to use, such customer list.Neither the customer list nor any information relating to thecustomers of the Business has, within three years prior to thedate of this Agreement, been made available to any personother than the Purchaser. Neither the Vendor nor theShareholder has any knowledge of any facts which couldreasonably be expected to result in the loss of any customersor sources of revenue of the Business which, in the aggregate,would be material to the Condition of the Business.

(25) Restrictions on Doing Business:

The Vendor is not a party to or bound by any agreement inrelation to the Business which would restrict or limit itsright to carryon any activity or to solicit business from anyperson or in any geographical area or otherwise to conduct theBusiness as the Vendor may determine. The Vendor is notsubject to any judgment, order or requirement of any court orgovernmental authority in relation to the Business which isnot of general application to persons carrying on a businesssimilar to the Business. To the best of the knowledge of theVendor and the Shareholder, there are no facts orcircumstances in relation to the Business which couldmaterially adversely affect the ability of the Purchaser tocontinue to operate the Business as presently conductedfollowing the completion of the transactions contemplated bythis Agreement.

(26) Warranties and Discounts:

Except as described in Schedule "R" attached hereto:

(a) the Vendor has not given any guarantee or warranty inrespect of any of the products sold or the servicesprovided as part of the Business, except warranties madein the ordinary course of the Business and in the form ofthe standard written warranty, a copy of which has beenprovided to the Purchaser, and except for warrantiesimplied by law;

(b) during each of the three fiscal years of the Vendor endedimmediately preceding the date hereof, no claims havebeen made against the Vendor for breach of warranty orcontract requirement or negligence or for a priceadjustment or other concession in respect of any defectin or failure to perform or deliver any products,services or work in connection with the Business whichhad, in any such year, an aggregate cost exceeding $-;

)

33

(c) there are no repair contracts or maintenance obligationsin favour of the customers or users of products of theBusiness except obligations incurred in the ordinarycourse of the Business and in accordance with thestandard terms, a copy of which has been provided to thePurchaser;

(d) the Vendor is not now subject to any agreement orcommitment, and the Vendor has not, within three yearsprior to the date hereof, entered into any agreement withor made any commitment to any customer of the Businesswhich would require the repurchase of any products soldto such customers or adj ustment of any price or thegranting of any refund, discount or other concession tosuch customer; and

(e) the Vendor is not required to provide any letters ofcredit, bonds or other financial security arrangements inconnection with any transactions with any suppliers orcustomers of the Business.

(27) Licences, Agency and Distributorship Agreements:

Schedule "E" attached hereto lists all agreements to which theVendor is a party or by which it is bound under which theright to manufacture, use or market any product, service,technology, information, data, computer hardware or softwareor other property used in or produced or sold by the Businesshas been granted, licensed or otherwise provided to the Vendoror by the Vendor to any other person, or under which theVendor has been appointed or any person has been appointed bythe Vendor as an agent, distributor, licensee or franchiseefor any of the foregoing. Complete and correct copies of allof the agreements relating to the Licence Rights have beenprovided to the Purchaser. The Vendor is entitled to assignall of its interest in the Licence Rights to the Purchaser[subject to obtaining the consents referred to in Schedule "M"attached hereto]. None of the agreements relating to theLicence Rights grant to any person any authority to incur anyliability or obligation or to enter into any agreement onbehalf of the Vendor.

(28) Outstanding Agreements:

The Vendor is not a party to or bound by any outstanding orexecutory agreement, contract or commitment, whether writtenor oral, relating to the Business, except for:

( a ) any contract, lease or agreement described or referred toin this Agreement or in the schedules hereto;

34

(b) any contract, lease or agreement made in the ordinarycourse of the routine daily affairs of the Business underwhich the Vendor has a financial obligation of less than$- per annum and which can be terminated by the Vendorwithout payment of any damages, penalty or other amountby giving not more than [number] days' notice; and

(c) the contracts, leases and agreements described inSchedule "5" attached hereto.

Complete and correct copies of each of the contracts, leasesand agreements described in Schedule "s" have been provided tothe Purchaser.

(29) Good Standing of Agreements:

The Vendor is not in default or breach of any of itsobligations under anyone or more contracts, agreements(written or oral) , commitments, indentures or otherinstruments to which it is a party or by which it is boundrelating to the Business, and there exists no state of factswhich, after notice or lapse of time or both, would constitutesuch a default or breach. All such contracts, agreements,commitments, indentures and other instruments are now in goodstanding and in full force and effect without amendmentthereto, the Vendor is entitled to all benefits thereunderand, to the best of the knowledge of the Vendor and theShareholder, the other parties to such contracts, agreements,cottunitments, indentures and other instruments are not indefaul t or breach of any of their obligations thereunder.There are no contracts, agreements, commitments, indentures orother instruments relating to the Business under which theVendor's rights or the performance of its obligations aredependent upon or supported by the guarantee of or anysecurity provided by any other person.

(30) Employees:

Schedule "T" attached hereto sets forth the name, job title,duration of employment, vacation entitlement, employee benefitentitlement and rate of remuneration (including bonus andcommission entitlement) of each employee of the Business.Schedule "T" also sets forth the names of all employees of theBusiness who are now on disability, maternity or otherauthorized leave or who are receiving workers' compensation orshort-term or long-term disability benefits.

)

35

(31) Employment Agreements:

The Vendor is not a party to any written or oral employment,service or consulting agreement relating to anyone or morepersons working in the Business, except for oral employmentagreements which are of indefinite term and without anyspecial arrangements or commitments with respect to thecontinuation of employment or payment of any particular amountupon termination of employment. There are no employees of theBusiness who cannot be dismissed upon such period of notice asis required by law in respect of a contract of hire for anindefinite term.

(32) Labour Matters and EmplOyment Standards:

(a) The Vendor is not subject to any agreement with anylabour union or employee association and has not made anycommitment to or conducted negotiations with any labourunion or employee association with respect to any futureagreement and, to the best of the knowledge of the Vendorand the Shareholder, there is no current attempt toorganize, certify or establish any labour union oremployee association, in relation to any of the employeesof the Business.

(b) There are no existing or, to the best of the knowledge ofthe Vendor and the Shareholder, threatened, labourstrikes or labour disputes, grievances, controversies orother labour troubles affecting the Business.

(c) The Vendor has complied with all applicable laws, rules,regulations and orders relating to employment in theBusiness, including those relating to wages, hours,collective bargaining, occupational health and safety,workers' hazardous materials, employment standards, payequity and workers' compensation. There are nooutstanding charges or complaints against the Vendorrelating to unfair labour practices or discrimination orunder any legislation relating to employees. The Vendorhas paid in full all amounts owing under The Workers'Compepsation Act or [comparable provincial legislation],and the workers' compensation claims experience of theVendor would not permit a penalty reassessment under suchlegislation.

(33) Employee Benefit and Pension Plans:

(a) Except as listed in Schedule "U" attached hereto, theVendor does not have, and is not subject to any presentor future obligation or liability under, any pension

36

plan, deferred compensation plan, retirement income plan,stock option or stock purchase plan, profit sharing plan,bonus plan or policy, employee group insurance plan,hospitalization plan, disability plan or other employeebenefit plan, program, policy or practice, formal orinformal, with respect to any of the employees of theBusiness, other than the Canada Pension Plan, R.S.C.1985, c. C-8 and other similar health plans establishedpursuant to statute. Schedule "U" also lists the generalpolicies, procedures and work-related rules in effectwith respect to employees of the Business, whetherwritten or oral, including but not limited to policiesregarding holidays, sick leave, vacation, disability anddeath benefits, termination and severance pay, automobileallowances and rights to company-provided automobiles andexpense reimbursements. (The plans, programs, policies,practices and procedures listed in Schedule "U" arehereinafter collectively called the "Benefit Plans").Complete and correct copies of all documentationestablishing or relating to the Benefit Plans listed inSchedule "U" or, where such Benefit Plans are oralcommitments, written summaries of the terms thereof, andthe most recent financial statements and actuarialreports related thereto and all reports and returns inrespect thereof filed with any regulatory agency withinthree years prior to the date hereof have been providedto the Purchaser.

(b) The pension plans included in the Benefit Plans areregistered under and are in compliance with allapplicable federal and provincial legislation and allreports, returns and filings required to be madethereunder have been made. Such pension plans have beenadministered in accordance with their terms and theprovisions of applicable law. Each pension plan has beenfunded in accordance with the requirements of such plansand based on actuarial assumptions which are appropriateto the employees of the Business. Based on suchassumptions, there is no unfunded liability under anysuch pension plan. No changes have occurred since thedate of the most recent actuarial report provided to thePurchaser in respect of such pension plans which makessuch report misleading in any material respect and, sincethe date of such report, the Vendor has not made orgranted or committed to make or grant any benefitimprovements to which members of the pension plans are ormay become entitled which are not reflected in suchactuarial report. No funds have been withdrawn by theVendor from any such pension plan or other Benefit Plans.

(c) There are no pending claims by any employee covered underthe Benefit Plans or by any other person which allege a

37

breach of fiduciary duties or violation of governing lawor which may result in liability to the employer and, tothe best of the knowledge of the Business and theShareholder, there is no basis for such a claim. Thereare no employees or former employees of the Business whoare receiving from the Vendor any pension or retirementpayments or who are entitled to receive any such paymentsnot covered by a pension plan to which the Vendor is aparty.

(34) Insurance:

Schedule "V" attached hereto contains a true and complete listof all insurance policies maintained by the Vendor or underwhich the Vendor is covered in respect of the properties,assets, operations and personnel of the Business as of thedate hereof. Complete and correct copies of all such insurancepolicies have been provided to the Purchaser. Such insurancepolicies are in full force and effect and the Vendor is not indefault with respect to the payment of any premium orcompliance with any of the provisions contained in any suchinsurance policy. To the best of the knowledge of the Vendorand the Shareholder, there are no circumstances under whichthe Vendor would be required to or, in order to maintain itscoverage, should give any notice to the insurers under anysuch insurance policies which has not been given. The Vendorhas not received notice from any of the insurers regardingcancellation of such insurance policies. The Vendor has notfailed to give any notice of or to present any claim under anysuch insurance policy in due and timely fashion. The Vendorhas not received notice from any of the insurers denying anyclaims.

(35) Non-Arm's Length Matters:

With respect to the Business, the Vendor is not a party to orbound by any agreement with, is not indebted to, and no amountis owing to the Vendor by, any of the Affiliates of the Vendoror any officers, former officers, directors, former directors,shareholders, former shareholders, employees (except for oralemployment agreements with employees) or former employees ofthe Vendor or to any person not dealing at arm's length withany of the foregoing.

(36) Government Assistance:

Schedule "w" attached hereto describes all agreements, loans,other funding arrangements and assistance programs(collectively called "Government Assistance Programs") which

38

have been provided to the Business from any federal,provincial, municipal or other government or governmentalagency, board, commission or authority, domestic or foreign(collectively called "Government Agencies"). Complete andcorrect copies of all documents relating to the GovernmentAssistance Programs have been delivered to the Purchaser. TheVendor has performed all of its obligations under theGovernment Assistance Programs, and no basis exists for anyGovernment Agencies to seek payment or repayment of any amountor benefit provided under any of the Government AssistancePrograms.

(37) Compliance with Laws:

In relation to the Business, the Vendor is not in violation ofany federal, provincial or other law, regulation or order ofany government or governmental or regulatory authority,domestic or foreign, including, without limitation, any law,regulation or order relating to [specific area of regulationapplicable to the Business].

(38) Complete Conveyance:

Except for the Excluded Assets, the assets included in thePurchased Assets constitute all of the assets of the Vendorused in carrying on the Business and constitute all of theassets set forth on or reflected in the Audited FinancialStatements, other than assets acquired since the AuditedStatements Date or disposed of, utilized or consumed since theAudited Statements Date in the ordinary course of theBusiness. The Purchased Assets include all rights,properties, interests, assets (both tangible and intangible)and agreements necessary to enable the Purchaser to carry onthe Business in the same manner and to the same extent as ithas been carried on by the Vendor prior to the date hereof.

(39) Vendor's Residency:

The Vendor is not a non-resident of Canada within the meaningof the Income Tax Act, S.C. 1970-71-72, c. 63 (Canada).

(40) Copies of Documents:

Complete and correct copies (including all amendments) of allcontracts, leases and other documents referred to in thisAgreement or any schedule hereto or required to be disclosedhereby have been delivered to the Purchaser.

)39

(41) Disclosure:

No representation or warranty contained in this section 3.1,and no statement contained in any schedule, certificate, list,summary or other disclosure document provided or to beprovided to the Purchaser pursuant hereto, or in connectionwith the transactions contemplated hereby, contains or willcontain any untrue statement of a material fact, or omits orwill omit to state any material fact which is necessary inorder to make the statements contained therein not misleading.

3.2 REPRESENTATIONS AND WARRANTIES BY THE PURCHASER:

The Purchaser hereby represents and warrants to the Vendor and theShareholder as follows, and confirms that the Vendor and theShareholder are relying upon the accuracy of each of suchrepresentations and warranties in connection with the sale of thePurchased Assets and the completion of the other transactionshereunder:

(1) Corporate Authority and Binding Obligation:

The Purchaser is a corporation duly incorporated and validlysubsisting in all respects under the laws of its jurisdictionof incorporation. The Purchaser has good right, fullcorporate power and absolute authority to enter into thisAgreement and to purchase the Purchased Assets from the Vendorin the manner contemplated herein and to perform all of thePurchaser's obligations under this Agreement. The Purchaserand its shareholders and board of directors have taken allnecessary or desirable actions, steps and corporate and otherproceedings to approve or authorize, validly and effectively,the entering into of, and the execution, delivery andperformance of, this Agreement and the purchase of thePurchased Assets by the Purchaser from the Vendor. ThisAgreement is a legal, valid and binding obligation of thePurchaser, enforceable against it in accordance with its termssubject to bankruptcy, insolvency, moratorium, reorganizationand other laws relating to or affecting the enforcement ofcreditors' rights generally and the fact that equitableremedies, including the remedies of specific performance andinjunction, may only be granted in the discretion of a court.

(2) Contractual and Regulatory Approvals:

Except as specified in Schedule "X" attached hereto, thePurchaser is not under any obligation, contractual orotherwise to request or obtain the consent of any person, and

40

no permits, licences, certifications, authorizations orapprovals of, or notifications to, any federal, provincial,municipal or local government or governmental agency, board,commission or authority are required to be obtained by thePurchaser in connection with the execution, delivery orperformance by the Purchaser of this Agreement or thecompletion of any of the transactions contemplated herein.Complete and correct copies of any agreements under which thePurchaser is obligated to request or obtain any such consenthave been provided to the Vendor.

( 3 ) Compliance with Constating Documents, Agreements andLaws:

The execution, delivery and performance of this Agreement andeach of the other agreements contemplated or referred toherein by the Purchaser, and the completion of thetransactions contemplated hereby, will not constitute orresult in a violation or breach of or default under:

(a) any term or provision of any of the articles, by-laws orother constating documents of the Purchaser;

(b) subj ect to obtaining the contractual consents referred toin Schedule "X" hereof, the terms of any indenture,agreement (written or oral), instrument or understandingor other obligation or restriction to which the Purchaseris a party or by which it is bound; or

(c) subject to obtaining the regulatory consents referred toin Schedule "X" hereof, any term or provision of anylicences, registrations or qualification of the Purchaseror any order of any court, governmental authority orregulatory body or any applicable law or regulation ofany jurisdiction.

( 4 ) Investment Canada Act:

The Purchaser is not a "non-Canadian" for purposes of andwithin the meaning of the Investment Canada Act, R.S.C. 1985,c. 28 (1st Supp.).

41

ARTICLE 4

SURVIVAL AND LIMITATIONS OFREPRESENTATIONS AND WARRANTIES

4.1 SURVIVAL OF WARRANTIES BY THE VENDOR AND SHAREHOLDER:

The representations and warranties made by the Vendor and theShareholder and contained in this Agreement, or contained in anydocument or c~rtificate given in order to carry out thetransactions contemplated hereby, will survive the closing of thepurchase of the Purchased Assets provided for herein and,notwithstanding such closing or any investigation made by or onbehalf of the Purchaser or any other person or any knowledge of thePurchaser or any other person, shall continue in full force andeffect for the benefit of the Purchaser, subject to the followingprovisions of this section.

(a) Except as provided in paragraph (b) of this section, noWarranty Claim may be made or brought by the Purchaserafter the date which is [number] years following theClosing Date.

(b) Any Warranty Claim which is based upon or relates to thetitIe to the Purchased Assets or which is based uponintentional misrepresentation or fraud by the Vendor orthe Shareholder may be made or brought by the Purchaserat any time.

After the expiration of the period of time referred to in paragraph(a) of this section, the Vendor and the Shareholder will bereleased from all obligations and liabilities in respect of therepresentations and warranties made by the Vendor and theShareholder and contained in this Agreement or in any document orcertificate given in order to carry out the transactionscontemplated hereby except with respect to any claims made by thePurchaser in writing prior to the expiration of such period andsubject to the rights of the Purchaser to make any claim permittedby paragraph (b) of this section.

4.2 SURVIVAL OF WARRANTIES BY PURCHASER:

The representations and warranties made by the Purchaser andcontained in this Agreement or contained in any document orcertificate given in order to carry out the transactionscontemplated hereby will survive the closing of the purchase andsale of the Purchased Assets provided for herein and,notwithstanding such closing or any investigation made by or onbehalf of the Vendor or the Shareholder or any other person or anyknowledge of the Vendor or the Shareholder or any other person,

42

shall continue in full force and effect for the benefit of theVendor and the Shareholder [provided that no Warranty Claim may bemade or brought by the Vendor after the date which is [number]years following the Closing Date].

4.3 LIMITATIONS ON WARRANTY CLAIMS:

(a) The Purchaser shall not be entitled to make a WarrantyClaim if the Purchaser has been advised in writing orotherwise has actual knowledge prior to the Closing Timeof the inaccuracy, non-performance, non-fulfilment orbreach which is the basis for such Warranty Claim and thePurchaser completes the transactions hereundernotwithstanding such inaccuracy, non-performance,non-fulfilment or breach.

(b) The amount of any damages which may be claimed by thePurchaser pursuant to a Warranty Claim shall becalculated to be the cost or loss to the Purchaser aftergiving effect to:

(i) any insurance proceeds available to the Purchaserin relation to the matter which is the subject ofthe Warranty Claim; and

(ii) the value of any related, determinable tax benefitsrealized, or to be realized within a [number] yearperiod following the date of incurring such cost orloss, by the Purchaser in relation to the matterwhich is the subject of the Warranty Claim.

(c) The Purchaser shall not be entitled to make any WarrantyClaim until the aggregate amount of all damages, losses,liabilities and expenses incurred by the Purchaser as aresult of all misrepresentations and breaches ofwarranties contained in this Agreement or contained inany document or certificate given in order to carry outthe transactions contemplated hereby, after taking intoaccount paragraph (b) of this section, is equal to $ •.After the aggregate amount of such damages, losses,liabilities and expenses incurred by the Purchaserexceeds $., the Purchaser shall only be entitled to makeWarranty Claims to the extent that such aggregate amount,after taking into account the provisions of paragraph (b)of this section, exceeds $ •.

(d) Notwithstanding any other provisions of this Agreement orof any agreement, certificate or other document made inorder to carry out the transactions contemplated hereby,the maximum aggregate liability of the Vendor and the

i)

/

43

Shareholder together in respect of all Warranty Claims bythe Purchaser will be limited to $-.

ARTICLE 5

COVENANTS

5.1 COVENANTS BY THE VENDOR AND THE SHAREHOLDER:

The Vendor and the Shareholder jointly and severally covenant tothe Purchaser that they will do or cause to be done the following:

(1) Investigation of Business and Examination of Documents:

During the Interim Period, the Vendor and the Shareholder willprovide access to and will permit the Purchaser, through itsrepresentatives, to make such investigation of the operations,properties, assets and records of the Business and of itsfinancial and legal condition as the Purchaser deems necessaryor advisable to familiarize itself with such operations,properties, assets, records and other matters. Withoutlimiting the generality of the foregoing, during the InterimPeriod the Vendor and the Shareholder will permit thePurchaser and its representatives to have access to thepremises used in connection with the Business (at suchreasonable times as may be designated by the Vendor so as notto disrupt the routine daily affairs of the Business], andwill produce for inspection and provide copies to thePurchaser of:

( a ) all agreements and other documents referred to in section3.1 hereof or in any of the schedules attached hereto andall other contracts, leases, licences, title documents,title opinions, insurance policies, pension plans,information relating to employees of the Business,customer lists, information relating to customers andsuppliers. of the Business, documents relating to allAssumed Liabilities, documents relating to legal oradministrative proceedings and all other documents of orin the possession of the Vendor relating to the Business;

(b) all books, records, accounts, tax returns and financialstatements of the Business; and

(c) all other information which, in the reasonable opinion ofthe Purchaser's representatives, is required in order tomake an examination of the Business.

[Subject to section 4.3 hereof,] such investigations andinspections shall not mitigate or affect the representations

44

and warranties of the Vendor and the Shareholder hereunder,which shall continue in full force and effect.

(2) Conduc~ of Business:

Except as contemplated by this agreement or with the priorwritten consent of the Purchaser, during the Interim Periodthe Vendor and the Shareholder will:

( a) operate the Business only in the ordinary course thereof,consistent with past practices;

(b) take all actions within their control to ensure that therepresentations and warranties in section 3.1 hereofremain true and correct at the Closing Time, with thesame force and effect as if such representations andwarranties were made at and as of the Closing Time, andto satisfy or cause to be satisfied the conditions insection 6.1 hereof;

(c) promptly advise the Purchaser of any facts that come totheir attention which would cause any of the Vendor's andthe Shareholder's representations and warranties hereincontained to be untrue in any respect;

(d) take all action to preserve the Purchased Assets and theBusiness and its goodwill and relationships withcustomers, suppliers and others having dealings with theBusiness, to keep available the services of all employeesof the Business and to maintain in full force and effectall agreements relating to the Business to which theVendor is a party, and take all other action reasonably'requested by the Purchaser in order that the Condition ofthe Business will not be impaired during the InterimPeriod;

(e) promptly advise the Purchaser in writing of any materialadverse change in the Condition of the Business duringthe Interim Period;

( f) maintain all of the tangible properties and assets of theBusiness in the same condition as they now exist,ordinary wear and tear excepted;

(g) maintain the books, records and accounts of the Businessin the ordinary course and record all transactions on abasis consistent with past practice;

(h) not create, incur or assume any Encumbrance upon any ofthe properties or assets of the Business;

)

)I

45

(i) not dispose of any of the properties or assets of theBusiness except in the ordinary course of the Business;

(j) not terminate or waive any right of substantial value ofthe Business;

(k) not make any capital expenditure relating to the Businessin excess of $- in respect of any particular item or inexcess of $- in the aggregate;

(1) maintain the inventories of the Business in accordancewith past practice;

(m) keep in full force all of the current insurance policiesof the Business;

(n) take all actions within their control to ensure that theVendor performs all of its obligations falling due duringthe Interim Period under all agreements relating to theBusiness to which the Vendor is a party or by which it isbound;

(0) not enter into any agreement relating to the Businessother than agreements made in the ordinary course of theBusiness consistent with past practice and which involveobligations of less than $-; and

(p) not increase, in any manner, the compensation or employeebenefits of any of the employees of the Business, or payor agree to pay to any of them any pension, severance ortermination amount or other employee benefit not requiredby any of the employee benefit plans and programsreferred to in the schedules attached hereto.

(3) Transfer of Purchased Assets:

At or before the Closing Time, the Vendor and the Shareholderwill cause all necessary steps and corporate proceedings to betaken in order to permit the Purchased Assets to be duly andregularly transferred to the Purchaser.

(4) General Conveyance:

At the Closing Time, the Vendor will deliver to the Purchasergood and marketable title to and exclusive possession of thePurchased Assets, free and clear of any and all Encumbrances.At the Closing Time, the Vendor will execute and deliver tothe Purchaser one or more forms of general conveyance or billsof sale in respect of the assignment, conveyance, transfer and

46

delivery of the Purchased Assets to the Purchaser in formacceptable to the Purchaser.

(5) Re~ail Sales Tax:

At or before the Closing Time, the Vendor will deliver to thePurchaser a duplicate copy of a certificate issued pursuant tos.4 of The Revenue and Financial. Services Act of Saskatchewan,and will deliver evidence satisfactory to the Purchaser thatall taxes required to be paid by the Vendor under similarlegislation in the provinces of (insert] have been paid.

[(6) Bulk Sales Act Legisla~ion:

[A] At or before the Closing Time, the Vendor will provideevidence to the Purchaser of compliance with anyapplicable bulk sales legislation.]

OR

[B] At or before the Closing Time, the Vendor shall havereceived an order from a court of competent jurisdictionexempting the Seller or the transactions contemplatedhereby or both from the requirements of applicable bulksales legislation.

(7) Transfer of Assumed Contracts:

At the Closing Time, the Vendor will deliver to the Purchaser:

(a) an executed original of each of the Assumed Contracts;

(b) one or more forms of assignment of the Assumed Contractsin form acceptable to the Purchaser; and

(c) consents to the assignment of all of the AssumedContracts under which consent is required executed by allpersons whose consent is required in form acceptable tothe Purchaser.

(8) Non-Competition Agreemen~:

At the Closing Time,execute and deliveragreement in the formas Schedule "Y".

the Vendor and the Shareholder willto the Purchaser a non-competition

of the draft agreement attached hereto

47

5.2 COVENANTS BY THE PURCHASER:

The Purchaser covenants to the Vendor and the Shareholder that itwill do or cause to be done the following:

(1) Confidentiality:

Prior to the Closing Time and, if the transaction contemplatedhereby is not completed, at all times after the Closing Time,the Purchaser will keep confidential all information obtainedby it relating to the Business, except such information which:

( i ) prior to the date hereof was already in the possession ofthe Purchaser, as demonstrated by written records;

(ii) is generally available to the public, other than as aresult of a disclosure by the Purchaser; or

(iii)is made available to the Purchaser on a non-confidentialbasis from a source other than the Vendor, theShareholder or their representatives.

The Purchaser further agrees that such information will bedisclosed only to those of its employees and representativesof its advisors who need to know such information for thepurposes of evaluating and implementing the transactioncontemplated hereby. Notwithstanding the foregoing provisionsof this paragraph, the obligation to maintain theconfidentiality of such information will not apply to theextent that disclosure of such information is required inconnection with governmental or other applicable filingsrelating to the transactions hereunder, provided that, insuch case, unless the Vendor otherwise agrees, the Purchaserwill, if possible~ request confidentiality in respect of suchgovernmental or other filings. If the transactionscontemplated hereby are not consummated for any reason, thePurchaser will return forthwith, without retaining any copiesthereof, all information and documents obtained from theVendor and the Shareholder.

(2) Employees:

(a) At or before the Closing Time, the Purchaser will offeremployment to [all] employees of the Business on termsnot less favourable [on a cumulative basis] than thoseprovided to and on which such employees were employed bythe Vendor on the date hereof (which are described inSchedule "T" attached hereto).

48

(b) The Vendor will remain responsible and liable for allamounts which have accrued to all employees of theBusiness prior to the Closing Date including, withoutlimitation, all salary, bonus, employee benefits andvacation pay. [State exceptions to the foregoing if thePurchaser is assuming any such obligations as part of theAssumed Liabilities.] In addition, the Vendor will beliable for all severance payments, damages for wrongfuldismissal and all related costs payable in respect of thetermination of the employment of the employees of theBusiness by the Vendor at or prior to the Closing Time.

(3) Post-Closing Access:

After the Closing Date, upon reasonable notice, the Purchasershall give to the representatives, employees, counsel andaccountants of the Vendor, access, during normal businesshours, to the Business Records which relate to periods priorto the Closing Date and will permit such persons to examineand copy such records to the extent reasonably requested bythe Vendor in connection with the preparation of tax andfinancial reporting matters, audits, legal proceedings,governmental investigations and other business purposes.However, the Purchaser shall not be obliged to take any actionpursuant to this subsection that would unreasonably disruptthe normal course of its business, violate the terms of anycontract to which it is a party or to which the Purchaser orany of its assets is subject or to grant access to any of itsproprietary, confidential or classified information.

5.3 AGREEMENTS REGARDING PENSION PLAN:

Effective as of the Closing Date, the Vendor will assign to thePurchaser, and the Purchaser will adopt and assume and willthereafter be entitled to and bound by, all of the Vendor's rights,duties, liabilities and obligations under all pension plans foremployees of the Business listed in Schedule "u" and under allagreements and documents constituting or relating to such plans.The Vendor will deliver to the Purchaser all assets of or relatingto such plans. The parties will cooperate in preparing and filingall documents and in obtaining all approvals of all governmentalauthorities required to give effect to the foregoing as soon aspossible.

49

ARTICLE 6

CONDITIONS

6.1 CONDITIONS TO THE OBLIGATIONS OF THE PURCHASER:

Notwithstanding anything herein contained, the obligation of thePurchaser to complete the transactions provided for herein will besubject to the fulfilment of the following conditions at or priorto the Closing Time, and the Vendor and the Shareholder jointly andseverally covenant to use their best efforts to ensure that suchconditions are fulfilled.

(1) Accuracy of RepresentationsPerformance of Covenants:

and Warranties and

The representations and warranties of the Vendor and theShareholder contained in this Agreement or in any documentsdelivered in order to carry out the transactions contemplatedhereby shall be true and accurate on the date hereof and atthe Closing Time with the same force and effect as though suchrepresentations and warranties had been made as of the ClosingTime (regardless of the date as of which the information inthis Agreement or in any schedule or other document madepursuant hereto is given). In addition, the Vendor and theShareholder shall have complied with all covenants andagreements herein agreed to be performed or caused to beperformed by them at or prior to the Closing Time. Inaddition, the Vendor and the Shareholder shall have deliveredto the Purchaser a certificate in the form of Schedule "M"attached hereto confirming that the facts with respect to eachof such representations and warranties by the Vendor and theShareholder are as set out herein at the Closing Time and thatthe Vendor and the Shareholder have performed all covenantsrequired to be performed by them hereunder.

(2) Material Adverse Changes:

During the Interim Period there will have been no change inthe Condition of the Business, howsoever arising, exceptchanges which have occurred in the ordinary course of theBusiness and which, individually or in the aggregate, have notaffected and may not affect the Condition of the Business inany material adverse respect. Without limiting the generalityof the foregoing, during the Interim Period:

(a) no damage to or destruction of any material part of thePurchased Assets shall have occurred, whether or notcovered by insurance; and

50

(b) none of the [number] largest customers of the Businesswill have ceased, or advised the Vendor or the Purchaserof their intention to cease, purchasing from or dealingwith the Business.

(3) No Restraining Proceedings:

No order, decision or ruling of any court, tribunal orregulatory authority having jurisdiction shall have been made,and no action or proceeding shall be pending or threatenedwhich, in the opinion of counsel to the Purchaser, is likelyto result in an order, decision or ruling:

(a) to disallow, enjoin, prohibit or impose any limitationsor conditions on the purchase and sale of the PurchasedAssets contemplated hereby or the right of the Purchaserto own the Purchased Assets; or

(b) to impose any limitations or conditions which may have a[material] adverse effect on the Condition of theBusiness.

(4) Consents:

All consents required to be obtained in order to carry out thetransactions contemplated hereby in compliance with all lawsand agreements binding upon the parties hereto shall have beenobtained, including the consents referred to in Schedule "M"and Schedule "X" attached hereto.

(5) Estoppel Certificates:

Prior to the Closing Time, the Purchaser shall have receivedfrom the landlords of the Leased Premises executed copies ofestoppel certificates in the form of the draft certificateattached hereto as Schedule "M".

(6) Employees:

Prior to the Closing Time, [all] of the employees of theBusiness shall have accepted the Purchaser's offer ofemployment referred to in subsection 5.02(2) hereof.

51

(7) Opinion of Vendor's Counsel:

At the Closing Time, the Purchaser shall have received anopinion of legal counsel for the Vendor and the Shareholder inthe form of the draft opinion attached hereto as Schedule"SS", which opinion may rely on certificates of one or moresenior officers of the Vendor and the Shareholder as tofactual matters and may rely upon opinions of local counselwith respect to matters governed by laws other than the lawsof the Province of Saskatchewan and the federal laws of Canadaapplicable in the Province of Saskatchewan.

6.2 WAIVER OR TERMINATION BY PURCHASER:

The conditions contained in section 6.1 hereof are inserted for theexclusive benefit of the Purchaser and may be waived in whole or inpart by the Purchaser at any time. The Vendor and the Shareholderacknowledge that the waiver by the Purchaser of any condition orany part of any condition shall constitute a waiver only of suchcondition or such part of such condition, as the case may be, andshall not constitute a waiver of any covenant, agreement,representation or warranty made by the Vendor or the Shareholderherein that corresponds or is related to such condition or suchpart of such condition, as the case may be. If any of theconditions contained in section 6.1 hereof are not fulfilled orcomplied with as herein provided, the Purchaser may, at or prior tothe Closing Time at its option, rescind this Agreement by notice inwriting to the Vendor and the Shareholder and in such event thePurchaser shall be released from all obligations hereunder and;unless the condition or conditions which have not been fulfilledare reasonably capable of being fulfilled or caused to be fulfilledby the Vendor or the Shareholder, then the Vendor and theShareholder shall also be released from all obligations hereunder.

6.3 CONDITIONS TO THE OBLIGATIONS OF THE VENDOR:

Notwithstanding anything herein contained, the obligations of theVendor and the Shareholder to complete the transactions providedfor herein will be subject to the fulfilment of the followingconditions at or prior to the Closing Time, and the Purchaser willuse its best efforts to ensure that such conditions are fulfilled.

(1) Accuracy of RepresentationsPerformance of Covenants:

and Warranties and

The representations and warranties of the Purchaser containedin this Agreement or in any documents delivered in order tocarry out the transactions contemplated hereby will be trueand accurate on the date hereof and at the Closing Time with

52

the same force and effect as though such representations andwarranties had been made as of the Closing Time (regardless ofthe date as of which the information in this Agreement or anysuch schedule or other document made pursuant hereto isgiven). In addition, the Purchaser shall have complied withall covenants and agreements herein agreed to be performed orcaused to be performed by it at or prior to the Closing Time.In addition, the Purchaser shall have delivered to the Vendora certificate in the form of Schedule "CC" attached heretoconfirming that the facts with respect to each of therepresentations and warranties of the Purchaser are as set outherein at the Closing Time and that the Purchaser hasperformed each of the covenants required to be performed by ithereunder.

(2) No Restraining Proceedings:

No order, decision or ruling of any court, tribunal orregulatory authority having jurisdiction shall have been made,and no action or proceeding shall be pending or threatenedwhich, in the opinion of counsel to the Vendor or theShareholder, is likely to result in an order, decision orruling, to disallow, enjoin or prohibit the purchase and saleof the Purchased Assets contemplated hereby.

(3) Consents:

All consents required to be obtained in order to carry out thetransactions contemplated hereby in compliance with all lawsand agreements binding upon the parties hereto shall have beenobtained, including the consents referred to in Schedule "M"and Schedule "X" attached hereto.

(4) Opinion of Purchaser's Counsel:

At the Closing.Time, the Vendor and the Shareholder shall havereceived an opinion of the Purchaser's counsel in the form ofthe draft opinion attached hereto as Schedule "DO" whichopinion may rely on certificates of senior officers of thePurchaser as to factual matters and may rely upon opinions oflocal counsel with respect to matters governed by laws otherthan the laws of the Province of Saskatchewan and the federallaws of Canada applicable in the Province of Saskatchewan.

6.4 WAIVER OR TERMINATION BY VENDOR AND SHAREHOLDER:

The conditions contained in section 6.3 hereof are inserted for theexclusive benefit of the Vendor and the Shareholder and may be

)

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waived in whole or in part by the Vendor and the Shareholder at anytime. The Purchaser acknowledges that the waiver by the Vendor andthe Shareholder of any condition or any part of any condition shallconstitute a waiver only of such condition or such part of suchcondition, as the case may be, and shall not constitute a waiver ofany covenant, agreement, representation or warranty made by thePurchaser herein that corresponds or is related to such conditionor such part of such condition, as the case may be. If any of theconditions contained in section 6.3 hereof are not fulfilled orcomplied with as herein provided, the Vendor and the Shareholdermay, at or prior to the Closing Time at their option, rescind thisAgreement by notice in writing to the Purchaser and in such eventthe Vendor and the Shareholder shall each be released from allobligations hereunder and, unless the condition or conditions whichhave not been fulfilled are reasonably capable of being fulfilledor caused to be fulfilled by the Purchaser, then the Purchasershall also be released from all obligations hereunder.

ARTICLE 7

CLOSING

7.1 CLOSING ARRANGEMENTS:

Subject to the terms and conditions hereof, the transactionscontemplated herein shall be closed at the Closing Time at theoffices of [name, often law firm representing Vendor or Purchaser]at [address] or at such other place or places as may be mutuallyagreed upon by the Vendor and the Purchaser.

7.2 DOCUMENTS TO BE DELIVERED:

At or before the Closing Time, the Vendor and the Shareholder shallexecute, or cause to be executed, and shall deliver, or cause to bedelivered, to the Purchaser all documents, instruments and thingswhich are to be delivered by the Vendor and the Shareholderpursuant to the provisions of this Agreement, and the Purchasershall execute, or cause to be executed, and shall deliver, or causeto be delivered, to the Vendor and the Shareholder all cheques orbank drafts and all documents, instruments and things which thePurchaser is to deliver or to cause to be delivered pursuant to theprovisions of this Agreement.

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ARTICLE 8

INDEMNIFICATION AND SET-OFF

8.1 INDEMNITY BY THE VENDOR AND THE SHAREHOLDER:

Depending on the nature and extent of the representations,warranties and covenants made by Purchaser, the Vendor may wish toobtain a reciprocal indemnity from the Purchaser. Note that theindemnity consists of essentially two parts _ an indemnity fordamages suffered by the Purchaser (the "Supplementary Indemnity")and an indemnity against liabilities incurred by the Purchaser tothird parties (the "Third Part Indemnity"), in both cases arisingout of the circumstances described in clauses 8.1(1)(a), (b) and(c) below.

(1) The Vendor and the Shareholder hereby jointly andseverally agree to indemnify and save the Purchaserharmless from and against any claims, demands, actions,causes of action, damage, loss, deficiency, cost,liability and expense which may be made or broughtagainst the Purchaser or which the Purchaser may sufferor incur as a result of, in respect of or arising out of:

(a) any non-performance or non-fulfilment of anycovenant or agreement on the part of the Vendor orthe Shareholder contained in this Agreement or inany document given in order to carry out thetransactions contemplated hereby;

(b) any misrepresentation, inaccuracy, incorrectness orbreach of any representation or warranty made bythe Vendor or the Shareholder contained in thisAgreement or contained in any document orcertificate given in order to carry out thetransactions contemplated hereby; and

(c) all costs and expenses including, withoutlimitation, legal fees on a solicitor and clientbasis, incidental to or in respect of theforegoing.

(2) The obligations of indemnification by the Vendor and theShareholder pursuant to paragraph (1) of this sectionwill be:

(a) SUbject to the limitations referred to in section4. 1 hereof with respect to the survival of therepresentations and warranties by the Vendor andthe Shareholder;

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(b) [subject to the limitations referred to in section4.3 hereof; and]

(c) subject to the provisions of section 8.2 hereof.

8.2 PROVISIONS RELATING TO INDEMNITY CLAIMS:

The following provisions will apply to any claim by the Purchaserfor indemnification by the Vendor and the Shareholder pursuant tosection 8.1 hereof (hereinafter, in this section, called an" Indemnity Claim").

(l) Promptly after becoming aware of any matter that may giverise to an Indemnity Claim, the Purchaser will provide tothe Vendor and the Shareholder written notice of theIndemnity Claim specifying (to the extent thatinformation is available) the factual basis for theIndemnity Claim and the amount of the Indemnity Claim or,if an amount is not then determinable, an estimate of theamount of the Indemnity Claim, if an estimate is feasiblein the circumstances.

(2) If an Indemnity Claim relates to an alleged liability toany other person (hereinafter, in this section, called a"Third Party Liability"), including without limitationany governmental or regulatory body or any taxingauthority, which is of a nature such that the Purchaseris required by applicable law to make a payment to athird party before the relevant procedure for challengingthe existence or quantum of the alleged liability can beimplemented or completed, then the Purchaser may,notwithstanding the provisions of paragraphs (3) and (4)of this section, make such payment and forthwith demandreimbursement for such payment from the Vendor and theShareholder in accordance with this Agreement; providedthat, if the alleged liability to the third party asfinally determined upon completion of settlementnegotiations or related legal proceedings is less thanthe amount which is paid by the Vendor and theShareholder in respect of the related Indemnity Claim,then the Purchaser shall forthwith following the finaldetermination pay to the Vendor and the Shareholder theamount by which the amount of the liability as finallydetermined is less than the amount which is so paid bythe Vendor and the Shareholder.

(3) The Purchaser shall not negotiate, settle, compromise orpay (except in the case of payment of a judgment) anyThird Party Liability as to which it proposes to assertan Indemnity Claim, except with the prior consent of theVendor and the Shareholder (which consent shall not be

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unreasonably withheld or delayed), unless there is areasonable possibility that such Third Party Liabilitymay materially and adversely affect the Condition of theBusiness or the Purchaser, in which case the Purchasershall have the right, after notifying the Vendor and theShareholder, to negotiate, settle, compromise or pay suchThird Party Liability without prejudice to its rights ofindemnification hereunder.

(4) With respect to any Third Party Liability, provided theVendor and the Shareholder first admit the Purchaser'sright to indemnification for the amount of such ThirdParty Liability which may at any time be determined orsettled, then in any legal, administrative or otherproceedings in connection with the matters forming thebasis of the Third Party Liability, the followingprocedures will apply:

(a) except as contemplated by subparagraph (c) below,the Vendor and the Shareholder will have the rightto assume carriage of the compromise or settlementof the Third Party Liability and the conduct of anyrelated legal, administrative or other proceedings,but the Purchaser shall have the right and shall begiven the opportunity to participate in the defenceof the Third Party Liability, to consult with theVendor and the Shareholder in the settlement of theThird Party Liability and the conduct of relatedlegal, administrative and other proceedings(including consultation with counsel) and todisagree on reasonable grounds with the selectionand retention of counsel, in which case counselsatisfactory to the Vendor, the Shareholder and thePurchaser shall be retained by the Vendor and theShareholder;

(b) the Vendor and the Shareholder will co-operate withthe Purchaser in relation to the Third PartyLiability, will keep it fully advised with respectthereto, will provide it with copies of allrelevant documentation as it becomes available,will provide it with access to all records andfiles relating to the defence of the Third PartyLiability and will meet with representatives of thePurchaser at all reasonable times to discuss theThird Party Liability; and

(c) notwithstanding subparagraphs (a) and (b), theVendor and the Shareholder will not settle theThird Party Liability or conduct any legal,administrative or other proceedings in any mannerwhich could, in the reasonable opinion of the

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Purchaser, have a material adverse affect on theCondition of the Business or the Purchaser, exceptwith the prior written consent of the Purchaser.

(5) If, with respect to any Third Party Liability, the Vendorand the Shareholder do not admit the Purchaser's right toindemnification or decline to assume carriage of thesettlement or of any legal, administrative or otherproceedings relating to the Third Party Liability, thenthe following provisions will apply:

(a) the Purchaser, at its discretion, may assumecarriage of the settlement or of any legal,administrative or other proceedings relating to theThird Party Liability and may defend or settle theThird Party Liability on such terms as thePurchaser, acting in good fai th, considersadvisable; and

( b ) any cost, lost, damage or expense incurred orsuffered by the Purchaser in the settlement of suchThird Party Liability or the conduct of any legal,administrative or other proceedings shall be addedto the amount of the Indemnity Claim.

8.3 RIGHT OF SET-OFF:

The Purchaser shall have the right to satisfy any amount from timeto time owing by it to the Vendor or the Shareholder by way ofset-off against any amount from time to time owing by the Vendor orthe Shareholder to the Purchaser, including any amount owing to thePurchaser pursuant to the Vendor's and Shareholder'sindemnification pursuant to section 8.1 hereof.

ARTICLE 9

GENERAL PROVISIONS

9.1 FURTHER ASSURANCES:

Each of the Vendor, the Shareholder and the Purchaser herebycovenants and agrees that at any time and from time to time afterthe Closing Date it will, upon the request of the others, do,execute, acknowledge and deliver or cause to be done, executed,acknowledged and delivered all such further acts, deeds,assignments, transfers, conveyances and assurances as may berequired for the better carrying out and performance of all theterms of this Agreement.

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9.2 REMEDIES CUMULATIVE:

The rights and remedies of the parties under this Agreement arecumulative and in addition to and not in substitution for anyrights or remedies provided by law. Any single or partial exerciseby any party hereto of any right or remedy for default or breach ofany term, covenant or condition of this Agreement does not waive,alter, affect or prejudice any other right or remedy to which suchparty may be lawfully entitled for the same default or breach.

9.3 NOTICES:

(1) Any notice, designation, communication, request, demandor other document, required or permitted to be given orsent or delivered hereunder to any party hereto shall bein writing and shall be sufficiently given or sent ordelivered if it is:

(a) delivered personally to an officer or director ofsuch party;

(b) sent to the party entitled to receive it byregistered mail, postage prepaid, mailed in Canada;or

(c) sent by telecopy machine.

(2) Notices shall be sent to the following addresses ortelecopy numbers:

(a) in the case of the Vendor:

(name of vendor corporation, address, postal codeand telecopy number]

Attention: [name and office]

(b) in the case of the Shareholder:

[name, address, postal code and telecopy number]

(c) in the case of the Purchaser:

(name of purchaser corporation, address, postalcode and telecopy number]

Attention: [name and office]

or to such other address or telecopier number as theparty entitled to or receiving such notice, designation,communication, request, demand or other document shall,

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by a notice given in accordance with this section, havecommunicated to the party giving or sending or deliveringsuch notice, designation, communication, request, demandor other document.

Any notice, designation, communication, request, demandor other document given or sent or delivered as aforesaidshall:

(d) if delivered as aforesaid, be deemed to have beengiven, sent, delivered and received on the date ofdelivery;

(e) if sent by mail as aforesaid, be deemed to havebeen given, sent, delivered and received (but notactually received ) on the fourth Business Dayfollowing the date of mailing, unless at any timebetween the date of mailing and the fourth BusinessDay thereafter there is a discontinuance orinterruption of regular postal service, whether dueto strike or lockout or work slowdown, affectingpostal service at the point of dispatch or deliveryor any intermediate point, in which case the sameshall be deemed to have been given, sent, deliveredand received in the ordinary course of the mails,allowing for such discontinuance or interruption ofregular postal service; and

(f) if sent by telecopy machine, be deemed to have beengiven, sent, delivered and received on the date thesender receives the telecopy answer back confirmingreceipt by the recipient.

9.4 COUNTERPARTS:

This Agreement may be executed in several counterparts, each ofwhich so executed shall be deemed to be an original, and suchcounterparts together shall constitute but one and the sameinstrument.

9.5 EXPENSES OF PARTIES:

Each of the parties hereto shall bear all expenses incurred by itin connection with this Agreement including, without limitation,the charges of their respective counsel, accountants, financialadvisors and finders.

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9.6 BROKERAGE AND FINDER'S FEES:

The Vendor and the Shareholder jointly and severally agree toindemnify the Purchaser and hold it harmless in respect of anyclaim for brokerage or other commissions relative to this Agreementor the transactions contemplated hereby which is caused by actionsof the Vendor or the Shareholder or any of their Affiliates. ThePurchaser will indemnify the Vendor and the Shareholder and holdthem harmless in respect of any claim for brokerage or othercommissions relative to this Agreement or to the transactionscontemplated hereby which is caused by actions of the Purchaser orany of its Affiliates.

9.7 ANNOUNCEMENTS:

No announcement with respect to this Agreement will be made by anyparty hereto without the prior approval of the other parties. Theforegoing will not apply to any announcement by any party requiredin order to comply with laws pertaining to timely disclosure,provided that such party consults with the other parties beforemaking any such announcement.

9.8 ASSIGNMENT:

The rights of the Vendor and the Shareholder hereunder shall not beassignable wi thout the wri tten consent of the Purchaser. Therights of the Purchaser hereunder shall not be assignable withoutthe written consent of the Vendor and the Shareholder.

9.9 SUCCESSORS AND ASSIGNS:

This Agreement shall be binding upon and enure to the benefit ofthe parties hereto and their respective successors and permittedassigns. Nothing herein, express or implied, is intended to conferupon any person, other than the parties hereto and their respectivesuccessors and assigns, any rights, remedies, obligations orliabilities under or by reason of this Agreement.

9.10 ENTIRE AGREEMENT:

This Agreement and the schedules referred to herein constitute theentire agreement between the parties hereto and supersede all prioragreements, representations, warranties, statements, promises,information, arrangements and understandings, whether oral orwritten, express or implied, with respect to the subject matterhereof. None of the parties hereto shall be bound or charged withany oral or written agreements, representations, warranties,statements, promises, information, arrangements or understandings

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not specifically set forth in this Agreement or in the schedules,documents and instruments to be delivered on or before the ClosingDate pursuant to this Agreement. The parties hereto furtheracknowledge and agree that, in entering into this Agreement and indelivering the schedules, documents and instruments to be deliveredon or before the Closing Date, they have not in any way relied, andwill not in any way rely, upon any oral or written agreements,representations, warranties, statements, promises, information,arrangements or understandings, express or implied, notspecifically set forth in this Agreement or in such schedules,documents or instruments.

9.11 WAIVER:

Any party hereto which is entitled to the benefits of thisAgreement may, and has the right to, waive any term or conditionhereof at any time on or prior to the Closing Time; provided,however, that such waiver shall be evidenced by written instrumentduly executed on behalf of such party.

9.12 AMENDMENTS:

No modification or amendment to this Agreement may be made unlessagreed to by the parties hereto in writing.

IN WITNESS WHEREOF the parties hereto have duly executed thisagreement under seal as of the day and year first written above.

[NAME OF PURCHASER CORPORATION]

Per: _

Office:

(Seal)Per: _

Office:

[NAME OF VENDOR CORPORATION]

Per: _

Office:(Seal)

Per: _

Office:

Witness [Name of Shareholder]

[Attach the following schedules]

Schedule "A"Schedule "B"Schedule "CItSchedule "0"Schedule "E"Schedule "F"Schedule "G"Schedule "H"Schedule "I"Schedule "J"Schedule "K"Schedule "L"Schedule "M"Schedule "N"Schedule "0"Schedule "P"Schedule "Q"Schedule "R"Schedule "s"Schedule "T"Schedule "U"Schedule "V"Schedule "w"Schedule "X"

Schedule "y"Schedule "Z"Schedule "M"Schedule "BB"

Schedule "CC"Schedule "DO"

Audited Financial StatementsCustomer ContractsInterim Financial StatementsLeased PremisesLicence RightsReal PropertiesMachinery, Equipment and FurnitureLeased Equipment and VehiclesComputer EquipmentTechnology, Intellectual Property and SoftwareEscrow AgreementAllocation of Purchase PriceVendor's Contractual and Regulatory ApprovalsLicences, Registrations and QualificationsLitigationEnvironmental MattersEncumbrancesWarranties and DiscountsMaterial ContractsEmployeesEmployee Benefit and Pension PlansInsurance PoliciesGovernmental Assistance ProgramsPurchaser's Contractual and RegulatoryApprovalsNon-Competition AgreementVendor's Confirming CertificateEstoppel CertificateOpinion of Counsel to the Vendor andShareholderPurchaser's Confirming CertificateOpinion of Counsel to the Purchaser

The possible removal of certain of the foregoing schedules or thepossible insertion of other schedules (or both) may be requireddepending upon your particular circumstances.